Why Cyprus?

Cyprus is the third largest inland in the Mediterranean and benefits greatly from its strategic geographical position in the Eastern Mediterranean as it is at the crossroads of three continental zones acting as a vital gateway to Europe, the Middle East, Africa and Asia. As an EU member and a constantly evolving international financial center, Cyprus has become a pivotal business hub attracting countless commercial endeavours, supporting essential partnerships and boasts unlimited untapped investment opportunities.

Despite the adverse effects of the Turkish military invasion on July 1974, Cyprus economy was gradually redeveloped and on 1st May 2004 the Republic of Cyprus joined EU as a full member completing a long journey that lasted more than three decades while as from 1 January 2008 joined Eurozone and introduced Euro as its official currency.

Cyprus law is extensively codified, but it is still heavily based on English Common Law in the sense that the fundamental principle of precedent applies.

The law in Cyprus emerges out of a unique legal system, based on the Anglo-Saxon system, namely common law and equity, in a combination with the Continental system. Accordingly, various European law directives, regulations and international treaties, the constitution of the Republic of Cyprus, the legislation (statutory law) and the judicial precedent (case law), constitute the main sources of law in Cyprus.

Cyprus Companies Law cap 113 regulates the corporate governance of Cyprus Companies – either a Private or Public Company, from its incorporation until its dissolution.  The Companies Law was enacted in 1951 and it adopted almost identical companies law provisions with the English Companies law.  Other common law principles such as fiduciary duties of directors and EU Regulations formed the Company Law of Cyprus in general.

Cyprus is a unique place to live, work and do business and is highly ranked as:

• One of the safest small countries as well as globally
• One of the best retirement jurisdictions globally
• Cleanest waters and most blue flag beaches in the EU
• 2nd best climate worldwide

Cyprus tax system is continually adapting to new OECD and EU directives but at the same time is emerging to an attractive and flexible tax regime for international investors to consider relocating or setting up their business activity. The most important benefits of the Cyprus tax regime are highlighted below:

• • Tax exemption of dividend & interest income
  • Tax exemption of capital or revenue gains from the disposal of titles
  • Tax exemption of foreign exchange gains
  • 80% Notional Interest Deduction (NID) for Equity Investments in Cyprus companies
  • One of the lowest corporation tax rates (12.5%) in the EU
  • Competitive IP Regime with a low tax rate of 2.5%
  • Tax deduction for investing in start-ups
  • Tax deduction for R&D eligible expenditure (effective deduction rate 120%)
  • Tax deduction for investment in audiovisual industry (20% for individuals and small size corporates+10% of medium size corporates)
  • Income exemption up to 50% of profits from audio visual industry (film production)
  • No withholding tax on outgoing dividend of royalty payments
  • Capital Gain Tax exemption on properties located outside the Republic of Cyprus
  • Growing Double Tax Treaty network with more than 65 countries
  • Tax exemptions for International Trusts
  • No immovable property taxes
  • Income tax incentives for individuals relocating to Cyprus (EU and Third country nationals)
  • Personal tax exemptions for new residents and non-domiciled individuals
  • No inheritance or succession tax
  • Tax-free liquidation
  • Carrying forward of tax losses for 5 years

• Cyprus is highly ranked internationally with respect to the high educational level of its people, in terms of people finishing tertiary education (university degree), multilanguage and high-quality professional skills.
• Cyprus is widely recognized as an «International Center of Excellence»
• A large number of highly skilled qualified professionals’ members of ACCA and ICAEW
• Highly regulated Professionals Services industry especially for Accountants and Lawyers
• Large number of Accountancy and Law firms