Why Cyprus

Over the years, Cyprus has established itself as a major international financial centre. The main reasons for this accomplishment are:

Favourable Tax Regime

Cyprus enjoys one of the lowest corporate tax rates in the EU (12.5%) and has an extensive network of double tax treaties, currently with more than 50 countries, including countries in Western and Eastern Europe, North America, as well as emerging markets such as Russia, India and China.

The Cyprus jurisdiction is perfectly suitable for setting up intermediary holding companies due to the island’s combination of double tax treaties and low-tax regime. Dividends can flow through the Cyprus company totally tax free and the company can be used to take advantage of the extensive network of double tax treaties.

More specifically the most important tax advantages of Cyprus companies are the following:

• One of the lowest corporate tax rates in the European Union – 12.5 % which can be further reduced with effective tax planning;
• No withholding tax on dividend distribution to non-tax-resident shareholders;
• Dividends received by a Cyprus company from abroad are also exempt from tax provided that at least 50% of the direct or indirect activities of the company paying the dividend are attributable to non-investment income or the tax burden on the dividend paying company’s income is not lower than 6.25%;
• Profits from a permanent establishment abroad are generally exempt from tax;
• Tax losses can be carried forward for five years;
• Highest number of signed Double Tax Treaties in Europe;
• Absence of Controlled Foreign Companies (CFCs) and Thin Capitalisation rules;
• Double tax relief is available; and
• No Capital Gains Tax on the sale of shares unless the company owns immovable property situated in Cyprus.

Strategic geographical location

The island is strategically situated in the North-East part of the Mediterranean Sea, at the crossroads of Europe, Asia and Africa.

European Union Member

Cyprus is a member of the European Union since 2004 and has adopted the Euro in 2008. It has therefore access to all EU directives.

Qualified workforce

Cyprus ranks among the leading five countries in the world as to the proportion of university graduates of the population. Cyprus’ commitment to education has ensured a qualified and multi-lingual workforce.

Excellent infrastructure

Cyprus has an excellent road infrastructure and modern airports in Larnaka and Paphos. The island also enjoys multipurpose port facilities in Limassol and an advanced telecommunications network.