Cyprus has always been an attraction for the business world; not only from the Middle east but from the CIS countries and Europe. Cyprus has settled itself as a flourishing business centre point, with a tremendous array of investment opportunities. The optimal strategic location of the island, the advanced infrastructure and high quality of life do not only constitute key reasons to move and live on the island, but on the other hand are at the heart of an investor's choice to exploit his financial resources in Cyprus.
There are many reasons to choose Cyprus beside the strategic location, the legal system which is based on the English common law principles and is generally known a business-friendly and component system that guarantees reliability and transparency in business practice, the natural beauty and climate. Cyprus offers an appealing and transparent tax regime, compliant with EU, OECD, international laws and regulations. Giving access to a broad system of more than 60 Double Tax Treaties, maintaining a corporate tax rate of 12.5% one of the lowest in the EU. It also offers confidence to international and domestic investors in order to invest, grow and prosper.
A. Cyprus Tax System Features
- Dividend participation exemption
- Exemption on disposal of Securities (e.g. Shares, Bonds, Debentures)
- No Withholding Taxes
- No Succession Taxes
- No Capital Gains Tax (except for disposal of Real Estate in Cyprus or Shares of Company holding Real Estate in Cyprus to the extent gains are attributable to the Real Estate holding)
- Attractive Intellectual Property regime
- Tonnage Tax for Shipping Companies
B. Significant exemptions for non-domiciled individuals and non-resident persons who take up residence in Cyprus
- No tax on dividends and interest for non-domiciled individuals
- 50% exemption on income from employment in Cyprus of a person who was not previously resident in Cyprus. The exemption applies for ten (10) years, provided that the income from employment exceeds €100,000 per annum
Setting up in Cyprus
The first step to set up a company is to apply to the Registrar of Companies for approval of the company’s name and it takes approximately 4 working days.
Then, we prepare an application to be submitted to the Registrar of Companies to register the company in accordance with Company Law; to register a company, takes about 5-7 days. For the registration of the company to be in accordance with the Companies Law, the following are required:
- The name of the company: At least three names should be provided in order of preference. If you are not concerned about the name you could choose from our list.
- The names, addresses and nationalities of the Directors, Company Secretary and Shareholders, together with copies of their passports. Our ’Know your client’ form should be completed by each foreign shareholder, director and company secretary.
- References for each shareholder. We require a reference from a bank, professional accountant and/or lawyer.
- The number of shares held by each Shareholder.
- The amount of Authorised and Issued Share Capital.
- The company’s main activity.
Authors: Panayiotis Koussis (Trainee Lawyer) and Elli Theofanous (Corporate Administrator)