Cyprus: In Synopsis
Cyprus has emerged into a modernized and flourishing country, with an invaluable geographic location in the Eastern Mediterranean Sea. Cyprus is recognized for having a steady and advanced national economy, excellent telecommunication facilities and has proven to be an ideal business centre for channelling investments both within the European Union and non – European Union countries. The main reasons clients choose Cyprus are listed below.
• Strategic geographic location;
• Mediterranean climate throughout the year; cool winters, warm summers and places of interest for tourists;
• Economically stable environment for running a business- Significant economic memberships;
• Member of the European Union since May 2004 / Eurozone Member State - EU Presidency in 2012;
• Credible and highly reputable financial centre – OECD White List;
• The lowest corporate tax rate in the European Union/Eurozone at 10%;
• International business centre for shipping operations;
• Modernization of the International Trustee Law
• Excellent telecommunication network;
• The Cyprus legal system is a common law system, essentially based on English Law;
• Government and private sector gives focus on growing the funds industry even further;
• Highly skilled, educated and multilingual workforce;
• Financial reporting system based on IFRS;
• Proficient legal, accounting and banking services;
• Highly developed financial services industry;
• International Banking Units and major multinational companies.
Why do business through Cyprus Companies?
As a result of the attractive international business center for investments and the stable tax regime, Cyprus has become a popular location with significant advantages for registering Cyprus Companies for investors to conduct their businesses.
As from 1st October 2004, the government of Cyprus liberated the Foreign Direct Investment (FDI) policy and the exchange control laws have been abolished and there is no requirement to obtain permit from the Central Bank of Cyprus. Subsequently, this enables any individual whether a European Union citizen or non-European Union citizen, to invest through Cyprus or through a Cyprus company.
Cyprus with more than 30 years of experience as an international business centre, has negotiated an impressive number of Double Tax Treaties (over 47) with other states which enable foreign investors to take advantage of tax benefits taking advantage of the provision of the Double Tax Treaty in offshore structuring.
Additionally and most essentially, Cyprus offers the lowest tax rate on income of 10% within Europe and it implements all European directives. Furthermore, the V.A.T. rate is currently 17% and together with the favourable tax law treatments on dividends, interest, royalties, profits from the sale of securities and others, Cyprus is a fiscally attractive jurisdiction for investors.
Cyprus derives most of its income from services rendered to non-residents of Cyprus and from the tourist industry. There is an increasing flow of business to Cyprus from major multinational companies who have established their regional offices in Cyprus and who take advantage of the highly skilled and educated Cypriot professionals and support staff.
Cyprus is already an established centre for the establishment of private investment funds or International Collective Investment Schemes (ICIS) as they are known, for their overseas activities and there is a great demand for private investment funds addressed to less than 100 investors.
Cyprus will continue to be regarded as an attractive offshore jurisdiction and a popular business centre for the routing of investments due to its taxation system, the wide range of beneficial Double Tax Treaties, tax-free exit to all jurisdictions, full application of the European Union Directives and the low costs for setting up Cyprus entities as well as substantially lower annual fees and administration costs compared to other competing jurisdictions.