Why Cyprus
Cyprus has a long history in the financial and corporate services sector. Cyprus has always been regarded as an exceptional setting for incorporating companies not just because of its advantageous tax system and its strong legal and regulatory infrastructure based on UK common law but also because of the island’s outstanding location at the crossroads of three continents, the low operating costs and its excellent professional services.
The island’s entry into the EU and the EU-Monetary Union has established Cyprus as the ideal gateway for investments to and from EU.
Cyprus, offers unique tax opportunities to international businesses – low corporate tax rate, a network of favorable double tax treaties, no withholding tax on dividends and interest paid, no capital gains on profits from the disposal of shares and securities, exemption of taxes on foreign dividends and interest received. It complies with the EU directives and the OECD requirements against harmful tax practices.
Public/private companies and funds (UCITS and ICIS) registered in Cyprus can be used as efficient investment vehicles. A company or fund registered in Cyprus can conduct public offers in other EU member states or have their shares admitted on an EU regulated stock exchange. Cyprus holding companies are tax efficient and popular to invest in EU and non-EU countries.
All the above positive arguments, along with the strong incentives given by the Cyprus Government with regards to Cyprus citizenship by investment scheme have created excellent opportunities for professionals to establish Cyprus as a major financial center within the European Union.
At Apserou Shiaka & Co, we can help you to determine your tax strategy of your business whether you are looking to use Cyprus as a base for your international operations or to invest in Cyprus.
We provide professional services which include accounting, audit, tax, legal and business advisory.
Main features of Cyprus
Cyprus is located in the Eastern Mediterranean at the crossroads of Europe, the Middle East and Africa. Its strategic position plays a key role in trade and international business
An EU member state since May 2004 and member of Eurozone since 2008
A well-advanced infrastructure, educational institutions and medical centers
The telecommunications infrastructure of Cyprus is well developed and companies are equipped with the latest technology
A well-educated workforce and low-cost business environment
High quality of life and the cost of living is low compared to other international financial centres
The Banking, Legal and Accounting Services in Cyprus closely follow the British pattern. Many Cypriot Banks have branches or representative offices throughout the world and International Banks also have branches on the island.
An investor friendly tax regime with an extensive network of double taxation agreements with around 60 countries
The favorable provisions of the Cyprus tax legislation as well as the wide network of double taxation treaties make the Cyprus holding company ideal for international tax planning purposes
The new guidelines issued by the Cypriot VAT authorities make Cyprus the most attractive jurisdiction for private aircraft and Yacht registration in the EU
Investment fund jurisdiction
The discovery of significant Natural Gaz reserves within Cyprus’ EEZ brings new opportunities
Plans for a Science and Technology Park are in progress and are expected to boost business focusing on research, technology and innovation.
Government residency and citizenship Schemes encourages property investments for non-EU citizens
Due to its attractive personal and business taxation regimes, Cyprus is a highly favorable tax planning jurisdiction. Cyprus companies are commonly used as follows:
Cyprus Holding companies
Commonly stated as being the easiest exit route out of Europe, and used extensively in combination with emerging markets such as Russia and India. Dividends from subsidiaries can be received in most cases free of withholding tax and in most cases, exempt from tax in Cyprus. Capital gains on sale of Securities are tax exempt, unless they relate to immovable property situated in Cyprus. There is no withholding tax on dividends paid by the company.
Cyprus Royalty Company
Many license holders choose to use Cyprus for royalty structures because it offers no withholding taxes on the payment of royalties (provided the rights are exercised outside Cyprus). Tax is only paid on the license fee retained by the Cyprus company. Cyprus has a worldwide network of DTT, the EU Directive on interest and Royalties providing for nil withholding taxes between EU Countries applies and the corporate tax rate is 12.50%.
Cyprus investment company
Gains on the sale of securities are exempt from tax in Cyprus and dividend income is also exempt in most cases (subject to certain provisions). Dividends can be paid by the company without withholding tax.
Cyprus finance company
Main activities can include, but are not limited to group financing.