Our consultants are standing by to discuss your needs.
CONTACT US NOW
Cyprus is a well-established international business location that provides a variety of corporate tax benefits to enterprises wishing to establish a company. The country's favourable tax policy, combined with its European Union membership, has made it a popular destination for businesses looking to expand their operations.
One of the primary tax benefits of incorporating a company in Cyprus is the country's low corporate tax rate. Cyprus has one of Europe's lowest company tax rates, currently set at 12.5%. This low rate has attracted a lot of foreign enterprises to relocate to Cyprus, giving it a considerable advantage over other European locations with higher tax rates.
In addition to the low corporate tax rate, Cyprus provides a number of other tax breaks to companies wishing to set up a business in Cyprus. These include a tax credit system for enterprises who spend on research and development, as well as tax breaks for companies in particular industries, such as shipping and tourism.
Another benefit of establishing a company in Cyprus is the country's favourable tax treaty network. Cyprus has signed several double tax treaties with other nations in order to minimise double taxation for businesses that operate in different jurisdictions. These treaties provide greater certainty and stability to businesses set up in Cyprus while also allowing them to arrange their activities in a tax-efficient manner.
Cyprus also provides firms with a variety of Cyprus tax planning options, such as the use of holding companies, licensing companies, and finance companies. Companies can use these structures to decrease their tax burden by taking advantage of the country's favourable tax code and tax treaty network.
In addition to these tax savings, Cyprus provides a variety of other advantages to firms wishing to create a Cyprus corporation. A stable political and economic environment, a well-educated workforce, and a well-developed infrastructure are examples of these. In addition, Cyprus serves as a gateway to the European Union, giving firms access to a market of over 500 million consumers.
The tax rate on the net worldwide profit from a company incorporated in Cyprus is 12.5%, which is one of the lowest corporate tax rates in the EU.
There are no withholding taxes on royalty payments relating to the use of rights outside Cyprus paid to non-residents of Cyprus (if the rights are earned in Cyprus, 10% withholding tax is applicable, or 5% in the case of cinematograph films).
All gains from trading in securities are exempt from capital gains tax, There is no tax on capital gains arising from the disposal of securities listed on a recognised Stock Exchange Market.
There is no tax on profits from reorganisation, profits derived from the transfer of ownership of shares and the payment of stamp fees.
In Cyprus, there is no tax on dividends or interest payments to non-residents, as well as residents not domiciled in Cyprus.
Cyprus international trusts have significant tax advantages:
* The income and gains from a Cyprus international trust, derived from sources outside Cyprus, are exempt from any tax imposed in Cyprus;
* Dividends and interest received by a trust from a Cyprus company are not subject to tax, nor to withholding tax;
* Exemption from taxation in the case of a person who is not a Cyprus citizen who creates an international trust in Cyprus and retires in the country, on condition that all of the property settled and income earned is abroad, even if the individual is a beneficiary.
EU Directives and Regulations regarding IP are applicable and have been incorporated into Cyprus legislation. IP rights owned by Cyprus companies are fully protected in all EU Member States and Cyprus' highly beneficial IP tax regime provides exemption from tax for the following:
* 80% of worldwide royalty income deriving from IP owned by Cyprus resident companies
* 80% of any profit made due to the disposal of IP owned by Cyprus resident companies
* any capital expenditure on the acquisition or development of IP is tax-deductible in the year in which it was incurred and for 4 consecutive years after that
* All of the above exemptions are also available for IPs acquired or developed before January 2012
Cyprus has concluded double taxation treaties covering the following countries:
|
|
State |
Date of Signature
Treaty/Protocol/Note |
Date of entry into force
|
Publication in the Official Gazette of the Republic
(Number, date, text document) |
|
1 |
Andorra |
18/5/2018 |
11/01/2019 | 4240-1/6/2018 |
|
2 |
Armenia |
17/01/2011 |
19/09/2011 |
|
|
3 |
Austria (new agreement) |
20/03/1990 21/05/2012 |
01/01/1991 01/04/2013 |
|
|
4 |
Azerbaijan*** |
29/10/1982 |
26/08/1983 |
26/11/1982 |
|
5 |
Barbados |
03/05/2017 |
11/09/2017 |
|
|
6 |
Belarus |
29/05/1998 |
12/02/1999 |
|
|
7 |
Belgium |
14/05/1996 |
08/12/1999 |
|
|
8 |
Bosnia* |
29/06/1985 |
08/09/1986 |
2073 - 23 /08/ 1985 |
|
9 |
Bulgaria |
30/10/2000 |
03/01/2001 |
|
|
10 |
Canada |
02/05/1984 |
03/09/1985 |
|
|
11 |
China |
25/10/1990 |
05/10/1991 |
|
|
12 |
Czech Republic (new agreement) |
15/04/1980 28/04/2009 |
30/12/1980 26/11/2009 |
1599 - 03 /05/ 1980 |
|
13 |
Denmark (new agreement) |
26/05/1981 11/10/2010 |
10/04/1982 07/09/2011 |
|
|
14 |
Egypt (new agreement) |
19/12/1993 08/10/2019 |
14/03/1995 31/07/2020 |
|
|
15 |
Estonia
|
15/10/2012
|
08/10/2013
|
|
|
16 |
Ethiopia |
30/12/2015 |
18/10/2017 |
|
|
17 |
Finland |
15/11/2012 |
28/04/2013 |
|
|
18 |
France |
18/12/1981 |
01/04/1983 |
|
|
19 |
Georgia |
13/05/2015 |
04/01/2016 |
|
|
20 |
Germany (new agreement) (amending protocol) |
09/05/1974 18/02/2011 19/02/2021 |
11/10/1977 16/12/2011 08/12/2021 |
|
|
21 |
Greece |
30/03/1968 |
16/01/1969 |
651 - 10 /05/ 1968 |
|
22 |
Hungary |
30/11/1981 |
24/11/1982 |
|
|
23 |
Iceland |
13/11/2014 |
22/12/2014 |
|
|
24 |
India (new agreement) |
13/06/1994 18/11/2016 |
21/12/1994 14/12/2016 |
|
|
25 |
Iran |
04/08/2015 |
05/03/2017 |
|
|
26 |
Ireland |
24/09/1968 |
12/07/1970 |
|
|
27 |
Italy (new protocol) |
24/04/1974 04/06/2009 |
09/06/1983 23/11/2010 |
|
|
28 |
Jersey |
11/07/2016 |
17/02/2017 |
|
|
29 |
Jordan |
17/12/2021 | 11/04/2022 | |
|
30 |
Kazakhstan |
15/5/2019 |
17/1/2020 |
|
|
31 |
Kingdom of Bahrain |
09/03/2015 |
26/04/2016 |
|
|
32 |
Kuwait (new agreement) |
15/12/1984 05/10/2010 |
25/09/1986 30/08/2013 |
|
|
33 |
Kyrgyzstan*** |
29/10/1982 |
26/08/1983 |
26/11/1982 |
|
34 |
Latvia |
24/05/2016 |
27/10/2016 |
|
|
35 |
Lebanon |
18/02/2003 |
14/04/2005 |
|
|
36 |
Lithuania |
21/06/2013 |
17/04/2014 |
|
|
37 |
Luxembourg |
08/05/2017 |
23/04/2018 |
|
|
38 |
Malta |
22/10/1993 |
11/08/1994 |
|
|
39 |
Mauritius (new protocol) |
21/01/2000 23/10/2017 |
12/06/2000 2/5/2018 |
|
|
40 |
Moldova |
28/01/2008 |
03/09/2008 |
|
|
41 |
Montenegro* |
29/06/1985 |
08/09/1986 |
2073 - 23 /08/ 1985 |
|
42 |
Netherlands |
01/06/2021 |
4268 – 04/06/2021 | |
|
43 |
Norway (new agreement) |
02/05/1991 24/02/2014 |
01/01/1995 08/07/2014 |
|
|
44 |
Poland (new agreement) |
04/06/1992 22/03/2012 |
07/07/1993 09/11/2012 |
|
|
45 |
Portugal |
19/11/2012 |
16/08/2013 |
|
|
46 |
Qatar |
11/11/2008 |
20/03/2009 |
|
|
47 |
Romania |
16/11/1981 |
08/11/1982 |
|
|
48 |
Russia (amending protocol) (additional amending protocol) |
05/12/1998 07/10/2010 08/09/2020 |
17/08/1999 02/04/2012 15/01/2021 |
|
|
49 |
San Marino (amending protocol) |
27/04/2007 19/05/2017 |
18/07/2007 27/6/2018 |
|
|
50 |
Saudi Arabia |
03/01/2018 |
01/03/2019 | 4237 – 05/03/2018 |
|
51 |
Serbia* |
29/06/1985 |
08/09/1986 |
2073 - 23 /08/ 1985 |
|
52 |
Seychelles |
28/06/2006 |
27/10/2006 |
|
|
53 |
Singapore |
24/11/2000 |
08/02/2001 |
|
|
54 |
Slovakia** |
15/04/1980 |
30/12/1980 |
1599 - 03 /05/ 1980 |
|
55 |
Slovenia* (new agreement) |
29/06/1985 12/10/2010 |
08/09/1986 14/09/2011 |
2073 - 23 /08/ 1985 |
|
56 |
South Africa (amending protocol) |
26/11/1997 01/04/2015 |
08/12/1998 18/09/2015 |
|
|
57 |
Spain |
14/02/2013 |
28/05/2014 |
|
|
58 |
Sweden |
25/10/1988 |
14/11/1989 |
|
|
59 |
Swiss Confederation (amending protocol) |
25/07/2014 20/07/2020 |
15/10/2015 03/11/2021 |
|
|
60 |
Syria |
15/03/1992 |
22/02/1995 |
|
|
61 |
Thailand |
27/10/1998 |
04/04/2000 |
|
|
62 |
The States of Guernsey |
15 /07/ 2014 (in Cyprus), 29 /07/2014 (in Guernsey) |
04/03/2015 |
|
|
63 |
Ukraine*** (new agreement) (amending protocol) |
29/10/1982 08/11/2012 11/12/2015 |
26/08/1983 19/08/2013 28/11/2019 |
26/11/1982 |
|
64 |
United Arab Emirates |
27/02/2011 |
01/01/2014 |
|
|
65 |
United Kingdom (amending protocol) (new agreement) amending protocol |
20/06/1974 02/04/1980 22/3/2018 19/12/2018 |
18/03/1975 15/12/1980 18/7/2018 2/10/2019 |
1107 - 05 /07/ 1974 |
|
66 |
USA |
19/03/1984 |
31/12/1985 |
|
|
67 |
Uzbekistan*** |
29/10/1982 |
26/08/1983 |
26 /11 1982 |
Notes
*7 Denmark - The existing Convention shall cease to have effect as from 1.1.2012
* The treaty between Cyprus and the Socialist Federal Republic of Yugoslavia is
still in force.
** The treaty between Cyprus and the Czechoslovak Socialist Republic is still in
force
***The treaty between Cyprus and the Union of Soviet Socialist Republics
is still in force.