Cyprus, the third largest island in the Mediterranean, known internationally for its all year sunshine, blue waters, tax regime and its fast and agile economy is fast becoming an international hub for multinational companies.

This should not come as a surprise to anyone since Cyprus offers outstanding incentives for corporations to work and thrive such as a tax rate as low as 2.5% for IP income.

In this guide we will provide a synopsis of these incentives which guarantee that corporations that choose to relocate in Cyprus will enjoy fast growth, increased turnovers and proportionate expansion.

Tax Incentives

• Corporate tax of 12.5% (among the lowest in Europe)
• Attractive IP regime allowing tech companies to reduce taxes to 2.5% (the lowest in Europe)
• Double tax treaties in respect to more than 60 countries
• Incentives for new tax residents allowing up to 50% deductions
• Capital gains and security trading exemption
• Dividend income exemption based on relaxed conditions
• Tax incentives for investment into innovative companies and startups
• Dividend income, royalties and interest are not subject to withholding
• Foreign exchange gains or losses are tax neutral
• Notional interest and expense deduction under certain circumstances.

Legal & Banking

Cyprus legal system is firmly rooted on common law principles and fully applies EU law. Thus, prospective corporations will also enjoy the following:

• Legal stability and transparency
• Full access to European markets without barriers, tariffs, or bureaucracy
• An extremely simple and fast process of launching and establishing corporations
• Very strong intellectual property (IP) protection,
• Modern banking sector and a transparent regulatory framework,
• More than 700 accounting firms and 160 law firms offering a wide range of commercial services

Expert Workforce

Cyprus has an internationally oriented low-cost workforce, fully adaptable to the demands of a globalized and ever-changing economy. This is because:

• Cyprus has the youngest workforce in Europe
• At least 55% has a university degree
• At least 76% of the general population can speak English whereas businesses operate strictly in English
• Employers can take advantage of the entire EU pool without any restrictions

Costs of relocating

Relocation costs are lower in comparison to most jurisdictions. In addition:

• Cyprus is ranked 14th in the EU in terms of cost living
• Housing costs are a staggering 25.5% lower than the EU average
• Professional services are offered at a much lower price than in most developed countries despite their world-renowned quality

Quality and ease of life

And of course, Cyprus cosmopolitan cultural scene and Mediterranean ensures maximum living satisfaction for all prospective residents. In addition, did you know that:

• Cyprus is ranked 5th worldwide in terms of safety (Value Penguin)
• Cyprus has the most blue flag beaches per capita (Eurostat)
• Enjoys the best island economy (fDi magazine)
• Offers extremely short distances all around the island and excellent air connectivity through two international airports

Our services

For a company to attain Cyprus residency its management and control should be in the island. This may include among others holding a Cyprus tax number, bank accounts managed and controlled in Cyprus with a Cyprus tax resident signatory, holding or renting office space in the island (etc).

Once the company proves sufficient substance in Cyprus then there is a shield against any foreign tax authorities attempting to force foreign tax regimes.

Economou & Co LLC is a trusted leader in providing headquartering services. Its dedicated and experienced team can offer full support for each step of the procedure and ensure a streamline process.