Cyprus has a long-established reputation as a highly compliant jurisdiction and attractive location to foreign investors – both European Union (EU) and non-EU nationals – due to its highly competitive advantages as a growing tech hub and business center within the EU.
When it comes to choosing the right location to establish international and regional headquarters, Cyprus is increasingly gaining momentum as a prime contender in the minds of decision makers of tech multinationals by offering numerous complementary services. Strategically located at the crossroads of three continents (Europe, Africa and Asia) Cyprus is a modern EU member-state which tends to become an East Mediterranean economic hub by providing international businesses with the ideal environment to set up, grow and prosper.
An attractive tax system, wide access to markets, strong economic growth, a pro-business environment, tech-savvy talent, low operating costs and a number of incentives, including a competitive intellectual property regime, are only a few of the reasons why Cyprus is one of the top headquartering jurisdictions. A number of global information communication technology companies have established their business in Cyprus while servicing clients in Europe, Middle East and North Africa, and beyond with success.
Our Firm’s Assistance
Mylonas Law provides a complete package of support and advice during the planning set-up phase and throughout the operation and running of the company.
Regarding the planning set-up phase, we offer advice in order to achieve the best structure from a legal and tax perspective in cooperation with our tax expert affiliates.
Throughout the operation and running of the company, we can assist:
• with the formation and administration of a Cyprus company (providing a complete package of administration and/or nominee services for a Cyprus company such as director, secretary, nominee shareholder and registered address);
• with the administrative procedures in relation to the redomiciliation of companies in Cyprus (handling submissions and fillings of all relevant documents with the registrar of companies in Cyprus in order to obtain the temporary and continuance certificate from the registrar of companies);
• with the opening of bank accounts, by directly contacting the proposed banking institution and completing all the relevant documentation including, but not limited to, the bank application forms;
• with any real estate matters;
• and with the accounting and bookkeeping of the company. Moreover, we provide assistance to companies in relation to their tax obligations via our tax experts affiliates.
In addition to helping you establish and grow your business, we also aim to help expats and their families with relocation and living aspects, such as administrative procedures, immigration-related matters (assisting with obtaining permanent and temporary residency permits and work permits), housing, education and job seeking.
Why Relocate to Cyprus?
• Geostrategic location offering market access to 500m EU consumers and close proximity to Middle East and North Africa.
• Positive economic outlook. Robust GDP growth. One of the fastest growing economies.
• Fast track mechanism for licensing and immigration for non-EU nationals.
• Simple and fast establishment of a business.
• Access to tech-savvy EU talent pool and a well-educated, highly skilled, multilingual workforce.
• Low cost of doing business for high-quality professional services – lower labor costs for technical and professional talents than in other major EU capitals.
• Strong business support services at highly affordable costs.
• Pro-business attitude, excellent regulatory framework and a solid, impartial and credible legal system aligned to the United Kingdom common law.
• High quality of life for expats and their families. Enviable lifestyle in a safe (ranked as the 5th safest country in the world – Value Penguin 2015), clean and healthy environment with high living standards. Quality healthcare. Top four best retirement destination globally (Knight Frank 2016). Education facilities, modern housing and a much lower cost of living than many other EU countries.
Attractive and Transparent EU-Approved Corporate Tax System
The tax system’s main features are:
• Taxation is based on residency status.
• 12.5 percent corporate tax on corporate trading profits, which is among the lowest in the EU.
• Capital gains on Cyprus-situated immovable property (and on non-quoted shares directly or indirectly holding such Cyprus-situated immovable property) are taxed separately in Cyprus.
• Profits from disposals of corporate “titles” are unconditionally exempt from corporate income tax. Whereas “titles” are defined as shares, bonds, debentures, founders’ shares, and other titles of companies or other legal persons incorporated in Cyprus or abroad and options thereon.
• Favorable and efficient intellectual property (IP) regime for tax optimization and maximum protection and certainty for IP owners. Low tax rate 2.5 percnt on income earned from IP assets, 0 percent tax on the gain from disposal of IP assets as a capital nature transaction and up to 20 years amortization period. It applies to a wider range of income compared to other similar European scheme.
• Corporate tax on sale of securities; 100 percent exemption.
• No withholding tax on dividends, interests and royalties paid to non-residents of Cyprus except in the case of royalties earned on rights used within Cyprus. Royalties earned on rights used within Cyprus are subject to withholding tax of 10 percent (5 percent in the case of cinematograph films); however, these may be reduced or eliminated by double taxation treaties entered into by Cyprus or by the EU Interest and Royalty Directive as transposed into the Cyprus tax legislation.
• Attractive and constantly expanding double tax treaty network with more than 65 countries.
• Dividend income generally exempt from tax (subject to relaxed conditions).
• Applicability of all EU directives.
• Special income tax incentives for expat executives and new tax residents of Cyprus.
• Foreign exchange differences are tax neutral for corporate income tax purposes (i.e. forex gains are not taxable and forex losses are not deductible).
• Group relief availability (for 75 percent holdings); companies of the same group to transfer tax losses from loss-making group companies to profitable group companies.
• Tax exempt re-organizations; reorganization relief is available to allow certain transactions to take place in a broadly tax-neutral manner, with exemption from corporate income tax and stamp duty.
• Advanced tax ruling practice offers safety and predictability for investments.
• Attractive personal tax regime for international professionals and non-domiciled individuals (Cyprus Non-Domicile Tax Regime for Individuals).
• Tax deductions for investment into start-ups.
• Competitive tonnage tax for shipping companies and an approved EU open registry.
We look forward to meeting you in person when in Cyprus next!
For further information on this topic please contact AMG Mylonas & Associates, LLC by telephone +357 25 101080 or by e-mail [email protected]
The information provided by Mylonas Law is for general informational purposes only. It does not constitute or should not be read as a legal advice. You should not act or refrain from acting based on any information provided above without obtaining legal or other professional advice. No responsibility can be accepted by the authors or the publishers for any loss occasioned by acting or refraining from acting on the basis of this publication.