Cyprus is a leading business center worldwide with one of the most favorite tax regimes in the EU along with an advanced business infrastructure and highly educated professionals.
The island is one of the largest ship management centers in the world. At the same time it is one of the leading global hubs for Forex companies. Cyprus enjoys one of the highest growth rates in the EU (2.9% in 2016) and (3.5% in 2017) with greater expansion expected in the coming years.
The Cyprus memorandum with the European Union enacted in March 2013 has been completed successfully on June 2016 allowing the Cyprus Economy to focus on investment and expansion. Investment policies are now easier to implement thus driving one of the fastest economic growths in the EU. The memorandum required minimum changes on the tax regime of Cyprus allowing it to keep and even improve its attractiveness as an international business hub.
Cyprus was a British colony from 1878 to 1960 during which the majority of contemporary legal instruments and legislations were enacted in accordance to common law principles. This legal system is also in line with EU laws and is OECD compliant. Furthermore, the accounting and audit perspective follows the Generally Accepted Accounting Principles (GAAP) and International Financial Reporting Standards (IFRS) also adopted by the EU, making it easier for international expansion and trade.
The Cyprus Shipping registry ranks among the top 10 worldwide and the top three in Europe. This is mainly due to the competitive Tonnage Tax system that is accepted worldwide, the developed infrastructure and a very competitive tax system with the lowest corporate tax rates in the EU (12.5%).
Many countries have substantial withholding taxes and extensive reporting requirements on transactions. Cyprus has minimum requirements for transactions, which increases the speed and efficiency of day to day business.
In extent, companies or non-tax-residents enjoy the zero withholding taxes among dividends/rents/interest (Special Defence Contribution) including individuals, companies and foreign shareholders. Even in cases where individuals are tax resident in Cyprus, they are exempt if they are non-domicile.
Cyprus has one the lowest corporate tax in the European Union. It has remained materially the same over the memorandum period and changed immaterially from 10% to 12.5% (current) creating a continuous favorable tax frame for contacting businesses. As an EU member and OECD compliant, Cyprus is a fully respected and recognized legal partner.
Cyprus is at the crossroads of big international energy routes and is also estimated to be surrounded by substantial oil and gas resources, a big part of which falls within the Cyprus Exclusive Economic Zone.
The island nation has discovered offshore gas with estimated reserves of over 4 trillion cubic feet, subject to further studies. Global energy giants including ExxonMobil, Total of France, Qatar Petroleum and Eni of Italy won licenses to explore and drill for oil and gas off the southern coast of Cyprus.
Foreign investors that purchase property in Cyprus of at least €300.000 and at the same time provide evidence of a steady flow of annual income transferred on a regular basis from foreign countries, are allowed to request a Permanent Residence in Cyprus. The program includes investors and their families, visa-free travel to Cyprus and the right of residence. The program includes family members, spouse, any underage children and adult dependent children up to 25 years old. This program is valid for life.
Foreign investors can acquire Cyprus citizenship if they meet specific financial criteria like direct investments, bank deposits, local business activities, and donations to government funds. The investment must be up to 2 million euros and a minimum holding in a Cyprus residence of €500,000 in value. Other conditions, such as clean criminal records are required. Citizenship is also granted to the investor's spouse, under age children and adult dependent children up to 28 years of age. The investor and his family that obtain a Cyprus Passport are entitled with the same rights as any other EU or Cypriot citizen.
Key reasons for the appeal of Cyprus as an international Business center: