Why invest in Cyprus..
Strategic Location
Cyprus is geographically located between three continents, Europe, Asia and Africa. This strenghtens its position as a major Eastern Mediterranean trading post as well as a renowed international business and services centre. This vintage positioning allows Cyprus to act as a point of exchange between these three continents, therefore, offering businesses easier access to new markets.
This positioning also makes the island an active transshipment centre that facilitates the shipment of goods into and out of the European Union effectively qualifying it as a business hub.
Beneficial Tax System
The nation boasts of an efficient, transparent and attractive tax structure which fully adheres to EU, OECD, and International Regulations. The country’s tax resident companies benefit from its extensive double taxation treaties with over 43 countries worldwide.
Cyprus’ tax regime has the following highlights:
Profits of Cyprus tax resident companies are taxed at a flat rate of 12.5% which is the lowest corporate income tax rate in the European Union.
Foreign sourced dividends are generally exempt from tax when received by Cypriot tax resident companies.
Disposals of shares and other qualifying securities (such as corporate bonds) are exempt from tax, provided the disposed company does not hold any immovable property in Cyprus.
Generally no withholding taxes on payments from the island.
Profits of a foreign Permanent Establishment (PE) are exempt from taxation, under easily met conditions.
Low individual income-tax rates: individuals earning less than 19,500 euros per annum pay no income tax, while those earning more than 60,000 euros pay a tax of 35%.
Tax regime favors holding companies, finance institutions, Investment Funds, IP companies and value chain transformation companies.
These tax incentives reduce the cost of doing business in this country. For a business owner in Cyprus, this allows for competitive pricing as well as good profits.
Efficient Banking and Professional Services
Cyprus has a large number of highly educated and skilled certified public accountants and registered advocates ready to offer their services. Their competence is boosted by their multilingualism. They speak English and Greek and some offices have Russian speakers. Therefore, you can easily get access to top notch legal services, accounting, management consultancy, and financial advisory.
Additionally, Cyprus has a well organised banking system which takes care of the diverse needs of individuals and companies. These banks offer these services: asset management, syndicated loans, retail banking. custodial services, private banking and investment banking.
Robust Legal and Regulatory Framework
Cyprus has a comprehensive legal structure which traces its origins in the English Common Law practices. This structure is friendly to business because it promotes transparency and efficiency in dealings.
It also gives foreign firms a familiar platform within which they can carry out their activities. Cyprus’ legislations that are relevant to foreign investments include but not limited to:
Banking Law
Investment services and Regulated Markets Law
Trustees Law
International Trusts Law
Cyprus Stock Exchange Law
Company Law Chapter 113
Law on the Prevention and Suppression of Money Laundering
Insurance Services Law
Merchant Shipping Law
Limited and Unlimited liability partnership chapter 116
Hydrocarbon Opportunities
This country and the European Union at large, are highly dependent on energy imports. The EU produces 48% of its energy needs and imports the remaining 52% from Russia, Algeria and Norway. The European Union majorly produces nuclear energy as opposed to oil and natural gas.
The island’s substantial oil and gas reserves could change the European Union’s energy narrative. According to US Geological Surveys, the level of untapped oil and gas reserves in this region is immense. As a result, the government is on course to construct an energy centre that will have storage facilities, transit equipment as well as exploitation mechanisms.
Hydrocarbon exploitation will not only solve the country’s energy deficits but also attract business people from all over the world thereby boosting the country’s economy.
A Beautiful Working and Living Environment
As compared to other global centres of business, Cyprus has a considerably lower cost of living but at the same time ranked 23rd in the world regarding the quality of life. Where else in the world will you find a high quality of life at a such a low cost.
Besides, Cyprus is safe due to its very low crime rates. In fact, in 2015, the country has been ranked the safest smaller country in the world and fifth worldwide by ValuePenguin. The country experiences sunshine throughout the year and hence it is a conductive place to live while doing business. The island’s strong inclination to art and culture adds to its enviable lifestyle.
Vis-a-vis transport, commutes are significantly reduced by the four-lane highways which link all the main points. All these factors point towards lower stress levels which are known to facilitate success in business.
Attractive Legislation for Citizenship
Foreign investors in Cyprus are given a unique opportunity to obtain a Permanent Residence Permit or EU/Cyprus citizenship which can be secured within 3-4 months. Before being granted a permit or citizenship, the government carries out rigorous procedural due diligence.
The upside of both arrangements is that an investor needn’t reside in Cyprus and neither do they become tax residents.
Strong Shipping Credentials
Cyprus is an internationally acclaimed shipping centre. It has more than 140 shipping related firms. It has one of the largest shipping registries in the European Union. Additionally, the country is the biggest third party ship management centre in the EU.
Cyprus’ diverse and robust maritime sector that accounts for more than 7% of the country’s Gross Domestic Product (GDP) is attributed to its strategic location on active trade sea routes as well as latest shipping infrastructure and shipping-favourable legislations.
Shipping companies may opt to pay tonnage tax rather than income tax on profit derived from ship management or chartering activities, under easily met conditions. The country’s Tonnage Tax System makes the country a desirable destination for such business. Other shipping-friendly regulations include:
Favourable ship registration fees and costs.
Cyprus is a signatory to maritime conventions on pollution reduction, safety and security.
There are no nationality restrictions on ship crew.
Therefore, a shipping-related investment is one which promises good returns. Besides, Cyprus’ shipping success guarantees an efficient flow of goods in case your business relies on importation and exportation.
European Union and Eurozone Member State
Cyprus gained membership into the European Union on 1st May 2004 and adopted the use of the Euro in 2008. Membership to the European Union is a vote of confidence which is useful in guaranteeing stability and safety for investors. Moreover, businesses in Cyprus have complete access to European Union markets and the associated benefits.
Advanced Infrastructure
Cyprus has invested heavily in telecommunications, shipping and road and air transport. It is home to sophisticated roads with multiple lanes which allow for faster and efficient movement between points. These roads complement their two world class international airports – one in Larnaca and the other in Paphos which see approximately 10 million visitors come to the island every year. These airports also play a pivotal role in linking Cyprus with numerous global destinations.
It also has two deep sea ports located in Larnaca and Limassol. Limassol is a popular pause point for international cruise liners. Besides, it handles freight cargo and it utilises advanced logistic solutions which reduce costs and increase efficiency.
This country is considered a telecommunications centre because it has satellite and submarine fiber optic cables which connect it to the rest of Europe, Asia and the Middle East. The eastern Mediterranean island also has fast internet connectivity.
Furthermore, an English-based system of education, reliable and affordable health services, booming tourism industry as well as macroeconomic stability boosts Cyprus’ credentials as a desirable investment destination.