Cyprus has a number of comparative advantages that have contributed towards the country becoming an important international business and investment centre, such as business-friendly tax and legal system, strategic location, well developed socio-economic infrastructure, and a broad range of international financial and business services.
The Government of Cyprus is promoting numerous measures and initiatives to further establish the country’s appeal as an investment destination, considering the numerous challenges arising from increased competition and globalization. Many measures are also being implemented to facilitate the elimination of unnecessary red tape, in addition to efforts made to remove regulatory barriers for enterprises’ establishment.
Over the years, Cyprus has also developed an extensive network of Double Tax Treaties (DTT) which facilitate international investment to and from Cyprus. Cyprus has managed to maintain and complete a number of treaties with exemplary beneficial provisions that provide an invaluable tool for international businesses in combination with favourable aspects of the Cyprus tax system.
It is also worth noticing that Cyprus is expanding and updating its double tax treaty network. For example, new DTTs with Saudi Arabia and an amending protocol with Ukraine entered into force in 2019 and are effective for Cyprus as of 1 January, 2020, which is the same effective date for the amended Cyprus-Russia DTT for Cyprus. These have shown the administration’s efforts in making their investment environment attractive to foreign companies.
The Cyprus tax, legal and regulatory system provides excellent opportunities for international businesses. Cyprus’ 12.5% corporate tax rate and tax exempt status of gains, produced from the sale of overseas securities and dividends, underpins its advantageous position in the EU. When these benefits are coupled with affordable costs for high-level professional services, Cyprus stands out as an attractive investment destination for investors across the world. Thus, Cyprus continues to emerge as a reputable and accredited onshore primary location for the business activities of multinational companies.
While Cyprus taxation does appear very enticing, do take specialist advice to make sure you understand how all the rules affect your business. Please do contact specialized advisers at 5B Five Bravo to help you make sure you take advantage of all the tax benefits Cyprus to offer.
