Despite the difficult financial crisis Cyprus is going through, all signs suggest that Cyprus is still a major International Business Centre and remains a very attractive place to do business.
The island’s recovery process is moving smoothly and the country is expected to return to markets within this month. Cyprus has outperformed all expectations and the speed of the recovery process has been impressive so far.
Equally importantly, Cyprus is still a very appealing financial centre. Reports from large accounting and legal firms suggest that large numbers of new companies are being registered in Cyprus. Most Russian and other foreign nationals have kept the companies they already had in Cyprus before the bailout of March 2013 and more importantly new companies are being formed at high rates. Cyprus is still an attractive jurisdiction for the following reasons:
• Corporate tax rate remains at 12.5% which is still one of the lowest in Europe.
• Extensive network of double tax treaties with more than 40 countries.
• No corporate income tax on dividents of a Cypriot company.
• A reputation established over decades for being a highly professional international business centre with high calibre professionals such as lawyers, accountants and investor friendly authorities.
• Cyprus is an ideal jurisdiction to hold intellectual property. According to Cypriot legislation only 20% of the net profits from intellectual property rights are subject to tax. At a tax rate of 12.5% this means an effective tax rate of only 2.5%.
• Investment funds: Cyprus is an ideal and popular location to set up an investment fund. A Cypriot investment fund is exempt from any tax on gains or profits of equity securities and bonds.
