International businesses in Cyprus benefit from a modern legal system based on English Common Law, providing full access to European markets. The country boasts a favourable tax regime with beneficial tax policies, strong protection for investments and intellectual property, and simple company set-up and filing requirements. Businesses also enjoy low business administration and operational costs, incentives for EU and third-country workforce, an established and regulated financial services industry, a transparent banking system aligned with EU legislative framework, and high-level infrastructure and connectivity.

Cyprus stands out as a premier destination for international businesses due to its secure and transparent legal foundations, cutting-edge regulatory regime, favourable tax regime, and a strong reputation as a financial hub. The low cost of setting up a business, coupled with the ability to recruit a highly educated and diverse workforce, ensures that Cyprus operates at the highest standards. This has made Cyprus the destination of choice for many major international companies.

A Cyprus resident entity benefits from numerous legal and regulatory incentives, making it one of the most cost-effective jurisdictions in Europe to operate from:

• Tax resident entities are taxed on income from sources within and outside Cyprus.
• The corporate tax rate is a uniform 12.5%, with no state or local taxes.
• Profits from the sale of securities, including the redemption of units or other ownership interests in collective investment schemes, are taxed at 0%.
• There are no withholding taxes on dividends, interest, and royalties paid by Cyprus companies to non-resident individuals and companies.
• Dividends received by a Cyprus company are also taxed at 0% under certain conditions.
• The IP Tax Regime offers an 80% notional deduction on IP-related income and capital gains based on the OECD “nexus” principle.
• Capital gains tax is 0%, except for a 20% tax on gains from specific immovable property transactions. Notional interest deduction is available for equity investments into Cypriot companies.
• Gains from foreign exchange are taxed at 0%, except for trading in foreign currencies and related derivatives.
• The personal tax regime is attractive for international professionals and non-domiciled individuals, with tax deductions for investments into startups.
• Tax losses may be carried forward for five years.
• There are no immovable property taxes, no minimum capital requirements, or thin capitalization rules.
• Shipping companies benefit from a competitive tonnage tax and an approved EU open registry.
• Cyprus also offers access to over 60 double tax agreements.