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Why Do Business in Cyprus? Cyprus as an International Finance Centre

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The EU accession of Cyprus in 2004 brought with it some much needed taxation and corporate law reforms. Cyprus is a very attractive base of operations not only for local business but also for EU member state businesses and non EU nationals. The main reasons why Cyprus is an attractive market for businesses include

  • A low tax regime
    • 12.5% for corporations, which is the lowest in Europe, and Cyprus is not considered a tax haven, so it's not blacklisted with other world tax authorities, and its included in the OECDs white list on tax havens.
    • Low personal income tax, tax free threshold up to EUR19,500 net.
    • No withholding taxes in most cases.
    • Dividends are tax free; foreign beneficiaries are not liable to pay additional tax on dividends (in the form of Special Defense Contribution), and even if you become a tax resident if your domiciliary is not in Cyprus you will still be exempt from Special Defence Contribution (SDC).
    • No capital gains from the buying and selling of securities.
    • No strict transfer pricing rules.
  • EU and OECD compliance, transparency and uniformity in legal matters for taxation and in particular regulated investment markets.
  • EU Passport allowing investment firms registered in Cyprus to offer investment services to all EU member states without the need to re-register in those other member states.
  • Access to beneficial double taxation treaties which allow for the taxation of profits in Cyprus when management and control is exercised here. 
  • Low operating costs, especially for financial, investment and professional services in comparison to the rest of Europe.
  • A highly educated, skilled and multi lingual workforce.
  • English is the most widely used business language.
  • Strategic location and time zone in reference to Europe, excellent sea and air connections.
  • Excellent infrastructure in telecommunications as well as the banking sector.