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The Right to Relocate to Cyprus – Employees of Cyprus Foreign Investment Companies (FIC)
Key Feature of a Cyprus Foreign Investment Company
A Cyprus Foreign Investment Company (FIC), is an international company which can employ non-EU nationals in Cyprus. Such a company can obtain work permits for relevant employees and residence permits for their family members.
Mr. X, is an Indian national and he decides to relocate to Cyprus, via the establishment of a Cyprus FIC.
In the short term, relocating to Cyprus through the purchase of a minimum €2,000,000 in real estate (which is one of the investment options of the Cyprus Investment Programme), is not of great appeal to Mr. X. Via the FIC he is entitled to a residence permit in Cyprus.
The main criteria for a Cyprus FIC are:
- The third country shareholder(s), in this case Mr. X, must own more than 50% of the total share capital of the company.
- The third country shareholder(s) must contribute at least €170,860 to the share capital of the company. This investment can be used at a later date to fund future expenses incurred by the company when it is established in Cyprus.
A key advantage is that after 7 years, third country nationals can apply for Cyprus Citizenship.
In the shorter term:
- FICs can employ third country nationals, who can apply for appropriate residence and work permits, each of which will be valid for up to 2 years and are renewable.
- Employees can exercise the right for their families to join them in Cyprus.
- The rate of corporate tax rate in Cyprus is 12.5%.
- The Cyprus FIC can also apply for the Notional Interest Deduction Regime, which reduces corporate taxation, by treating new equity in the same way as debt.
- Cyprus has Double Tax Agreements with 67 countries.
- Dividend income is exempt from corporate taxation
- Dividend distribution to the shareholder(s), is exempt from withholding tax.
Additional Benefits Available to Cyprus Companies
Additional benefits for companies established in Cyprus include:
- There is no withholding tax on dividends paid from a Cyprus company to its shareholders, as long as the shareholders are not Cyprus tax resident.
- Tax relief is available, in the form of tax credits, for withholding tax on income received in Cyprus. These tax credits can also be applied to other taxable income.
- There is no taxation on dividend income (subject to conditions).
- The incorporation process is simple and straightforward.
- There are no restrictions on individuals acting as directors and/or shareholders.
- It is generally a fast and efficient procedure to open a bank account.
Tax Advantages Available to Cyprus Non-Domicile Individuals
Please see Dixcart Article: The Cyprus Non-Domicile Regime – An Attractive Tax Regime for Individuals Relocating to Cyprus.
Additional information regarding Cyprus Foreign Investment Companies, can be found in a video on this topic. This video has been prepared by Katrien de Poorter, who works in the Dixcart office in Cyprus.
Katrien de Poorter, and Robert Homem – the MD of the Dixcart Cyprus office, can provide further details regarding Cyprus FICs and the opportunities they provide for re-locating to Cyprus: firstname.lastname@example.org.