Why is Cyprus So Attractive to Companies and to People?
Advantages for Companies in Cyprus
- Cyprus is a member of the EU and therefore has access to European Union Conventions.
- Cyprus has an extensive network of Double Taxation Treaties.
- Resident companies are generally taxed at 12.5% of their business profit.
- This means that Cyprus is a good location for trading entities.
- Cyprus is an attractive location for holding companies. There is no tax on dividends received and there is an exemption from withholding tax on dividends paid to non-resident shareholders.
- There is no capital gains tax, with one exception.
- Cyprus offers a number of tax efficiencies for royalty structures. 80% of the profits from the use of intellectual property are exempt from corporation tax, which reduces the effective tax rate on intellectual property income to less than 3%.
Advantages for Non-dom Individuals in Cyprus
Individuals qualifying under the Non-domicile tax regime are exempt from the ‘Special Defence Tax’ (SDC) and are exempt from taxation on the following sources of income:
- Interest; and
- Dividends; and
- Capital gains (other than on the sale of immoveable property in Cyprus); and
- Capital sums received from pensions, provident and insurance funds; and
- Capital sums remitted to Cyprus
All of the tax benefits detailed above are enjoyed even if the income has a Cyprus source and/or if it is remitted to Cyprus.
In addition there are: NO wealth and NO inheritance taxes in Cyprus.