Cyprus has developed into a reputable international business and financial center due to the favorable tax regime that the island offers.
Following the accession of the Republic of Cyprus to the European Union in 2004, its tax legislation is compliant with EU requirements and with the OECD initiative against harmful tax practices.
Furthermore, following changes made in 2008, Cyprus has also satisfied the requirements of the Group of Twenty and the OECD by substantially implementing the internationally agreed tax standard on exchange of information.
The main advantages offered by Cyprus to international business companies with local tax residency status are the following:
- Double tax treaties with 45 countries
- Favorable tax regime including corporation tax rate of 10%
- No tax on dividends payable to non-Cypriot tax residents
- No withholding tax on interest payable to non-Cypriot tax residents
- No tax on dividend income with limited exemption
- No tax on profits from operations of permanent establishments maintained outside Cyprus
- No tax on profit from sale of shares, bonds and other securities
- No capital gains tax on profits arising from the disposal of immovable property situated outside Cyprus
Other benefits enjoyed by Cypriot companies include:
- Cyprus is a full member of EU
- Strategic geographic location
- Excellent communications
- Availability of free zone area
- Liberal foreign direct investment regime
- No foreign exchange control
- Highly qualified, well educated and multilingual labour force
- Efficient legal, accounting and banking services