Advantages of incorporation in Cyprus
1.) The lowest tax regime in Europe. Corporation tax rate is 10% on net profits.
2.) Cyprus has 45 plus Double Tax Avoidance Treaty agreements
3.) Allows nominee shareholder and director structure – beneficiary owner’s identity can be hidden from public company record
4.) A full member of EU (since May 2004).
5.) Eurozone member since 2007. Euro is official currency.
Cyprus has the lowest tax regime in Europe and its role as an international financial centre is greatly enhanced because it is an EU member, a Eurozone member and its tax system is in full compliance with EU and OECD requirements. The corporation tax rate is 10% on net profits. Other key advantages include:
- There is no withholding tax on payment of dividends, interest and royalties by a Cyprus company to non-resident individuals or companies.
- Dividend income received in Cyprus is wholly exempt from tax in Cyprus (under certain conditions).
- Profits from the disposal of shares are not taxable for all Cyprus tax residents.
- 50% of interest received is exempted unless the interest arises in the ordinary course of business (e.g. interest on overdue debtor balances).
- There is no restriction in the carry-forward of tax losses. They can be carried forward indefinitely to be set-off against future profits.
- Group relief is available whereby losses from a company can be set off against taxable profits of other companies in the same group.
- Reorganisations, amalgamations, mergers and acquisitions of companies can be effected without any tax implications.
- Exemption from capital gains tax (except on sale of immoveable property situated in Cyprus).
- No exchange control restrictions
- Cyprus has 42 Double Tax Treaty agreements which apply to 40 countries and which can be exploited to minimise tax.
- Confidentiality and anonymity of beneficial owners is safeguarded (true identity is only disclosed to local banks, if a local account is opened and information is not disclosed to any third party or to other countries, except in the case of properly authorized criminal investigation (drugs, terrorism, e.t.c.).