CyprusInternational activities
Cyprus is a member of the European Union since the 1st of May 2004. Because of the affiliation Cyprus modulated her legislation with the orders and the guiding lines of European Union and has proceed with the restructure of its tax system since the 1st of January 2003.
The new tax laws are in accordance to EU and OECD. A main characteristic of the new tax legislation is that from the 1st January 2003, there is not any difference between a local Cypriot Company and an International Activities one. Furthermore the taxation is based on the tax residency.
Cyprus is a country with a good regulatory framework. All international Activities Companies registered in Cyprus have to comply with applicable regulations and auditing requirements. In this respect, a Cypriot International Activities Company has no difference with any other company registered in any developed country in the world and therefore cannot be characterized as it is based in a tax haven jurisdiction . Cyprus has recently been excluded from the ¨Black List¨ of OECD countries that are considered as tax haven jurisdictions. All International Activities Companies have the choice either to operate from their own fully staffed office or to be based in accountants or lawyers offices in Cyprus. Besides the benefits mentioned above, the International Activities Companies can take advantage of their presence in Cyprus in order to establish financial relations between themselves. They are entitled to do business transactions provided that the subject of the transaction is limited to markets outside Cyprus. In this way, Cyprus provides a platform for entrepreneurs from around the world where they meet, negotiate and develop regional and global activities.
The main advantages for the International Business Units can be summarized as follows:
  1. Corporate income tax is at 12,5%
  2. Dividends are excluded from taxes
  3. Income from a business abroad is completely excluded from any corporate tax under certain conditions
  4. Dividends received in Cyprus from a foreign company are excluded from tax in Cyprus under certain conditions
  5. There is no withholding tax on dividends and interest paid to non-residents. Also there is no withholding tax on royalties from sources outside Cyprus
  6. There is no restriction on time regarding the transfer of tax losses in the next accounting year
  7. Collective tax relief for companies in Cyprus
  8. The restructuring, mergers, acquisitions and alliances of companies do not have any tax implications
  9. Capital gains are not subject to taxation except the matter of sale of properties in Cyprus
  10. Agreements to avoid double taxation with other countries
  11. There are no restrictions on the foreign exchange control
The main activities of enterprises, international activities are the following: Regional offices
Many well-known multinational companies have their regional offices in Cyprus. Among them are companies with consuming goods companies like Coca-Cola, and s.c.johnson, high-technology ones such as NCR and BULL, pharmaceutical companies such as Merck and HoffmanLaRoche and press agencies such as AgenceFrancePress, Reuters etc..
Trading
Trade is the most important activity. International Activities Companies are acting as intermediary agents or specialized suppliers for consumer goods, raw materials, machines and miscellaneous equipments..
Logistics
Many businesses have significant quantities of goods in a free zone or warehouses. These can be packed and shipped in smaller quantities in various customers abroad.
Investments
Due to the favorable taxation, a lot of people are using Cyprus as their base for investments, and asset management worldwide.
Other types
Other types of International Business Units, including the headquarters of companies, trusts, consultant services, printing and publishing companies, royalties, construction, insurances, shipping etc.
Why Cyprus?
The main reasons that Cyprus is attractive are the following:
  1. Is a democratic country and has free economy
  2. Strategic geographical locality in the crossway of Europe, Africa and Asia
  3. Telecommunication services including direct connection with more than 200 countries
  4. Effective legal system
  5. Updated auditing system which is based in English system
  6. Well-organized banking-system
  7. Low tax conditions
  8. Double tax treaties with 40 countries mutual protection treaties of foreign investments with 16 countries
  9. Low operational costs
  10. Well-trained H/R
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