Cyprus can be an ideal jurisdiction to set up and or relocate an IP Company. If your Company is an owner of an IP asset, then Cyprus could be the place to be. A Cyprus IP Box Company offers several advantages that include very favorable tax advantages that are in line with the OECD and EU guidelines, a legal framework that can offer asset protection and an operating environment that your team can enjoy working and have access to a large pool of highly educated talents.
All “Qualifying intangible asset” can enjoy a tax deduction that can lead up to 80% of the taxable profits derived from this asset and effectively a Corporation Tax that can be as low as 2.5%. A qualified asset is an asset which was acquired, developed, or exploited by a person in furtherance of his business, (excluding intellectual property associated with marketing) and which is the result of research and development activities and includes intangible assets for which only economic ownership exist. For example, patents as defined in the Patents Law, computer software and other IP assets that are non obvious, useful, and novel.
In addition, the Company can benefit from the use of a large number of Double Tax Treaties that Cyprus has signed as well as the Relief under the EU Interest and Royalty Directive that allow the Company to be excluded from the payment of withholding tax at a foreign jurisdiction on incoming Royalties.
Other tax benefits include 0% tax on dividends payable to foreign shareholders and Cyprus non domicile tax residents and 0% capital gains tax on the Sale of the Company.
Another very important fiscal benefit to the Company is that can attract talent from all over the world that they can benefit from a very advantageous tax regime. Individuals who are not considered to be “domiciled” in Cyprus would be exempt from payment of taxes on worldwide income from:
- Sale of securities