The Government of Cyprus has developed “CYPRUS VISION 2035”, a long-term strategy for sustainable growth for the Island. It’s main objective is to transform Cyprus to be one of the world’s best countries to live, work and do business in. This will be achieved by becoming a dynamic and competitive economy. Driven by research, scientific excellence, innovation, technological development and entrepreneurship, and a regional hub in these fundamental areas. Cyprus will be transformed into one of the world’s leading model nations with a thriving, resilient economy and a just, inclusive society.
Developing the Technology and Innovation Ecosystem is central in the Cyprus Government’s objectives. Thus introduced a new strategy for attracting foreign companies and skilled talent to Cyprus. The strategy mainly focuses on high technology, shipping, pharmaceutical, innovation, and research and development companies. This strategy included a series of new incentives concerning residency, taxation, and employment, through a fast, simple, and streamlined procedure.
There are many reasons that prompt ICT companies to choose Cyprus as a relocation destination:
• Attractive Corporate Taxation
-Advantageous Intellectual Property Box scheme approved with EU, where the Company can benefit up to 80% deduction on its taxable income, i.e. reducing the effective tax rate down to 2.5% (whereas standard corporation tax rate is 12.5%).
-Profit from the sale of shares and other instruments that carry a title such us bonds and debentures are tax free.
-Dividend income is tax free except in certain conditions
-Notional interest expense deduction on equity
-Dividend income generally exempt from tax
-Use of a large number of double tax treaties
-Further than that the Government, as from 16 July 2015 proceeded in the division for Cypriot Tax residents between Domicile and Non-domicile residents.
Non-domicile residents are those that:
(i) are not considered as Cypriots as per the provisions of the Wills and Succession Law;
(ii) were not tax residents of Cyprus during the 17 out of the last 20 years. The exemption can apply also for Cypriots that were not tax residents of Cyprus and choose to return to Cyprus.
-Individuals who are not considered to be “domiciled” in Cyprus would be exempt from payment of taxes on worldwide income from:
- Sale of securities (shares in listed or non-listed Companies);
- 50% of the remuneration is exempt from income taxes if Salary earned from employment in Cyprus exceeds 55k (applicable for 17 years), or 20% of the remuneration if it is less than 55k (or EUR8.550 whichever is lower and is applicable for 5 years);
- No Inheritance Tax;
- No Lifetime Gift Tax;
- Use of large number of Double Tax Treaties;
- Interest and dividends paid to non- residents carry no withholding tax
- Tax Residency In 60 Days
The Parliament of Cyprus has recently passed a bill which will be amending the rules for determining tax residency of individuals in Cyprus. The said bill, which was unanimously approved, gives the right to an individual to be considered as tax resident in Cyprus. Provided that the below mentioned three criteria are cumulatively met:
a) remains in Cyprus for at least 60 days during the tax year;
b) carries out any business in Cyprus and/or is employed in Cyprus and/or holds an office to a person resident in Cyprus at any time during the tax year;
c) maintains a permanent residence in Cyprus, which can be either owned or rented by him
- As a member of the EU and Eurozone community, Cyprus ensures safety and stability for investors, while also offering them market access to more than 500 million EU citizens
- Strategic EMEA access. Good geographical location between the EU, CIS, Middle East and Africa regions
- Ease of doing business, supported by a pro-business tax and legal system, modelled on English Common Law
- Included in OECD’s White List of jurisdictions with more than 60 countries
- High availability of multilingual, high-quality professionals, mainly UK and US graduates
- Efficient migration regime that allows smooth relocation of Executives and families
- Capacity to transfer large numbers of employees
- Attractive tax incentives for employees relocating to the island
- High quality healthcare
- High quality international schooling from kindergarten to university – Cyprus is amongst the top in the EU for university graduates per capital.
- A cosmopolitan island with a great lifestyle
- Ranked as the 5th safest small country in the world
- The sunniest country in Europe with 74 blue flag beaches, crowned ‘Cleanest Bathing Waters in Europe, with a consistent 100% score, year after year.