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Cyprus Benefits

As Cyprus is now to become regulated making it an even more attractive location for offshore company’s we take a look at the numerous benefits associated with Cyprus companies.

One of the main benefits associated with setting up an offshore Company in Cyprus is that Cyprus has an attractive Tax System for foreign investment. With correct Cyprus Company Tax Structuring tax leakage can be minimized.

Tax advantages in Cyprus

  • Cyprus has just 10% income tax being one of the lowest rates in Europe
  • Foreign tax burden is assumed to have covered tax paid by lower level subsidiaries, therefore dividends received from subsidiaries or associates are rarely taxed
  • Where a dividend is not exempt they are subject to a defence tax of 20%, but any tax withheld at source can be deducted from this even if it is from a country that does not hold a double tax treaty with Cyprus
  • Tax credits are available as per any double tax treaties held by Cyprus, which currently holds in excess of 40 double tax treaties with more under negotiation
  • If there is not a double tax treaty in place Cyprus affords a credit for any foreign tax paid on the income
  • No tax on disposal of securities as defined by tax law
  • No withholding taxes on payments of dividends, interest or royalties paid to non residents (subject to conditions)
  • Profits from sale of shares in the stock exchange are tax exempt
  • No capital gains tax in Cyprus on sale of immovable property held outside Cyprus if the company is tax resident in Cyprus
  • Losses can be carried forward and set off against future profits indefinitely.
  • There is Group relief available to set of the loss of one company with the profit of another providing that both companies are tax resident in Cyprus
  • The tax law of Cyprus was reformed in 2002 and is considered one of the most modern, effective and simple tax system in the EU
  • Cyprus tax law is completely in line with EU and OECD regulations and all of Cyprus’s double tax treaties are based on the OECD model

Other benefits
  • Cyprus is a full member of the EU
  • Cyprus location is very central and is often referred to as the gateway to Europe
  • The majority of the Island is English speaking
  • The main currency is Euro, but it can operate easily in a variety of currencies
  • Companies can be opened within a few days
  • Cyprus has a reputation for having a modern and competitive infrastructure

So you see Cyprus is definitely a jurisdiction to be evaluated when considering incorporating an offshore Company and its commitment to developing and optimizing it financial sector can only see more improvements in the future..

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