Strategic location, favourable tax regime, well-developed infrastructure, skilled workforce, and government support have positioned Cyprus as an attractive hub for businesses and investors worldwide. What’s more? – Agreeable climate, holiday destination feel, and high standard of living.
In this article, you will learn about the key factors that make Cyprus an ideal jurisdiction for international investments.
Strategic Location
Cyprus boasts a strategic geographical location at the crossroads of Europe, the Middle East, and Africa. This advantageous position enables businesses to access and connect with major markets in these regions efficiently. With its well-established shipping sector, Cyprus serves as a prominent maritime hub.
Favourable Tax Regime
One of the primary reasons why Cyprus has become a preferred destination for international investments is its favourable tax regime. The country offers a competitive corporate tax rate of 12.5%, which is one of the lowest in the European Union.
In addition to low corporate taxes, Cyprus has an extensive network of double tax treaties with over 65 countries, including key economies worldwide. These agreements aim to prevent double taxation and provide investors with tax advantages, such as reduced withholding tax rates on dividends, interest, and royalties.
Furthermore, Cyprus offers various incentives and exemptions, such as exemptions on capital gains, interest income, and dividends. This makes it an appealing destination for investors and high-net-worth individuals looking to optimize their tax positions.
Attractive Hub for New Companies and Talents
Cyprus has become an attractive hub for new companies and startups, fostering innovation and entrepreneurship. The government actively supports and encourages the establishment of innovative ventures through various initiatives, funding programs, and incubators. These efforts contribute to a vibrant business ecosystem, attracting both local and international talents and fostering collaboration and growth.
Government Support
The Cypriot government actively supports foreign investments through a range of measures and incentives. Some examples of government support programs for international investors in Cyprus include:
- Cyprus Golden Visa: Effectively replacing the Cyprus Investment Program (CIP), this program allows high-net-worth individuals and their families to acquire Cypriot citizenship by making a significant investment in the country.
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Cyprus Permanent Residence Program (PRP): This incentive offers non-EU nationals the opportunity to obtain permanent residency in Cyprus by investing in real estate.
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Start-Up Visa Scheme: This scheme is designed to attract foreign entrepreneurs and innovative start-ups with high-growth potential to Cyprus.
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Intellectual Property (IP) Box Regime: This regime offers tax incentives for businesses that hold intellectual property rights in Cyprus. Under this regime, qualifying IP income is subject to a reduced corporate tax rate of 2.5%.
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Regional Cooperation and Free Trade Agreements
Cyprus is a member of the European Union, providing businesses located on the island access to the EU’s single market, with its benefits of free movement of goods, services, and capital. Additionally, Cyprus has entered into various bilateral and multilateral free trade agreements, further facilitating trade with neighbouring countries and regions.
- European Union (EU): This provides businesses in Cyprus with access to a market of over 450 million consumers, as well as a standardized regulatory framework that makes it easier to trade and conduct business across the EU.
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Eurozone: As an EU member state, Cyprus also forms part of the Eurozone, a group of countries that have adopted the euro as their official currency. The use of the euro streamlines financial transactions and reduces currency exchange costs for businesses operating in Cyprus and conducting trade with other Eurozone countries.
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European Economic Area (EEA): The EEA includes all 27 EU member states as well as three EFTA member countries: Iceland, Liechtenstein, and Norway. The EEA Agreement allows these EFTA countries to participate in the EU’s single market, ensuring the free movement of goods, services, capital and people.
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Agreements with Neighbouring Countries: Cyprus has signed agreements with countries like Egypt, Jordan, and Syria to enhance trade relations and cooperation in various sectors.
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The Eastern Mediterranean Gas Forum (EMGF): In 2019, Cyprus, along with Egypt, Greece, Israel, Italy, Jordan, and the Palestinian territories, established the EMGF. The EMGF aims to promote regional cooperation and the development of the region’s natural gas resources. Through this forum, member countries collaborate on energy-related projects, infrastructure development, and the creation of a regional gas market, enhancing energy security and economic integration in the Eastern Mediterranean.
By actively engaging in these agreements, Cyprus continues to position itself as an important player in regional trade and a gateway for businesses seeking to access markets in Europe, the Middle East, and Africa.
