Long standing position of Cyprus being as international business center and trough new ideas, now Cyprus is trying to attract and gain attention from entrepreneurs. Thus it is good time to think to relocate and/or establish new business lines and use corporate benefits in this sunny island.
In the recent years Cyprus as well gained more players in fintech and high tech industry, so now Cyprus could be classified as one of the key players of these sectors in Mediterranean region. For above reasons, Cyprus government is looking ahead and is trying to assist for the new business efficiently start their operations in this island.
One of key elements already implemented, is to offer key decision makers/ individuals to have the beneficial tax regime and be able to use tax exemptions. Cyprus tax system is very efficient for the individuals, who are holding key positions and their salary levels are high. In some cases for the individuals it is possible to claim 50% of the salaried income . For the new established companies Cyprus could offer a competitive tax regime and a corporate tax rate of 12.5 per cent.
As an additional key factor, for the companies who are working in the intellectual property field, such business can use the Cyprus IP Box, which allows for an 80 per cent tax deduction under the Nexus approach. Thus it is possible to achieve trough additional deductions a potential effective tax rate of just 2.5 per cent.
Through the years Cyprus has increased and done numerous amendments to its immigration law, so to attract third country nationals to setup their business in Cyprus and obtain residency permits. This could be achieved by using reasonable immigration rules.
Finally, Cyprus is member of EU and it is location is strategically beneficial for business and individuals as it has short distance to Europe, Middle East and other continents. To promote further attractiveness of the new investors, recently Cyprus government released the Action plan, which shall further increase the attractiveness of new investors to come to Cyprus. Such plan could be found at the official government page. The main objective of such Action Plan is to create a business friendly environment towards the investors.
The key points of the Action Plan announced by the Finance Minister Constantinos Petrides last month could be identified in the below short key elements:
Residence permits and Employment initiatives
– Rights for Naturalization
– Rights to social insurance benefits
– Introduction of digital Nomad visa type
– Family reunification for 3rd country nationals
– Fast track policy for employing third country nationals
– Increased tax deduction for research and development cost
– Extension of tax exemption for investment innovative companies
Please note that these are only few of the listed initiatives and their list is much bigger. The above includes the key elements, so for Cyprus expand further and increase the competitiveness in the region and worldwide. It is crucial to mention, that Cyprus is increasing usage of digitalization. Moreover, as per announcements made there shall be additional support from government for training programs for the employees, so their skills and knowledge are competitive and could generate higher market share to the companies.
It is crucial to say that Cyprus has successfully been selected as a headquarter of well-known companies in the past and it is proven that they remain until now in Cyprus. Before making any business decision it is very important for investors to study the new action plan, to identify the strong points indicated therein and successfully setup their business operations here in Cyprus.