Cyprus

Why Cyprus:

  • Cyprus can be the access point to the EU market for foreign investors
  • Cyprus possesses a well-trained and versatile labour force with fluency in English
  • Cyprus combines the international business environment with pleasurable and balance way of life
  • Cyprus is one of the most popular destinations for Setting up companies. There are various reasons for this such as;
  • 12.5% corporate tax rate, one of the lowest in Europe
  • Companies can be formed in just a few days
  • Non-disclosure and anonymity rights
  • Tax-exempt business profits of non-resident companies and non-resident individuals
  • Tax-exempt gains on the trading and disposal of securities
  • Tax-exempt dividend income (subject to applicable criteria)
  • Holding companies and financing companies are exempt from taxation on interest on deposits.
  • Double taxation treaties with over 50 countries
  • No withholding taxes on payments of dividends, interest or royalties paid to non-residents (subject to conditions)
  • Full member of the European Union
  • Cyprus offers an efficient IP tax regime coupled with the protection afforded by EU Member States and by the signatories of all major IP treaties and protocols
  • Cyprus offers attractive residency and citizenship packages for wealth foreigners individuals and for their families (attach). being a Cypriot citizen is an advantage which entails a plethora of benefits also deriving from the Membership of the Republic of Cyprus in the European Union. Some of them are travel benefits, healthcare, educational benefits, taxation benefits and employment benefits

Citizenships and Permanent Residency Schemes:

Cyprus, a member of the European Union since 2004 provides one of the most attractive, quick and straight forward investment immigration programs to wealth individuals non EU citizens and is the only EU country that offers both options of Permanent Residency or Citizenship without the requirement of residency. Most importantly both programs are based on investment which can be disposed of after a maximum of 3 years as opposed to a donation to the government that applies to most of the other Countries’ programs. Both programs are offered through a fast track procedure enabling the applicant to receive an EU passport within 3 months or a permanent residency permit within 2 months.

Benefits of Cyprus PR

  • Fast track procedure allowing for the issuance of Permanent Residence Permit within 2(two months);
  • Permit covers the whole family;
  • No physical residence requirements during or after the application procedure (the applicant, his/her spouse and any dependants need only visit Cyprus once every 2 (two years);
  • No language requirements;
  • A secure investment, rather than a donation like in many countries;
  • Insurance policy against political instability;
  • Children have the right to much lower tuition fees in European Union countries because they will be considered permanent residents of a European Union country;
  • Closest EU country to the Middle East ;
  • Wonderful holiday destination;
  • Low crime rate;
  • Well known and established financial and tax planning jurisdiction;
  • The property acquired will be freehold;
  • No inheritance tax;
  • Property acquired can be rented;
  • One of the lowest property taxes in the world;

Benefits of Cyprus passport

  • EU citizenship;
  • EU passport;
  • Granted within 3 months;
  • No residency requirement;
  • No language requirement;
  • Investment can be disposed of after 3 years;
  • Visa-free travel to more than 157 countries. Quickly and cost effectively obtain visas for other countries, such as the USA;
  • A secure investment, rather than a donation like in many countries;
  • Access to the best education and healthcare institutes;
  • Children have the right to much lower tuition fees in European Union countries because they are nationals of a European Union country;
  • Insurance policy against political instability;
  • EU passport holders are entitled to enter, reside, study and work in the European Economic Area (European Union, Iceland, Liechtenstein, and Norway) and Switzerland without a visa.
  • Wonderful holiday destination;
  • Low crime rate;
  • Property(ies) acquired can be rented;
  • There is no inheritance tax;
  • One of the lowest property taxes in the world.;

New Non Domiciled Rules (A very attractive and tax benefit scheme):

The situation before the Amendment of the law: An individual irrespective of its domicile of origin who used to spend a period or an aggregated period of more than 183 days in a tax year in the Republic of Cyprus was subject to both Income Tax and Special Contribution of Defence (SDC)

Following introducing of new concept: According to the amendments of the Law and the non-domicile rules introduces in July 2015, an individual who is a tax resident in Cyprus but is considered as “not domiciled” in the Republic of Cyprus, will now be exempt from SDC. As a result and given the fact that dividends (either domestic or foreign sourced) and “passive” interest income are also fully exempt from income tax, individuals with tax resident status but not domicile in the Republic will be FULLY EXEMPT from taxation on these sources of income.

Tax effect:

Given the exemptions under Income Tax Law, dividends and interest received from both Cyprus and worldwide sources would be totally exempt from Tax in Cyprus. See below the personal tax computation example

 

Source of income

Amount EUR

Taxes and Contributions EUR

Comments

Employment Income earned in Cyprus

150.000,00

20.000,00

50% exemption

Dividend Income

2.000.000,00

NIL

100% exemption

Interest Income

30.000,00

NIL

100% exemption

Gains from the alienation of shares

1.000.000,00

NIL

100% exemption

Capital gain on disposal of immovable property

500.000,00

NIL

100% exemption if property is located abroad or if in Cyprus is acquired between 16 July 2015 and 31 December 2015

Total

3.680.000,00

20.000,00

 

 

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