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Why Invest In Cyprus

Updated on Saturday 05th December 2020

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Why foreign investors choose to invest in Cyprus

 

Cyprus is one of the most attractive business destinations in the world due to its location, taxation systems and friendly legislation. It is located at the crossroads of three continents (Europe, Africa and Asia providing investors with the opportunity of easy access to and from each area. Also, due to the country’s membership in EU and the Economic and Monetary Union all foreign investors have to opportunity to access the EU market. Our Cypriot company formation advisers can help businessmen invest in Cyprus.
 

The main reasons to invest in Cyprus

 
Cyprus could be considered one of the most appealing investment destinations in Europe, if we are to consider its strategic location which offers access to almost all markets in the world. Among the reasons to invest in Cyprus, we can also mention the following:
 
  1. the low cost of starting and maintaining a business registered here;
  2. the fact that all industries are well-regulated, thus Cyprus is a safe country to do business in;
  3. the positive economic outlook obtained by Cyprus from credit rating agencies in the past few years;
  4. the access to cheap workforce and the high quality of life of local and foreigners living here;
  5. the transparent taxation system which implies low corporate taxes and many double tax agreements.
 
These are just some of the reasons that attract foreign investors to Cyprus who can also relocate here through the Golden Visa Scheme which is one of the most appreciated programs in the world. As a matter of fact, in Europe, Cyprus was one of the first countries to enable such a program for high net worth individuals.
 
If you want to relocate here under the Golden Visa Scheme, our Cyprus company formation specialists can explain all the requirements to meet and the investment options.
 
In 2004, Cyprus became an European Union member state and in 2008 it adopted the euro as its official currency, thus creating new economic opportunities for local companies and attracting important numbers of foreign ones.
If you want to open a company in Cyprus and need assistance, we can help you.

Taxes in Cyprus
 

The Cypriot tax regime is effective, transparent and fully compliant with the EU regulations. One of the most important aspects related to the taxation aspects applicable in Cyprus is the corporate tax, which is imposed at a rate of 12.5%. The corporate tax represents one of the lowest values applicable within the EU area. 

What makes it extremely appealing to foreign investors is the amount of exemptions provided by law. For example profits from sales of securities or from overseas permanent establishments are completely exempt from tax. Also, there is no withholding tax on dividends, interest and royalties paid from Cyprus. Almost all international transactions are VAT exempt. Furthermore, there are over 48 countries that signed double tax treaties with Cyprus. All these make the country a tax heaven and an appealing destination for investors from all around the world.
An important tax to be paid in Cyprus is the value added tax (VAT).
 
Our team of company formation agents in Cyprus can help investors take advantage of the provisions stipulated in the double taxation agreements. 
 

Important aspects when investing in Cyprus  

 
Foreign investors can benefit from numerous attractive policies when starting the procedure of company formation in Cyprus. Numerous restrictions related to the foreign direct investments have been removed.  
 
Those who want to invest in Cyprus and purchase a property here have better conditions, especially European businessmen, residents of a member state of the European Union (EU), who have no restrictions in this sense. Our team of experts in company formation in Cyprus can offer more information on the documents that have to be completed when purchasing a property for residential or commercial purposes. 
 
We invite you to find more reasons to invest in Cyprus in our infographic below:
 
Invest in Cyprus
 

Investment incentives in Cyprus

In order to restore the country’s economy after the restructuration of the Cypriot banking system, the government has taken measures that should encourage economic growth and investment in Cyprus. Among these measures there are:
 
  • - the reduction of time allocated for planning permissions to one month for small business projects and three months for larger business projects;
  • - the building coefficients have been increased by 30%, 25% and 20% depending on the area residential and commercial spaces will be built on;
  • - Cypriot laws allow for casinos to be opened;
  • - tourism will be encouraged by allowing the construction of condo hotels;
  • - foreign individuals can benefit from permanent residency in Cyprus;
  • - foreign investors can apply for Cypriot citizenship provided some requirements are met.
 

Investment legislation in Cyprus
 

All commercial regulations in Cyprus are based on Common Law, accounting and legal transparency. The entire legal system is based on the Common Law principles available in the UK but also aligned with the EU directives, leading to a pro-businesses mentality. Foreign entities wanting to invest in Cyprus will benefit from low start-up and operations costs.  The Cypriot government has set pro-business legislation in order to help the investors that consist in tax incentives, residence and work permits.
 
To attract investment and upraise the economy of the country the Cypriot government liberalized foreign investment for EU and non-EU members established at Foreign Investors Service Centre to offer support to potential investors when it comes to dealing with authorities. 
 
There is no limit on EU member states investors other than those for specific sectors like banking or financial services where a “fit and proper” test is applied. 
Foreign direct investment is protected through legal mechanisms. When it comes to protection Cyprus is submitted to its own laws, EU laws and also international laws. It encompasses multilateral investment treaties, bilateral investment treaties, investment contracts, domestic investment legislation.
 
Businessmen who want to invest in Cyprus should know that there are also restricted investments for EU and non-EU members in sectors like real estate, education, public utilities where every application is taken into account separately.
 
All Cypriot investment treaties protect parties directly investing in Cyprus by ensuring protection from expropriation without compensation, most favored nation provisions, national treatment provisions, fair and equitable treatment, full protection and security, and free transfer of investments and returns.
 
Cyprus has signed the most important Multilateral Treaties (MIT) regarding foreign investment: The Energy Charter Treaty (ECT), The Multilateral Investment Guarantee Agency (MIGA) and The International Center for Settlement of Investment Disputes (ICSID).
 
 Cyprus has also signed a great number of Bilateral Investment Treaties (BIT) and developed a wide network of Double Tax Treaties (DTT) with over 45 states, ensuring that the same income is not levied in more than a country.
 
Our company formation firm in Cyprus collaborates with Bridgewest, an international company formation agent therefore all our clients can benefit both from the knowledge of local lawyers and the expertise and know-how brought by our partners. We deal with international law, corporate administration and management services besides company formation and commercial law matters.
 

Invest in Cyprus: the most attractive investment industries in this country
 

Cyprus offers many attractive investment industries, but there are certain key industries that stand out and are more profitable for investors. If you want to invest in Cyprus, our company formation experts can give you all the necessary details.
 
The financial services and banking sectors
 
Numerous Cypriot companies and international corporations have opened units that offer financial and banking services. The financial sector includes domestic banks, international branches, insurance companies and many others that offer financial intermediary services. Because of its business friendly tax system, Cyrus is a competitive financial center.
 
The shipping sector -  presented by our Cypriot company formation experts
 
Import and export activities are an important part of the country’s economy. Cyprus enjoys a very good geographical position in Europe and it is a good location for shipping-related services. Also, the registration fees for ships are competitive and the country has signed bilateral agreements of cooperation for merchant shipping with numerous countries.
 
The tourism sector
 
Cyprus is a beautiful country and many tourists pick it as their summer vacation destination. Moreover, Cyprus is also a medical tourism destination and this touristic branch is developing rapidly. Foreign investments are numerous in this sector, as they are throughout the hospitality industry.
 
Other attractive investment sectors in Cyprus include the information and communication technologies sector, the research and development sector which enjoys the support of the Cypriot Government, the education sector or the professional services sector including, but not limited to, accounting services or legal services.
 

Real estate – one of the best investment sectors in Cyprus

 
A large number of investors from EU and non-EU countries have found Cyprus to be a great location for real estate investments. While EU citizens can buy properties in Cyprus without meeting any qualifications, non-EU citizens can obtain European citizenship in around 6 months by purchasing real estate worth at least 2 million euros. Once purchased, a Cypriot property can render a 3 or 4% rental yield when it comes to residential buildings.
 
Cities like Limassol and Larnaca are among the most appreciated places to purchase properties in, however, Cyprus offers similar investment opportunities in many other cities and towns.
 

Reliability on professional services

 
Cyprus is known for offering some of the best professional services in many industries. Among these, banking and business support services provided by the skilled workforce which is fluent in English are very appreciated by foreign business owners. When discussing banking, it should also be noted that this one of the best regulated industries in this country.
 
In the last few years, fintech has also started to catch the eyes of young entrepreneurs who have found Cyprus as an excellent location for startup companies in this industry. From cryptocurrency businesses to crowdfunding platforms, Cyprus has become an international fintech hub.
 
If you want to set a startup and need assistance, our company registration advisors in Cyprus are at your disposal with tailored services.
 

English-based legal system

 
Cyprus’ legal system has its origins in the English Common Law, one of the oldest and most secure systems in the world. It is characterized by the friendly and transparent business ecosystem and it also considered as one of the most efficient in the Europe. Moreover, foreign companies can operate here under very familiar terms. Among the laws that still maintain some of the English system traits are the Banking Law, the Trustees and the International Trusts Law, as well as the Company Act.
 
Most of the business forms that can be registered in Cyprus also rely on the English Common Law system.
 
If you have any questions about starting a business in Cyprus, our local agents have the necessary experience to answer them and can also help you set up any legal form.

 

Friendly business environment in Cyprus
 

The country represents a business center in its own right. Entrepreneurs opening their businesses here can benefit both from top quality services like audit, accounting, legal and funds management but also from low operating costs due to the friendly taxation system the country offers. Also the workforce here is very well trained, statistics showing that almost 40% of the Cypriot population aged between 25-64 has acquired tertiary education. The high-end telecommunication services and the easy way of getting around also add to the attractiveness of the country.
 
In addition, Cyprus is one of the few countries able to combine the competitive business environment with a pleasurable lifestyle. The standard of living is one of the highest in Europe and investors can also enjoy here the beautiful nature, culture and art in safe environment.
 
The Doing Business Report created by the World Bank in 2020 ranked Cyprus 54th out of 190 economies for the ease of doing business while.
 
We also invite you to watch a video on why you should invest in Cyprus:
 
 
 
 

Foreign investors doing business in Cyprus

The Cypriot government has managed to create a foreign investment-friendly environment by offering support and incentives to those who want to do business here. Among these, we can mention the following:
 
  • - the corporate tax rate of 12.5% which is one of the lowest in Europe;
  • - the English business language, as 73% of the population speaks it;
  • - the personal income tax which provides for an annual tax-exempt income of up to 19,500 euros;
  • - the highly educated workforce, as 55% of the employees have tertiary degrees;
  • - 5 universities with research and development departments, thus focusing on international innovation trends;
  • - some of the lowest office rental costs in Europe;
  • - no withholding taxes and capital tax exemption.

 

If you need more information about the rewarding business opportunities offered by this country our Cypriot company formation specialists will be at your service. We can help you invest in CyprusContact us for further details.

 

Meet us in Larnaca

Call us now at +357 24 656 406 to set up an appointment with our consultants in Larnaca, Cyprus. Evgenios Erotokritou is the CEO of E.R. Team Global Consultants and he will help you open your company in Cyprus as fast as possible.

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