Cyprus: Offshore Business Sectors
Cyprus is a convenient and popular location in which to locate professional services operations servicing Europe, the Middle East and Africa. Several hundred business and professional consultancies have fully-staffed offices on the island.
Before the merging of the offshore and onshore regimes, partnerships as well as companies could have offshore status, which conferred tax advantages for both employers and employees (see Offshore Tax Regimes). The pure partnership form has traditionally not often been chosen due to the open-ended liability of the partners, but the Limited Partnership permits individual partners to share profits but with only limited liability. There is no tax on the income of individual partners; the profits of offshore companies (whether free-standing or in a limited partnership) were taxed after deduction of expenses at 10%. See above under Financial Holding and Investment Activities for comments on the tax treatment of repatriated Cyprus profits in Western countries.