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Why to choose Cyprus for your Business

ICD Fiduciaries
28 September, 2016

Cyprus is the third largest island in the Mediterranean, situated in the eastern corner of the Mediterranean Sea. It lies at the crossroads of Europe, Asia and Africa, close to the busy shipping and air routes linking Europe with the Arab World.

Cyprus joined the European Union in 2004 and its financial and regulatory environment is in line with the EU standards. Further, it participates in the European Union’s internal market where the principles of free movement of services, goods and capital apply.

The Cyprus economy is heavily based on professional services with three sectors (banking, securities and insurance) dominating the market.

Countryalso retains Double Taxation Agreements with 58 countries across the globe.

The most common route for conducting business in or via Cyprus is by setting up a Cyprus Company in the form of a limited liability company.

Corporate tax rate

In Cyprus, the Corporate Income tax rate is a tax collected from companies. Its amount is based on the net income companies obtain while exercising their business activity, normally during one business year.

Country offers one of the most attractive tax regimes in Europe. The corporate tax rate is 12.5% on trading profits and this constitutes one of the lowest corporate income tax rates in the European Union. Business profits of non-resident companies are tax free.

VAT system in Cyprus

Value Added Tax (VAT) is a tax charged on taxable supplies, of goods, services or both, made or deemed to have been made in Cyprus. It is administered and received by the Tax Departmentin Cyprus.

The standard rate of VAT is 19% and it applies to all goods and services unless specifically excluded.

For the VAT registration, client should provide ICD Fiduciaries only with an invoice and contract on the amount of 16,000 EUR. The procedure takes approximately 1-2 working days for getting number and 2-3 weeks for getting Certificate.

There are no restrictions for the nationality of the shareholder and director of the company in Cyprus. ICD Fiduciaries can obtain a VAT no. for newly incorporated companiesas well.

Cyprus holding company

Cypriot holding company is an ordinary company which, besides having a participation in domestic and/or foreign companies, may also be engaged in other activities such as manufacturing, trading or financing. The company is liable to be taxed in Cyprus on its worldwide income, given that it is managed and controlled in Cyprus.

According to the Cyprus Corporate Income Tax Act, dividends received by a Cyprus holding company from its non-Cyprus subsidiary are exempt from corporate income tax, provided the Cypriot company own at least 1% of the share capital of the paying company.

About the Author

ICD Fiduciaries

ICD Fiduciaries is a consulting firm founded in 2006 in the UK and specializes in creating offshore companies and the opening of offshore bank accounts. www.icd-fiduciaries.com


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