Cyprus: Offshore Business Sectors
Cyprus is a convenient and popular location in which to locate professional services operations that cover Europe, the Middle East and Africa. Several hundred business and professional consultancies have fully-staffed offices on the island.
Before the merging of offshore and onshore regimes, both partnerships and companies could have offshore status, which conferred tax advantages on both employers and employees (see Offshore Tax Regimes). The pure partnership form has not often been chosen due to the open-ended liability of the partners, but a Limited Partnership permits individual partners to share profits 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) are taxed after deduction of expenses at 12.5%. See above under Financial Holding and Investment Activities for comments on the tax treatment of profits repatriated from Cyprus into Western countries.