While Cyprus is strategically located at the crossroads of three continents, Europe, Africa and Asia, it is a modern EU member-state, offering an ideal prospect to international businesses that choose to relocate on the island.
There is a wide range of reasons justifying the claim that Cyprus is one of the top headquartering jurisdictions and some of these are wide access to markets, strong economic growth, a pro-business environment, tech-savvy talent, low operating costs, and a number of incentives, including a competitive IP regime and special immigration framework.
Some of the major international technology companies that already have regional and global headquarters in Cyprus are: NCR, a world leader in consumer transaction solutions; Amdocs, a leading multinational software and services provider; Wargaming, a world-renowned video game developer; and Viber, the popular online communications platform. Cyprus, has also managed to become a prime location for the fintech industry, providing a home for some of the world’s biggest forex brokers and online-trading platforms.
New Immigration Framework for Tech companies
The Council of Ministers adopted on 7 October 2020 a new set of incentives relating to the immigration rules in place for technology companies wishing to establish presence in Cyprus.
Each company has the right to employ up to 15 third country nationals as directors and middle management executives, and is further entitled to employ any number of qualified third country nationals, who possess wanted ICT skills.
The maximum number of third-country nationals that may be employed under this New Immigration Framework for Tech companies is based on their annual turnover. Companies with an annual turnover of more than €30mn fall under a special category which allows for relocating up to 200 non-European specialists with a simplified procedure, which could grant working permits within 6 weeks.
The key benefits for companies with regards to third country nationals are the following:
- no restrictions on the maximum duration of stay;
- no requirement for a sealed employment contract from the Department of Labour;
- right to family reunification with the employee’s spouse and minor children;
- a visa entry may be converted to a temporary residence and an employment permit may be issued after arrival in Cyprus.
Attractive and transparent tax regime
Cyprus has numerous tax advantages directed to companies involved in international dealings, some of which are as follows:
- It has one of the lowest corporate tax rates in the EU (12.5%);
- As an EU member state, it provides full access to EU Directives;
- It has a constantly growing Double Tax Treaties network listing currently 65 countries;
- It has an attractive IP regime;
- There is no tax on gains from disposal of titles;
- There is no tax on foreign exchange gains;
- There is availability for notional interest deduction for equity investment into Cypriot companies
- There is no withholding tax on dividend and interest payments abroad
- There is no withholding tax on royalty payments abroad
- There is foreign Tax Relief available
- There are personal tax exemptions for new residents and non-domiciled individuals
- There is no inheritance tax
- Dividend and interest income are exempt for 17 years from the time a person relocates to Cyprus.
Attractive IP Regime
Cyprus is an attractive location for the establishment of an IP holding and development company, offering an efficient tax rate as well as the legal protection afforded by EU Member States and by the signatories of all major IP treaties and protocols.
80% of the qualifying profits earned from qualifying intangible assets will be allowed as a tax-deductible expense, which can result in an effective tax rate of as low as 2.5%.
Sources: Invest Cyprus – Cyprus Mail
