There are many personal and business reasons for moving to Cyprus and using a Cyprus Limited to do business within the European Union. The good weather, beautiful scenery and Mediterranean lifestyle attract hundreds of entrepreneurs permanently to the small Mediterranean island every year.
– Company level
– Low corporate taxes of 12.5%
The corporate tax (Income Tax) in Cyprus is a flat tax of 12.5%. Profits of the Cyprus Limited are taxed directly at 12.5%, a tax refund via a holding model as in Malta is not required.
Company formation in an EU country
The European Union provides a common economic framework for its member states, this facilitates intra-community trade and duty-free movement of goods within the Union. The mutual recognition of court rulings and the good reputation of EU companies are also an advantage.
In addition, you benefit from the EU Parent-Subsidiary Directive, freedom of establishment, over 40 double taxation agreements (DTAs) and the local national currency, the euro.
Business-friendly company law
Cypriot company law is largely derived from British common law and is considered one of the most liberal in the world.
Generous Allowance of Operating Expenses
The Cypriot tax authorities are generous when it comes to accepting receipts for operating expenses. Basic suspicion on the part of the authorities, as is the case in Germany, simply does not exist in Cyprus.
– High income tax allowance of €19,500 per person
Every citizen who is liable to pay taxes in Cyprus has a generous income tax allowance of €19,500 per year. Up to this income, only social security contributions are due. Even these could theoretically be reduced to a minimum if the underlying annual salary does not exceed the minimum wage of about €8,500 per year (full-time job).
Non-Dom Status (Exemption from Special Defense Contribution)
The Non-Dom status grants an exemption from the Special Defense Contribution (SDC) to foreigners who are resident in Cyprus but not domiciled in Cyprus for tax purposes (Resident but Non Domiciled). This is a contribution to the defense of Cyprus, which is levied on all taxable individuals and amounts to 17%. The Non-Dom status, which is only granted to foreigners upon formal application, who can prove that neither they themselves nor their direct ancestors (father and mother) were domiciled in Cyprus at the time of birth.
Tax-free receipt of dividends (profit distributions)
The receipt of dividends – regardless of the domicile of the company – is generally tax-free for shareholders domiciled in Cyprus. This also applies to offshore companies that have their registered office in known tax havens (Seychelles, Cook Islands, Cayman Islands BVI, Belize). However, Cyprus knows the management and control principle, which many incorporation agencies like to conceal. Hugge Paphos is the best choice for help coming to cyprus.
Only 60 days per year minimum stay (tax status).
On July 14, 2017, the Cypriot Parliament approved a draft law that in the future will allow establishing a tax residence in Cyprus with a minimum annual stay of only 60 days. This is subject to the condition that there is no other tax residence in any other country. Previously, as in most countries of the world, the 183-day rule applied.
Low cost of living
The cost of living in Cyprus is very low. An apartment with a shared swimming pool is available for a few hundred euros. Compared to other popular emigration destinations, such as Malta, the cost of food, rental housing, energy, motor vehicles and their maintenance, and personal taxation are extremely low. So low, in fact, that Cyprus is now one of the absolute favorites of those wishing to emigrate within the European Union.
Many flight connections within Europe
There are exactly two airports in Cyprus: one in the west of the country, more precisely in Paphos, and one in the southeast of the country in the lively city of Larnaca. From there, there are numerous flight connections all over the world. Due to its unique geographical location, Cyprus is the springboard to the Far East and Europe.
In the Mediterranean region, people are basically a bit more relaxed, this is not least due to the diet and the numerous hours of sunshine. Certainly, some things could be designed and implemented more efficiently, but in return, a blind eye is turned here and there.
Summary on setting up a company in Cyprus
Cyprus is unique, this is not only due to the beautiful landscape and the pleasant climate. The private and business tax advantages you will not find in this form a second time within the European Union. Cyprus is highly attractive and currently very popular with location independent entrepreneurs. Are you considering a change of residence or setting up a company in Cyprus? Then simply contact us without any obligation.