The taxation scheme on corporate tax for Cypriot companies, provides the lowest tax rate (12.5%) in the European Union. Cyprus being a member of the EU, provides access to EU directives and EU VAT registration.
Tax System
Its main features are:
- One of the lowest corporate income tax rates in the EU at 12.5%
- Dividend participation exemption
- Exemption on disposal of “securities” (e.g. shares, bonds, debentures)
- No succession taxes
- No withholding taxes
- Attractive IP regime
- Tonnage tax for shipping companies
- Notional interest deduction
- Personal tax exemptions for new residents and non-domiciles
- Incentives for investment into start-ups
- Formation of companies in Cyprus
- Corporate management and administration
- Domiciliation services
- Corporate reorganization and restructuring
- Shareholder agreements and corporate governance issues
Frequently Asked Questions
Why is Cyprus considered an attractive jurisdiction for companies?
Cyprus offers one of the lowest corporate income tax rates in the European Union at 12.5%, combined with EU membership, access to EU directives, and a stable legal and regulatory environment, making it an attractive location for international business.
What tax advantages are available to Cypriot companies?
Key tax advantages include dividend participation exemption, exemption on the disposal of securities, no withholding taxes on dividends, interest, or royalties, and no succession taxes. Cyprus also offers incentives such as an attractive IP regime and notional interest deduction.
Does Cyprus allow access to EU VAT and EU directives?
Yes. As an EU Member State, Cyprus provides access to EU VAT registration and the benefits of EU directives, facilitating cross-border trade and corporate structuring within the European Union.
What corporate services are offered under Corporate & Commercial law?
Corporate & Commercial services include company formation, corporate management and administration, domiciliation services, corporate restructuring and reorganization, as well as advice on shareholder agreements and corporate governance.
Can you assist with the formation of a company in Cyprus?
Yes. Legal assistance covers the full company formation process, including structuring, preparation of constitutional documents, registrations, and initial compliance requirements.
What is corporate governance and why is it important?
Corporate governance refers to the rules and practices that govern how a company is managed and controlled. Proper governance helps ensure compliance, transparency, and protection of shareholders’ interests, especially in cross-border or multi-shareholder structures.
Are there incentives for startups and new residents in Cyprus?
Yes. Cyprus offers tax incentives for startups, as well as personal tax exemptions for new residents and non-domiciled individuals, making it attractive for entrepreneurs and international executives relocating to Cyprus.
Do you provide ongoing corporate management and administration support?
Yes. Ongoing support includes corporate administration, compliance assistance, and domiciliation services, helping companies meet their legal obligations and operate efficiently in Cyprus.
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