-Cyprus is strategically located at the crossroads of three continents namely Europe, Asia and Afria.
-Our sunny island became attractive as a holding company location to foreign investors especially after Cyprus became a member of the EU and joined the Euro
-As from 1 January 2013 there is no distinction between local Companies and International Business Companies (IBC). Net profits of IBC and International branches managed and controlled from Cyprus are taxed at 12.5% one of the lowest rates in the EU
-Dividend income is exempt from tax provided that at least 1% holding is maintained in the company paying the dividend. This exemption will not apply if more than 50% of the paying company’s activities result directly or indirectly in investment income and the foreign tax burden is substantially lower than that in Cyprus
-Profit from the sale of securities is exempt from Cyprus Tax irrespective of whether this profit forms part of a company’s trading activity or is of a capital nature
-Profit from the sale of bonds and debentures are tax free
-International business branches and international business partnerships which are managed and controlled from abroad are totally exempt from corporation or income tax
-80% of the profits from the sale of patents and trademarks are exempt.
-Net royalty income from Intellectual Property (IP) is exempt to the tune of 80%
-Profit margin on back to back group financing loans can be as little as 0.125%
-No withholding tax on dividends paid to non-resident shareholders and on payments of interest and royalties outside Cyprus, irrespective of the existence of a double tax treaty
-Business partnerships are totally exempt from taxation
-Profits earned from a permanent establishment abroad are fully exempt from Taxation
-Tax planning by utilizing the abundance of double tax treaties with Cyprus. Most treaties provide for reduced or nil rates of withholding tax on dividends, interest and royalties paid out of the treaty country and the avoidance of double taxation in the case where a resident in one of the treaty countries derives income from the other treaty country
-No Capital Gains Tax on disposal of real estate or other assets situated outside Cyprus
-No capital gains tax or income tax on the liquidation of the IBC or of participations held
-Cyprus VAT is not applicable on activities outside the European Union. Depending on the IBC’s activities VAT suffered may be recovered
-Tax losses can be carried forward for up to five years
-Tax losses can be utilized for Group relief