Business in Cyprus
Cyprus enjoys a privileged location at the edge of Europe and Asia, on crossroads of international shipping routes and with favourable tax rates for business. If you’re planning to start a business in Cyprus, here are the key facts:
Company Set Up Procedures
The process of company incorporation has been simplified in the recent years to reflect importance of Cyprus as an international base for companies.
Following entities can be set up:
- Private or Public Companies
- Business / Trade Name (self-employed)
- European Company
- Branches of international companies
Companies in Cyprus enjoy a very attractive 12% tax on profits, one of the lowest in the European Union.
Value Added Tax (VAT)
Every natural or legal entity in Cyprus is requited by law to register for VAT payments.
The duty arises if the annual turnover on taxable goods has exceeded 15.600 EUR at any given moment, or if there is reasonable ground to believe that it will exceed this amount. The registration takes few days and certificate is usually given within 5 – 10 days.
Company Tax Advantages
Cyprus offers a wide range of tax advantages for companies:
- Lowest corporate tax rate in Europe at 12%
- Zero tax on dividents or interests payments for non-residents
- Double taxation treaties with over 40 different countries
- Favourable tax treatment of company losses
- Zero tax on profits from reorganisation
Double Taxation Treaties
Personal Income Tax
All persons who are tax residents for tax purposes are subject to personal income tax. The tax applies both to income in Cyprus and abroad. Persons who are not residents in Cyprus are only subject to tax on income from Cyprus.
Tax Free Income for each year is 19.500 EUR. Following tax rates apply:
- 0 to 19.500 EUR – 0% tax
- 19.501 EUR to 28.000 EUR – 20% tax
- 28.001 EUR to 36.300 EUR – 25% tax
- 36.301 EUR to 60.000 EUR – 30% tax
- 60.001 EUR and above – 35%