Tax Planning Opportunities

Why Use Cyprus?

Strategic Location: Europe’s Middle Eastern Outpost

Cyprus’s strategic location at the crossroads of three continents has been a major factor in shaping its history throughout the centuries and its development into not only a major eastern Mediterranean trading post but also a reputable international business and services centre.

European Union Member State

Accession to the EU was a natural choice for Cyprus, dictated by its culture, civilization, history, its European outlook and adherence to the ideals of democracy. Since its accession to the EU on 1st of May 2004, Cyprus has undergone through significant economic and structural reforms that have transformed its economic landscape.

Lowest EU corporate tax rate

The Cyprus tax policy positions Cyprus as an ideal jurisdiction for Holding Companies. In summary, a Cyprus Holding Company offers the following tax advantages:

• lowest corporate tax rate in the European Union at 10%

• one of the lowest top statutory personal income tax rate at 30%

• extensive double tax treaties network with over 40 countries, enabling lower withholding tax rates on dividend or other income received from the subsidiaries abroad

• no withholding tax on dividend income received from subsidiary companies abroad under certain conditions

• no withholding tax on dividends received from EU subsidiaries

• no withholding tax on capital gains and income on the disposal of neither the shares of the subsidiary’s share capital nor the shares of the Cyprus holding company

• no tax on capital gains or income on the liquidation of the Cyprus holding company

• no withholding tax on distribution of profits

• outward dividends by the Cyprus Holding Company to its non-resident shareholders are exempt from any withholding taxes

• profits earned from a permanent establishment abroad are fully exempt from Cypriot tax, subject to certain conditions

• a diversified group of Cyprus companies belonging to a Cyprus holding company can set off Group relief for the utilisation of tax losses

• no minimum holding period

Macroeconomic Stability

High growth rate Cyprus’s real GDP growth rate is well above the average growth rate of EU 25, EU15 as well as that of Eurozone.

Efficient legal, accounting and banking services

Advanced telecommunications network and infrastructure

FDI track record

Cyprus is one of the most attractive locations for foreign investments, ranking among the front-runners of the world indicating both high FDI performance.