CYPRUS REMAINS AN ATTRACTIVE INTERNATIONAL BUSINESS CENTER
The recent Eurogroup decision on the Cyprus bail-out is an unexpected direct attack on the Cyprus banking sector which bears no justification and does not comply with the idealistic notions of European solidarity.
Nevertheless, despite the damage inflicted on its banking system, Cyprus still continuous to be an attractive international business center for international operations and cross border investments, ideal for international trading, services, financing, holding and IP companies, as a result of the following tax and other incentives offered:
– Member state of the European Union with stable and reliable commercial and legal infrastructure, based on common law with excellent professional and financial services offered at reasonable costs.
– Transparent tax regime with one of the lowest corporation tax rates in Europe at 12,5%.
– No capital gains on profit from sale of securities without any conditions covering a broad range of investment instruments whether the securities are held either as participation or as investment and trading. It is the only European jurisdiction that offers this.
– Effective tax on royalty income is at 2,5% on net profits (as an 80% exemption of profit applies from the exploitation and disposal of Intellectual Property rights).
– Dividend income is exempt from corporate tax without minimum holding period or minimum participation like in the other European competitive jurisdictions.
– No withholding tax on payments to non-residents on dividends, interest and royalties, offering the potential for a tax – free exit from investments in Europe, Russia, Ukraine and India.
– Wide treaty network Cyprus has the best double tax treaties with Russia, Ukraine, Poland and a very good agreement with India.
– Use of the European Directives. Dividend flows from European companies are with zero taxation.
– There are strong bonds between Cyprus, Russia and Ukraine. Cyprus positively considers the Russian investors and business community who are welcome in the island, offering substantial tax incentives also as a result of the double tax treaties for holding and financing structures as well as for the companies trading in securities.
– Cyprus also offers the potential for a tax free exit from investments in India and Poland since under the double tax treaties any capital gains on disposal of shares is taxable only in the country of residence of the disponor of the shares.
– Attractive regime for shipping and ship management activities.
– The Cyprus International Trust offers one of the most modern and completed legislations for a secure and effective “wrapper” for international investments, offering unrivalled flexibility, controland asset protection.
– The recent banking crisis has affected the two major banks only but it has not affected the Cyprus regime. Cyprus companies can use banks abroad or the other secured banks in Cyprus. Cyprus banks are experienced and highly efficient in commercial banking transactions which is not the case in Europe where the banks approach commercial banking especially from East European business world with mistrust, to say the least, or they impose high minimum entry conditions. Many of our clients for whom we opened accounts abroad are telling us that the Cyprus commercial banking system and expertise does not have an alternative at the moment.
We believe that despite the recent banking crisis, the advantages and opportunities offered by Cyprus remain unchanged and Cyprus remains an attractive European International financial and business center, offering tax and other benefits as well as high quality of professional services at reasonable costs.