President Nicos Anastasiades declared the Government will soon announce new tax breaks for foreign investors coming to Cyprus. The President also announced that the Ministry of Finance in collaboration with key players in the private sector will present a plan that would improve the Cypriot taxation framework. The cooperation between the two parties has the same goal of attracting more foreign investments.
According to the President’s announcement, the new plan will benefit all future foreign investors, but also Cypriot citizens and companies. The announcement was made at the Annual General Meeting of the Employers and Industrialists Federation, at the end of May.
According to the President, one of the main purposes of these tax breaks is to reduce the tax burden on companies already registered in Cyprus. The Government’s goal is to exit from recession this year and in order to accomplish this goal it will reduce the public debt and the tax burden on citizens at the same time. The Government plans to restore Cyprus’ credit rating which would also be a great step towards the completion of the consolidation program and further cooperation with the country’s international lenders. The Government also plans to have a more friendly approach to private investors in Cyprus.
Even with the Government’s new plans of reforming the Cypriot taxation system in order to provide more tax cuts for foreign businessmen, the country already has a well-established legislation for foreign investments. The Cypriot legislation allows both EU and non-EU investors to open companies in the country by providing them equal treatment to national companies.
Recently the Investment Promotion Agency (CIPA) proposed investors to set up foreign leasing companies and cell companies in Cyprus. The Agency also proposed that new amendments with respect to bankruptcy procedures would be brought to the Cypriot Companies Law. The new bankruptcy amendments would follow the United States’ model. Under these new provisions Cypriot companies involved in liquidation procedures would be protected against minor creditors. The Agency also proposed an easier company registration procedure for foreign companies to be set up in Cyprus. The proposals are now under debate with the House of Representatives.
For updates on tax cut proposals for foreign investors you may contact our lawyers in Cyprus.
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