Tax and Business Incentives for Investments in Cyprus
- Written by: Bridgewest
- Posted: 2016-09-08
Investors searching for a new business market to set up a company are advised to invest in Cyprus, because the local authorities offer many tax and business incentives, which can help a new business grow in a faster pace. One of the top industries in Cyprus refers to tourism, which had very good economic results in 2015 and throughout 2016. Our team of Cypriot lawyers can offer assistance on the incorporation procedure, which is performed following the same regulations, regardless the business field in which the company will carry its activities.
Tax incentives for businesses in Cyprus
An important aspect when setting up a new company abroad is the taxation level applicable to the respective business. The most important tax in this sense is the corporate tax, which is applicable in Cyprus at the rate of 12,5%, being one of the smallest corporate taxes imposed in the European Union (EU).
Another way through which foreign investors can benefit from smaller taxes is if they are tax residents of a country with which Cyprus has signed an agreement for the avoidance of double taxation.
Moreover, the local government provides many tax exemptions for the following incomes:
• international transactions;
• financial gains obtained from permanent establishments;
• profits obtained for the sale of securities.
Another important tax exemption refers to the withholding tax, which is granted for the following:
When forming a new business in Cyprus with activities in the construction sector, the investors will receive an exemption from paying the capital gains tax on the sale of properties (usually applicable at the rate of 20%) to further develop this field; our team of Cypriot attorneys can offer legal assistance on how to obtain a business permit in this field.
Business incentives in Cyprus
The Cypriot authorities provide an industrial free zone, where businessmen can benefit from custom duty exemptions and other financial or logistics facilities. Businesses can also be sustained through various funds and grants, which are available especially in the field of energy, environment or industrial development.
Entrepreneurs interested in opening a company in Cyprus can address to our Cypriot law firm for more details.