The fast-moving consumer goods (FMCG) represent goods which are sold rapidly and at a quite low price. Even though the profits gained from FMCG goods are relatively low, they are commonly sold in large quantities. Therefore, the total profits on this type of products can be high. The FMCG business is a classic case of low margin and high volume type of enterprise. In this article, our lawyers in Cyprus present a few important aspects related to opening a Cypriot FMCG company.
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A brief overview of the FMCG sector in Cyprus
Cyprus has become an island which offers considerable advantages, such as a favorable geographical location, a wide network of tax treaties and a quite complex European business environment.
Therefore, numerous companies involved in the FMCG sector utilize the country as a trading point for the Mediterranean, North African and Middle East areas. Our Cypriot lawyers can provide assistance in starting a business in Cyprus in the FMCG sector.
Non-resident businesses can maintain, store, break bulk or re-package their own transit products in warehouses in Cyprus, if the handling does not involve any changes in the customs tariff classification.
From the taxation point of view, the Cyprus treaty withholding tax rates are usually lower than those of other jurisdictions’ treaties. Besides, there is no local taxation as long as there is not a permanent establishment of the business in the country, and even if it is, the tax rate on the company profits in Cyprus is a low one – only 10%. Our Cypriot lawyers can offer more details on the taxation regime in the island.
Characteristics of the FMCG sector in Cyprus
Cyprus offers some of the following advantages and characteristics for an FMCG business:
- Cyprus is mainly characterized by small and medium sized businesses. Thus, the supply chain presents more orders of smaller values which adds to the logistics costs;
- It is an island, therefore, the sea carrier services are always utilized, which increases the transit times;
- It is a top tourist destination for more than two million tourists, which creates FMCG demands increasing three times in monthly comparisons in certain regions;
- More characteristics: our attorneys in Cyprus can provide further details on this matter.
If you would like to know more about the FMCG sector in Cyprus, please get in touch with our law firm in Cyprus.