Benefits of Cyprus Company Incorporation 

If you are looking at jurisdictions for quick and convenient business registration, it is necessary to pay attention to the Republic of Cyprus. This country has a favorable geographical location with access to markets in Europe, Asia and Africa. Cyprus is popular among entrepreneurs due to its attractive tax policy, simplicity of the company registration process and favorable conditions for investment. Incorporating a company in Cyprus is an ideal option for entrepreneurs who seek international recognition and favorable business conditions. By registering a company in Cyprus, you can reduce costs without compromising on quality. About a thousand new companies are opened here every month. The main factor of success lies in the favorable tax regime, specially oriented to business. In addition to registering a new business, an existing business from another country can be redomiciled in Cyprus. 
 
It is also notable that Cyprus has abolished the annual company tax. The annual company tax was introduced in Cyprus during the financial crisis of 2013. Thanks to this levy, every year the state received about 40-45 million euros in the form of company tax. 

On February 29, 2024, the Parliament of Cyprus held a meeting, as a result of which it was decided to completely abolish the annual levy for companies. All companies registered in Cyprus were obliged to pay a fee of 350 euros to the state budget no later than June 30 of each year, regardless of whether they have any activities, assets or not. 

We have highlighted some of the main advantages of this country for registering and doing business. 

Cyprus is known for its attractive tax system, which provides a number of advantages for businesses and investors. 

Management and control: If a company is incorporated in Cyprus and its management and control is exercised from Cyprus, it will be taxed both on income derived in Cyprus and on income derived abroad.  

Low corporate tax: Cyprus companies are subject to a corporate tax rate of only 12.5%, one of the lowest in Europe. This makes Cyprus an attractive destination for businesses looking to reduce their tax liabilities. 
 
For companies not resident in Cyprus, taxes are levied only on income earned in Cyprus. 

Tax rates: 

• Corporate tax (corporate income tax) is 12.5%. 

• Value Added Tax (VAT) is 19% (9% for some goods and services). 

• Dividend tax is not levied on legal entities. 

Double tax treaties: Cyprus has concluded double tax treaties with more than 60 countries. These treaties allow citizens of other countries to take advantage of the low tax rates applicable in Cyprus and prevent double taxation. 

Simplified registration procedure: Registering a company in Cyprus is relatively simple and quick. No minimum authorized capital is required. 

There is no need for you to be on the island during the company registration process, it is possible to register a company in Cyprus remotely. 

In addition, most businesses operating in Cyprus use English as their working language. Thus, you will have no language barriers.  

Favorable business climate: Cyprus has a well-developed infrastructure, a stable legal system and access to international markets.  

Geographical location: Cyprus is located at the crossroads of Europe, Asia and Africa, making it strategically important for businesses looking to expand into different markets. 

Privacy and anonymity: The laws of Cyprus provide a high level of confidentiality for the beneficial owners of companies. 

Management flexibility: A Cyprus company can be managed from abroad and does not require a director or shareholder to be present in Cyprus.  

Financial support for startups and innovative companies: Cyprus provides various financial support programs, including subsidies, soft loans and tax incentives. 

Relocation of employees to Cyprus: foreigners are entitled to establish an international company in Cyprus which may employ non-EU nationals in Cyprus. Such a company may obtain work permits for the relevant employees and residence permits for them and their family members. 
 
To summarize, the country is not included in the OECD (Organization for Economic Cooperation and Development) blacklist, so your company will operate legally in a jurisdiction with a high reputation. Besides, it is convenient not only to work but also to live in Cyprus. English spoken language is used in all spheres, there is a large international diaspora, foreign schools for children, modern real estate of various classes for any budget. As mentioned earlier, the island has the most lenient tax rules in Europe. Resident companies pay corporate tax – 12.5%. And the tax is paid on profits regardless of the source and origin of its formation. Cyprus is famous for its desire to create special conditions for certain types of business. For example, Cyprus attracts IT specialists also due to the special IP BOX regime, which allows, under certain conditions, to reduce the effective income tax rate to 2.5%.