In a globalized economy where business corporations are pressed to cut costs while increasing quality, Cyprus is the solution. The combination of tax beneficial provisions coupled with the relatively lower costs of high-level professional services that can be offered; render Cyprus as an attractive investment destination for investors originating from around the world.


  • EU and Eurozone Member State.
  • Strategic geographical location. Cyprus is the closest Eurozone country to the important economic regions of the Middle East, Asia and Africa.
  • Simplified, effective and transparent tax regime. Cyprus has the most competitive tax regime within EU with double tax treaties with over 50 countries.
  • Highly educated and qualified workforce.
  • Top quality services including legal, tax, accounting, audit, business administration and investment.
  • Low set up and operating costs.
  • Modern and advanced legal system in compliance with EU law.
  • Attractive operating environment with advanced transport and telecommunications infrastructure, high- speed internet, two international airports and sea ports.
  • Full compliance with EU tax directives and EU Code of Conduct for Business Taxation.
  • Implementation of internationally agreed tax standards – part of OECD’s ‘‘white list’’.
  • Having entered a successful Economic Adjusment Program only recently , Cyprus shows improvement on its economic indicators marking the recovery of the economy


  • 12.5% flat corporate tax rate.
  • Foreign sourced dividends are exempt from tax under easily met conditions.
  • Disposals of shares and other qualifying titles are generally exempt from tax.
  • Generally no withholding taxes on payments from Cyprus.
  • Profits of foreign permanent establishments (PE) are exempt from taxation in Cyprus under easily met conditions.
  • IP tax regime with an effective tax rate of 2.5%.
  • Unilateral credit relief for foreign taxes.
  • No CFC legislation.
  • No thin capitalisation rules.
  • No detailed transfer pricing rules (arm’s length principle only).
  • No capital gains tax (except on real estate situated in Cyprus).
  • No taxes on entry, reorganisations and exits.
  • Low personal tax regime with 35% top rate.
  • Generous tax deductibility rules that reduce the effective tax rates.
  • Stable and straight forward tax legislation.



Cyprus main features for Holding Companies
1) One of the lowest corporate tax rate in the EU at 12,5%
2) Capital gains are exempt from taxation
3) No withholding tax on dividend and interest outbound payments
4) Foreign permanent establishment profits are tax exempt
5) Access to an extensive network of DTT.
6) Double tax relief by means of credit is unilaterally awarded
7) A competitive IP regime
8) Any gains from trading in a wide range of securities is tax exempt
9) Generous participation exemption regime
10) Full access to EU tax directives


Cyprus main features for Financing Companies
1) Interest income, as trading profit, is taxed at 12,5%
2) Financing costs are deductible from financing income

Margin availability for back to back loan transactions as follows:

  • Up to €50.000.000 0,35%
  • From €50.000.000 to €200.000.000 0,25%
  • Over €200.000.000 0,125%
4) Gains from disposal of securities is exempted as such it is a favorable framework for debt restructurings
5) No withholding taxes on interest payments
6) Favorable withholding tax from payments abroad as specified in the wide range of DTT provisions
7) Full access to EU interest and royalties directives


Cyprus main features for Trading Companies
1) One of the lowest corporate tax rate in the EU at 12,5%
2) Generous tax deductibility rules that reduce the effective tax rates
3) Loss carry forward availability limited to 5 years
4) Foreign permanent establishment trading profits are tax exempt
5) Losses of foreign permanent establishment available for relief subject to recapture
6) Group relief provision available
7) Interest expense on 100% acquisitions is


Cyprus main features for IP Holding Companies
1) Notional deduction from qualifying royalty income of 80% which reduce tax rate to aprox. 2,5%
2) 5 year amortisation of IP acquisition cost reducing further the effective tax rate
3) No withholding taxes on royalty payments if the IP is not used in Cyprus
4) Favorable withholding tax from payments abroad as specified in the wide range of DTT provisions
5) Full access to EU interest and royalties directives

"A combination of tax and non-tax incentives helped Cyprus to be established as an International Business Centre.
Your first option is to relocate your business in Cyprus and use Cyprus for your operations either in Europe or Worldwide. The second general option is to include a Cyprus Company in your structure to get advantage of the tax incentives and its wide network of DDT.
Below, we present the main features of Cyprus Companies with different activities. We will be happy to provide you with our comprehensive advice on tax planning solutions, on request, once we have information about your existing structure, your activities and your needs."