Back to posts
Cyprus: A Favorable Jurisdiction for Company Establishment
SCROLL DOWN
Cyprus is an island country located in the eastern Mediterranean Sea, and it has become a popular jurisdiction for company establishment. The country offers numerous advantages for entrepreneurs, including a favorable tax regime, an efficient legal system, a strategic location, and a stable political and economic environment.
Tax Rates in Cyprus
One of the most significant advantages of establishing a company in Cyprus is the favorable tax regime. Cyprus has one of the lowest corporate tax rates in the European Union, which is set at 12.5%. This rate applies to all profits generated by companies, regardless of their size or industry. The tax system in Cyprus is straightforward and transparent, and there are no hidden taxes or fees.
In addition to the low corporate tax rate, Cyprus also offers other tax incentives to companies, such as a tax exemption on profits generated from the sale of shares, dividends received from other companies, and profits earned by a permanent establishment abroad. The country also has an extensive network of double taxation treaties with more than 60 countries, which can help companies avoid paying taxes twice on the same income.
Another benefit of the tax regime in Cyprus is the absence of withholding taxes on dividends, interest, and royalties paid to non-residents. This makes Cyprus an attractive location for holding companies, as it allows them to receive income from their subsidiaries located in other countries without paying taxes on that income.
Banks for Account Opening
Cyprus has a well-developed banking system with both local and international banks operating in the country. Some of the most popular banks in Cyprus include Bank of Cyprus, Hellenic Bank, Alpha Bank, and Eurobank. These banks offer a range of banking services, including corporate banking, trade finance, and foreign exchange transactions.
To open a corporate bank account in Cyprus, companies must provide the necessary documentation, such as company registration documents, proof of identity of company directors and shareholders, and evidence of the company's business activities. The banks may also require information on the source of funds and the nature of the business transactions.
License Obtaining
Cyprus is an attractive location for companies looking to obtain licenses for various industries. The country has a favorable regulatory environment and a straightforward licensing process.
Some of the most popular licenses that companies can obtain in Cyprus include:
To obtain a license in Cyprus, companies must meet the relevant regulatory requirements and submit the necessary documentation to the relevant regulatory authority. The process can take several months, and it is recommended that companies seek professional advice to ensure compliance with local regulations.
Other Advantages of Cyprus as a Jurisdiction for Company Establishment
Apart from the favorable tax regime, there are many other advantages to establishing a company in Cyprus. The country has a highly educated and skilled workforce, and the cost of labor is relatively low compared to other European countries. The legal system in Cyprus is based on English common law, which is familiar to many entrepreneurs and provides a stable and predictable legal environment.
Cyprus is also strategically located at the crossroads of Europe, Asia, and Africa, which makes it an ideal location for companies engaged in international trade. The country has a modern infrastructure, including two international airports, an extensive port network, and a well-developed road network.
Furthermore, Cyprus has a stable political and economic environment, with a government that is committed to promoting foreign investment and business development. The country has a high standard of living, and it offers a safe and secure environment for both residents and visitors.
In conclusion, Cyprus is a highly attractive jurisdiction for company establishment. The country offers a favorable tax regime, an efficient legal system, a strategic location, and a stable political and economic environment. These factors, combined with a highly educated and skilled workforce and a modern infrastructure, make Cyprus an ideal location for entrepreneurs looking to establish a company in the European Union.
