Entrepreneurs who want to launch their companies near the eastern Mediterranean Sea should consider forming a company in Cyprus. With a corporate income tax rate of 12.5%, Cyprus’ corporate tax rates are among the lowest in Europe.
In order to assist business owners in avoiding double taxes, Cyprus has also negotiated more than 55
double taxation treaties which is one of the reasons to setup a company in Cyprus.
As a member of the European Union, Cyprus enjoys all the advantages of the EU’s rules and agreements, especially the freedom of capital movement within and across EU areas. Additionally, with its educated workforce, an abundance of investment options, and one of the lowest crime rates globally, Cyprus is a great place to incorporate a business.
These are just a few of the reasons to setup a company in Cyprus, however, there are more, which will be covered in the article that follows.
Different reasons to setup a company in Cyprus
There are numerous reasons to setup a company in Cyprus, including a tax-friendly country, an important shipping industry, and an excellent position for overseas trade.
Here are the different reasons to setup a company in Cyprus:
1. Tax-friendly country
- Cyprus’s business-friendly tax structure, which grants domestically based businesses numerous benefits, is one of the reasons to setup a company in Cyprus.
- Cyprus, with a tax rate of 12.5%, has one of the lowest rates of company taxes in Europe.
- Also, there isn’t any capital gain tax imposed by the governmental authority. In comparison to other European nations, Cyprus’s tax legislation offers numerous tax advantages in addition to its reduced corporation tax rate of 12.5%.
- Interest, dividends, and earnings from the sale of stocks, securities, debentures, and other assets are all exempt from taxation. Except when it comes to capital gains relating to immovable properties in Cyprus, business reorganizations such as partitions, asset transfers, and stock transfers are tax-free.
- The fact that Cyprus’s government has ratified more than 55 Double Taxation Agreements demonstrates the country’s status as a well-known tax haven.
2. An advantageous location for foreign trade
- Due to the geographic location of Cyprus at the intersection of Europe, Asia, and Africa, it frequently promotes itself as a gateway for foreign trade as well as a connection between the Eastern and Western worlds.
- Due to its direct connectivity to such areas, this enables enterprises to reach those markets easily.
- Being a member of the WTO, GATT, and EU as well as the advantageous trade treaties enable companies to export to these nations without encountering any trade restrictions or impediments.
- Cyprus’ participation in Europe also allows it to serve as a gateway into the greater European single market. This is another one of the reasons to setup a company in Cyprus.
3. Effective Workforce
- Another one of the reasons to setup a company in Cyprus is the accessibility of skilled, reasonably priced, and competent workers.
- With over 13 lakh people, Cyprus provides business owners with a productive workforce. People who speak English account for about 70% of the populace in Cyprus.
- Greater than half of Cyprus’s population are also college graduates. This indicates that Cyprus has a competent and qualified workforce that may be beneficial for an entrepreneur who opens a business in the nation.
4. Shipping industry
- The shipping industries, which is one of the most crucial industries in the country, are another one of the reasons to setup a company in Cyprus.
- The shipping industry gets a substantial amount of foreign direct investment and contributes approximately 7% of the country’s GDP.
- With the third biggest commercial fleet in Europe and the biggest ship management hub in the European Union, it is obvious that the nation supports a sizable number of international and regional maritime operations.
- Cyprus has ratified 25 bilateral cooperation accords and also has significant global maritime treaties, enabling ships flying the Cyprus flag to sail without difficulty in a number of different foreign countries.
5. Favorable business environment
- Another one of the reasons to setup a company in Cyprus is the favorable business environment of the country.
- Cyprus has established itself as among the wealthiest nations in the Mediterranean region with regard to GDP per capita due to sustained economic growth, stability, and strong employment rates.
- In the World Bank’s ‘Doing Business’ index, Cyprus has been placed in the 54th position worldwide for its ease of doing business, indicating a business’s reasonable ease of registration and operation in the country.
- In accordance with the 2022 Corruption Perceptions Index published by Transparency International, Cyprus is the 51st least corrupted region out of 180 jurisdictions.
- All commercial sectors in Cyprus are open to foreign investment without any limitations or rigorous licencing procedures, with the exception of a few regulated industries, like banking and finance.
Conclusion
According to the most recent index measuring how easy it is to do business, Cyprus is in the 54th position. This is due to Cyprus’s simple business regulations and management system. Also, in Cyprus, there aren’t any restrictions placed on foreign entrepreneurs who wish to register a firm there. From providing numerous tax advantages to having an educated workforce, Cyprus offers entrepreneurs numerous reasons to set up a company.
Entrepreneurs who are considering incorporating their business or who have any questions regarding the reasons to set up a company in Cyprus can contact our business formation experts at Odint Consulting. Our experts will be glad to assist you with every required information.
FAQ’s
Cyprus has a favourable tax environment, a strong and stable economy, an excellent position for overseas trade and a skilled workforce.
- Cyprus, with a tax rate of 12.5%, has one of the lowest rates of company taxes in Europe.
- Interest, dividends, and earnings from the sale of stocks, securities, debentures, and other assets are all exempt from taxation.
- In order to assist business owners in avoiding double taxes, Cyprus has also negotiated more than 55 double taxation treaties.
It is easy to set up a company in Cyprus, as a limited liability company can be incorporated with a minimum of 1 stockholder and 1 director, who can be from any country.
Yes, a Cyprus LLC may be held entirely by foreigners. In addition to that, in Cyprus, there aren’t any restrictions or special licensing criteria imposed on foreign entrepreneurs who wish to register a firm there
