Taking into consideration and acknowledging the competition targeting Cyprus from other low tax or no tax jurisdictions, Cyprus continues to provide a complete value proposition for foreign investors as a financial and business centre. Numerous incentives and tax reasons for using a Cyprus company include:
1. Member state of the EU.
2. Modern tax regime acceptable by the EU.
3. One of the lowest corporation tax rates in Europe (12.5%).
4. Dividend income is exempt from corporation tax.
5. Effective tax on royalty income of 2.5%.
6. No capital gains tax on profit from sale of securities*.
7. No withholding tax on payments to non-residents (dividends, interest and royalties).
8. Non-resident entities are only taxed on their Cyprus-sourced income.
9. Profits from overseas permanent establishments are exempt from corporation tax.
10. Wide treaty network and use of EU Directives.
11. Restructuring legislation in line with the EU Merger Directive extending to companies in non-EU countries.
12. New Scheme for granting a Cyprus passport.
13. Added commercial value and monetary benefits due to ability to register for VAT.
14. International business centre with efficient legal, accounting and banking services.
15. Advanced Telecommunications network and infrastructure.