Cyprus
Company Formation

Cyprus offers a number of advantages for international companies looking to establish a presence in Europe or expand their operations globally. An International company is a Cypriot company by its jurisdiction of registration that does not plan to work with Cyprus.

• Favorable tax regime: Cyprus offers one of the most attractive tax regimes in the European Union (EU). Additionally, Cyprus has a wide network of double taxation treaties with over 60 countries, making it an ideal location for companies with international operations.
• Strategic location: Cyprus is strategically located at the crossroads of Europe, Asia, and Africa. It is an ideal location for companies that want to expand into these regions or do business with companies in these regions.
• Business-friendly environment: Cyprus has a business-friendly environment with a well-developed legal system, a skilled workforce, and a modern infrastructure. It is also a member of the EU, which provides companies with access to the EU market.
• Easy company formation: The process of registering a company in Cyprus is straightforward and can be completed quickly. The Cyprus Registrar of Companies has an online registration system that allows companies to be formed in as little as one day.
• Low operating costs: Cyprus offers a low-cost environment for businesses, with low rental costs, affordable labor, and competitive prices for goods and services.
• Attractive lifestyle: Cyprus is a popular tourist destination with a mild Mediterranean climate, beautiful beaches, and a high standard of living. This makes it an attractive location for companies that want to attract and retain top talent.

Cyprus has a favorable tax regime that makes it an attractive location for businesses. The main features of the Cyprus tax system are:

• Corporate tax: The corporate tax rate in Cyprus is 12.5%, which is one of the lowest in the European Union. This low tax rate applies to both resident and non-resident companies. Additionally, Cyprus has a wide network of double taxation treaties with over 60 countries, which can help to reduce the overall tax burden for companies with international operations.
• Personal income tax: The personal income tax rates in Cyprus are also relatively low compared to other EU countries. The highest tax rate is currently 35%, but this only applies to income over €60,000 per year. The tax rate for income up to €19,500 is just 20%, and for income between €19,501 and €60,000, it is 30%.
• Capital gains tax: Capital gains tax in Cyprus is generally 20%, but there are exemptions for certain types of assets, such as shares, bonds, and securities.
• Dividend tax: Dividends paid by a Cyprus resident company are subject to a 17% withholding tax, but there are exemptions for certain types of shareholders, such as resident in an EU country.
• Value Added Tax (VAT): The standard VAT rate in Cyprus is 19%, but there are reduced rates of 9% and 5% for certain goods and services. Certain goods and services are exempt from VAT, such as medical and educational services.
• Intellectual property (IP) tax: Cyprus has introduced a "Nexus IP Box" regime that provides a reduced tax rate of 2.5% on income derived from qualifying IP assets.

Overall, the Cyprus tax regime is designed to be business-friendly, with low tax rates, a wide network of double taxation treaties, and incentives for certain types of investments.

If an international company is conducting business in Cyprus, it may be required to apply for a VAT number in Cyprus. The VAT registration threshold for the companies operating in Cyprus is currently €15,600 of taxable turnover in a calendar year. If the international company's turnover exceeds this threshold, it is required to register for VAT in Cyprus.

If an international company is not operating in Cyprus, meaning it does not have a physical presence or carry out business activities in Cyprus, it is not required to register for VAT there.