Cyprus a Recognised Financial Center
Cyprus has evolved as a financial center the last 40 years. The accession of the island to the European Union in 2004 was a milestone in its recognition in the provision of financial services. Building and refinement of specialized banking units for international companies as well as the provision of extended professional legal and accounting services are just few of the attributes that have established Cyprus in its excellence. Not limited to this, Cyprus is a rounded destination with a strategic location in the mediteranean, a favorable tax environment, extensive double tax treaties, robust regulatory environment, transparent judicial system and a very supportive state attitude. No wonder why Cyprus is today one of the most recognised International Financial Centers.
Why Cyprus in Short
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Advantageous tax regime in accordance with EU policies
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A transparent legal system fully aligned with EU
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Well developed infrastructure
(road network, ports, airports, higly educated human resource, schools, clinics/hospitals, low office space rents)
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Strategic location; proximity to Western and Eastern European markets and close to Middle East and Gulf markets
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Stable political, legal and tax environment
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Highly efficient and supportive government bodies and private sector
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Free market economy, full member of the European Union and of the Economic and Monetary Union
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Small yet flexible service economy which adjusts easier to downturns of economic activity
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Transparent business environment
Favorable Tax Environment
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12,5% corporate tax rate, one of the the lowest in the European Union and the lowest in Euro Zone
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Wide network of double tax treaties covering over 50 countries
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No estate duty
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No tax on employees emoluments working abroad
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No tax on sales of shares
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No tax on net profits of shipping companies
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4.25% tax on net profits of ship-management companies
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No tax on profits of international trusts
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No withholding tax on dividends, interests, royalties
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Under some circumstances no capital gains tax.
Transparent Business Environment
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Banking Law and Capital Requirements Directive (Basel II)
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Capital Markets Legislation (MiFid)
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International Collective Investment Schemes Law
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Companies Act based on English Law
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Anti-Money Laundering Legislation
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Land Registry and Property Ownership as in England
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Case Law (English Case Law precedents-common law)
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Cyprus Tax System is in line with the European Union Code of Conduct.
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All the European Union Directives have been adopted.
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Organization for Economic Cooperation and Development’s (OECD) “White List” on implementation of the internationally agreed tax standards
International Businesses
There are many foreign banks from the Middle East, Europe, Africa and Asia that operate as subsidiaries, branches or representative offices in Cyprus. A significant number of multinational companies are also operating in Cyprus. Currently, there are 38 banks and over 1200 International Business Companies (IBCs) with fully-fledged offices in Cyprus.
Many companies manage their EU, North Africa and Middle East operations from Cyprus at a considerably lower cost. A substantial number of companies involved in the trading or distribution of fast moving consumer goods use Cyprus as a trading base in the Region.
Shipping
Cyprus is an internationally renowned shipping center. The merchant fleet of Cyprus is the 3rd largest in the European Union and the 10th largest in the world. The unique geographical position at the juncture of three continents, the advanced infrastructure and services, as well as the very attractive taxation and other advantages makes Cyprus an ideal location for ship owning, ship management and ancillary shipping-related companies. More than 130 ship owning, ship management and shipping related companies maintain offices in and conduct international activities from Cyprus, including some of the world’s largest international ship management companies.
Infrastructure
Major infrastructure and residential development along with modern facilities, reputable schools and excellent medical services all contribute to a very high standard of living in Cyprus. The annual per capital income is about EURO 19,740. The overall cost of living averages about 1/3 to 1/2 of most parts of Europe, Japan and the USA. A recent international poll showed Cyprus towns to have one of the lowest costs of living within a developed nation.Thanks to its modern road network, extensive port facilities and two new international airports, travel and transport in and beyond Cyprus is fast, efficient and economical.
Education/Quality of Workforce
Cyprus is known for its very high standard of education proof of which is the high literacy rate of greater than 98%. Both private and state establishments cover primary, secondary and tertiary education providing quality education and excellent facilities. In addition, in the last 40 years a large percentage of cypriot students are exposed to global education as a considerable percentage of the students tend to pursuit their University education abroad with preference in the universities of Great Britain, the USA and Greece.
As such there is excellent human resource availability in Cyprus for the international companies, covering a vast range of educational background, educated even in the most prominent Universities around the globe as well as very well trained in the subsequent years. It is not an overstatement but a fact that the quality of the local workforce is superb.
Health Care
Medical and health care services in Cyprus are with very high European standards and are provided through several governmental hospitals and private clinics, hospitals and medical consortiums. Such establishements, well equiped with the latest technology, can be found throughout the island and can be accessed unobstacled as their proximity at any point in time is really convenient. In addition, one may select from various health care schemes as many insurance companies in Cyprus offer plans for full or partial cover of health expenses. International private medical insurance schemes are also available for residents non-Cypriots.
Transportation network
Inland transportation is very easy through an excellent network of roads and morways which cover the whole island. Proximity of cities is within short distances with the highest distance amongst them being not more than 2 hours and the shortest arount 30 minutes. Wishing to drive you need to bear in mind that driving is on the left hand side of the road and highest speed on highways is 100 km per hour. Public transportation services with regular connections include comfortable buses, while private taxi services can be found all over by the time one steps on the island.
The two major ports of Cyprus which are located in the cities of Limassol and Larnaca handle approximately two thirds of the total volume of the sea cargo. Warehouses are available for triangular trade and the ports are increasingly used as regional centers of commercial distribution between the west and east, connecting Europe with Middle East and Africa. Both ports furnished with considerable infrastructure facilities work on a nonstop basis to accomodate the island's international imports and exports demand.
The island’s two international airports are situated in Larnaca and Paphos. The closest to the capital is Larnaca International Airport with 50 kms in distance while Paphos Airport is approximately 150 kms from Nicosia and 63 kms from Limassol. The two airports handle over 400 scheduled flights per week served by over 40 international airlines as well as flights operated by 41 charter airlines.
The excellent transportation networks in Cyprus air, sea and land are continuously upgraded, hence they have contributed to the acceleration of the island’s development.
Favorable Office Space Rents
Office rent varies depending on the location, size and configuration. Compared to European standards Cyprus office space cost both in capital values and rental values is considered as very favorable, even cheap. According to some recent statistics the following can be very well met as an indicative rule of tumb:
2014 Capital Values per m2 (€)
Nicosia 2,000 - 3,000
Limassol 2,000 - 5,000
Paphos 1,700 - 2,000
Larnaca 1,800 - 2,000
2014 Rental Values per m2 per Month (€)
Nicosia 8-13
Limassol 8-25
Paphos 5-10
Larnaca 5-10
Yet another alternative is to consider renting an office space in specialized Business Centers.
Telecommunications
Considerable investment has been made into transforming the island into a major telecommunications hub in the region. By building upon its technologically advanced infrastructure, Cyprus has established an extensive telecommunications network, both in terms of cable and satellite, which ranks amongst the best in the world.