Cyprus: Tax Benefits for Business and Personal Life
7 April, 2025
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Due to unstable political and economic situation worldwide, business is increasingly forced to look for alternative jurisdictions to conveniently build a business. Since the beginning of russian full-scale invasion of Ukraine, the issue of business relocation has become more relevant than ever.
When considering the issue of moving and launching business abroad, many benefits both on personal and business levels should be considered.
Key Advantages of Cyprus
Strategic Location
Cyprus is located in a strategic position in Europe which serves as a convenient point for trade and transportation. There is one of the largest transportation hubs in Europe which serves.
Extensive Double Tax Treaty Network
Cyprus has entered into Double Tax Treaties with over 40 countries (including Austria, Belgium, Bulgaria, Great Britain, Hungary, Germany, Greece, Denmark, Egypt, India, Ireland, Italy, Canada, China, Kuwait, Malta, Mauritius, Norway, Poland, Romania (including all CIS countries except Kazakhstan), Singapore, Slovakia, Syria, USA, France, Czech Republic , Sweden, South Africa, Japan and ex-Yugoslavia countries.
Transparent Legal System
A regulatory framework that is aligned with EU and a legal system comparable with UK common law.
Low Operating Costs
Low costs for office operation – сost for technical and professional support in Cyprus is much lower compared to other EU countries.
Growing Energy Sector
Discovery of oil and gas reserves in Cyprus’s Exclusive Economic Zone is set to enhance energy independence and potentially establish Cyprus as a new energy hub for Europe.
Tax Benefits for Companies
Cypriot residents shall be subject to taxation on all types of income received from any source, both in Cyprus and abroad. All resident commercial companies shall be subject to a single corporate tax rate of 12.5%.
In addition, tax and corporate legislation of Cyprus has the following specifications:
- profits from capital gains resulting from any Cypriot company’s investment in real estate in Cyprus shall be subject to tax at the rate of 20%;
- profits earned by the Cypriot company outside Cyprus through a duly fixed place of business (branch, representative office, etc.) of the Cypriot company shall be fully exempt from taxation in Cyprus if at least 50% of such profits are derived from operating activities, and if tax rate in the profit-making country makes up not less than 12.5%;
- when paying dividends, interests and royalties to Cypriot non-residents, no withholding tax shall be charged.
Legislation of Cyprus provides a special defense tax. This tax shall be charged on dividends and interests received by Cypriot residents (Cypriot non-resident companies shall be exempt from this tax), irrespective of whether received within or outside Cyprus.
Cyprus for personal goals
With two international airports and three main ports Cyprus has established itself as an international transit hub for commercial air transportation and is well connected via sea links to all five continents.
- Quality healthcare with a number of private hospitals.
- A number of private English speaking schools are available providing high levels of education leaving families feeling more at ease when relocating to Cyprus.
- A sense of security amongst its community since Cyprus holds one of the lower crime rates in EU.
Good climate, around 50 beaches with blue flag and a relaxed Mediterranean lifestyle.
Majority of people in Cyprus are fluent in English. Road signs, government documents, etc. can all be found in English, so there is no language barrier.
