For many years, Cyprus has been a popular choice for investors and entrepreneurs seeking a destination for their business ventures. Its location, favourable tax structure, and proficient workforce make it a prime choice for companies seeking to expand their operations. With all these benefits, it’s not surprising that Cyprus is considered the ideal location to set up a company in the European Union.
Cyprus: An Overview
Cyprus is a small island nation of 1.2 million people. Despite its small size, it has a thriving economy with a GDP of $28.41 billion. The country’s strategic location between Europe, the Middle East, and Africa makes it the ideal destination for businesses looking to expand their operations in these regions.
Benefits of Setting Up a Company in Cyprus
• A Compliant and Business-Friendly Tax Regime
Cyprus offers a conducive environment for businesses to thrive. It adheres to the standards and requirements set by the European Union (EU) and the Organization for Economic Co-operation and Development (OECD), and the country’s tax laws comply with international best practices: this ensures transparency and accountability in tax administration.
Furthermore, Cyprus has an extensive network of double tax treaties, which provide businesses with access to a reduced tax burden and facilitate cross-border trade. By offering a stable and predictable tax environment, enterprises can plan strategies for growth and expansion while complying with the OECD and EU requirements.
• A Stable Economy
Cyprus has a remarkably resilient economy, consistently bouncing back from adversity, which is proof of the nation’s strength. Despite facing multiple shocks in the past decade, the country has remained stable, diversifying, and drawing in fresh investment, earning its reputation as one of the EU’s most robust economies.
• Access to the EU Market
Investment in Cyprus is a superb choice for foreign companies and international investors looking to access the markets of the EU. The island has been a member of the Eurozone since 2008 and has more than 40 trade agreements with countries outside the EU. This makes it a welcoming business environment in an excellent location that enjoys access to Europe and other significant regional business centres.
• Access to well-educated, multilingual local and global talent
Companies can benefit from several talent-related incentives for setting up in Cyprus. These include:
• Visa-free access to the EU labour market • Streamlined processes for accessing the international talent pool
• Recently updated immigration policies that facilitate the recruitment of third-country nationals, where the right to family reunification is also provided
• Tax incentives for those willing to relocate and work in Cyprus for the first time
• Recent simplification of the naturalisation process
The country also has a high standard of living, with excellent healthcare and education systems, making it an attractive destination for employees and high-net-worth individuals.
Incorporating a Company Remotely in Cyprus
One of the other benefits of setting up a company in Cyprus is that anyone can set up their company remotely with the assistance of a licensed company service provider. Business owners do not need to be physically present in Cyprus to incorporate a company.
These factors make Cyprus an ideal destination for investors and entrepreneurs looking to set up a company.
Relocating your Headquarters to Cyprus
Cyprus is becoming an increasingly popular destination for HQ relocation, as the country offers an attractive environment for international companies to establish their base.
The Cypriot government has also introduced several incentives to attract more international businesses to the country, and many fintech companies have already done so successfully. Industries with headquarters in Cyprus include:
• Fintech and Electronic Money Institutions
• Foreign Exchange
• Shipping
• Gaming and entertainment
• ICT
• Crypto and blockchain (brokers, exchanges etc.)
• Private equity houses and investment funds
• Family offices
The list of large companies that have relocated to Cyprus is impressive, including: EcommPay, EcommBX, Exness, Nexters, My.Games, Wargaming, Celestyal Cruises, eToro, Nielsen, Amdocs, Sykes, Thomson Reuters and Argo Group Limited, among others.
Cyprus: A Gateway to Europe, the Middle East, and Africa
Cyprus is strategically located between Europe, the Middle East, and Africa, making it an ideal location for businesses looking to expand their operations in these regions. Cyprus has a well-developed transportation infrastructure, which includes two international airports and – as one of the world’s leading maritime centres – three ports, and three specialised oil terminals. This makes it easy for companies headquartered in Cyprus to access markets in Europe, the Middle East, and Africa.
Cyprus is also a member of the EU, providing businesses access to the largest market in the world. With a highly developed financial sector, it’s also an ideal destination for companies involved in fintech and other financial services.
The Competitive Advantage of Cyprus in the ICT Sector and IP Box
Cyprus has a competitive advantage in the ICT sector, with access to a highly skilled workforce within the country and beyond it, as well as a favourable regulatory framework.
The country has a thriving tech sector, home to many startups and established companies, and the Cypriot government has introduced several incentives to attract even more tech businesses.
The number of businesses in the global tech sector relocating or expanding their operations in Cyprus is on the rise, reflecting a positive trend in the country’s business environment: securing intellectual property (IP) is a pivotal factor, particularly within the ICT and tech sectors.
Cyprus provides robust and advantageous IP protection via domestic laws and a comprehensive network of EU and international agreements. It also offers a favourable tax regime for companies with intellectual property rights, as companies that hold IP rights in Cyprus can benefit from a reduced corporate tax rate of just 2.5% on profits earned from using the IP.
Conclusion
With its favourable tax system, legal framework, stable economy, and skilled workforce, Cyprus offers a range of benefits for foreign investors. Establishing a business in Cyprus can be a wise business decision if you are a business owner or an organisation seeking to expand your operations worldwide or set up your headquarters.
At SPL Audit we are ready to assist any entrepreneur in setting up their Corporate Structure and streamlining their business operations in Cyprus.
