Cyprus Business Environment
There are many factors that contribute to making Cyprus an attractive environment for doing business. These include the following:
Perfect location that allows investors to reach new, highly promising markets
Cyprus, as it lies at the crossroads of Europe, Asia and Africa, is close to the busy shipping and air routes linking Europe with the Arab world and the Far East, representing a strategic hub for business activities in the region. The island is two hours ahead of Greenwich meantime, seven hours ahead of New York, seven hours behind Tokyo and in the same time zone as Athens.
Substantial growth potential and a business friendly environment
Cyprus has an outstanding infrastructure for businesses with good telecommunications; this together with the widespread use of the English language and a legal system mainly based on English law makes the island a very suitable and effective business base.
Nicosia, the administrative capital, is also the principle business centre, even though Limassol, with its port, and Larnaca, with the main airport, are also important in business terms.
Highly educated workforce
Cyprus human talent comprises by a well-trained and resourceful labour force. Skilled professional, technical and clerical staff, with extensive experience and fluency in English and other languages are available for employment at reasonable remuneration.
The high education level of the population is proved by the fact that Cypurs exhibits the highest percentage among the EU of people between the ages 25-35 possessing tertiary education qualifications.
Favorable tax system
Cyprus due to its geographical location and existing infrastructure, today constitutes a world service center. Business people benefit from the country’s simple tax legislative framework with competitive tax rates, also in line with the E.U acquis and governed by a wide range of double taxation agreements with other countries.
Find below some of the main provisions of the Cyprus Tax legislation regarding:
· Corporate Tax
All companies are subject to a uniform tax rate of 12.5%.The lowest tax rate in the European Union.
Personal Income Tax
One of the lowest top statutory personal income tax rate based on the Eurostat΄s data.
individuals are subject to a scaled assessment rate on their annual income, starting with 20%, 25%,30%, ending at 35%, with the first €19500 of income being non-taxable.
· Double taxation agreements
Cyprus has developed a wide network of Double Tax Agreements with over 60 countries, achieving and avoiding the assessment of the same income twice.
· Ship Management
Cyprus is considered to be one of the most competitive shipping centres in the world. Income from Ship Management is assessed under Tonnage Tax subject to rules and conditions.
· Value Added Tax
Liable to V.A.T. tax are those entities selling goods or providing services within the Republic of Cyprus, and those importing goods from other member states and Third countries.
V.A.T. rates are:
Standard rate: 19%
Reduced rates: 9% / 5%
Zero rate: 0%
Modern banking and insurance networks
The country offers a complete range of integrated professional services, capable to contribute in any field of legal entity including the areas of Accounting, Banking & Financial Services, Business Consulting, Computing & IT, Design, Education, Engineering, Legal Services, etc.
Moreover, substantial investment has been made into adjusting the island into a major telecommunications hub in the region by structuring a technologically advanced infrastructure, in terms of cable and satellite.
Comparatively low operating costs
Since Cyprus entered the EU Zone, it has implemented the European Union’s legislative framework as regards to labour relations. Nevertheless, labour costs are considerably lower in Cyprus in comparison with the EU average. Correspondingly, office and living accommodation is relatively inexpensive with substantial choice, whilst the overall standard of living is high.
High standard of living
Cyprus boasts a moderately high standard of living by European standards. The overall cost of living is around the 1/3 to 2/3 of most sections of Europe or the USA. Surveys show that Cyprus towns possess one of the lowest costs of living within a developed nation. The high quality of life, combined with the low cost of living in Cyprus, have transformed the island the Mediterranean's third most well-linked destination for European property buyers.
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