International Companies
Cyprus as an island is deemed to be an ideal place for international activities due to high quality of life, low cost of living, modern telecommunications and efficient banking services. There is infrastructure which means that high quality professional and managerial services can be provided by both lawyers and accountants. These combined with various tax incentives introduced to attract foreign companies, many enterprises established presences for their activities in Cyprus.
The international companies have to conduct their business activities and earn their incomes from sources outside Cyprus and the net profits of the companies are subject to a 12.5% tax rate.
Now local and international companies, previously known as offshore, are treated the same and are taxed at the rate above on their worldwide income. Nevertheless, one has to see additional advantages which can emanate from the registration of an international company in Cyprus or even a local one and not merely to see the top of the iceberg. Cyprus has signed many double tax treaties including Germany, Austria, China, Czech Republic, Hungary, India, United Kingdom, Ukraine and Russia. Due to the favorable treaties that Cyprus has with a lot of countries, most of the western corporations are using Cyprus for their operations in European countries.
This by itself can offer opportunities for serious investments and international tax planning. After all:
- Estate duty exemption on inheritance of shares in an international company, no inheritance tax and the estate duty only applies to properties physically located in Cyprus.
- Freedom of movement of foreign currency.
Every individual who enters or leaves the Republic of Cyprus from or to a third country or a Member State of the EU, and possesses cash or gold with value equal or greater than €10,000, is bound to declare in writing the aforementioned sum or gold to an authorized officer of the customs department during his entrance to or exit from the Republic of Cyprus.