Cyprus at a glance
Cyprus is a recognized financial centre and a significant gateway for EU inbound and outbound investments. It complements the traditional links Cyprus has with central and Eastern Europe, Russia, India and China. Further, the harmonization of the EU capital markets, the adoption of the "Single EU Passport", the introduction of Alternative Investments Law in the EU etc have paved the way to significant cross border opportunities for investors wishing to engage in the wider EU business market using Cyprus tax ecient structures.
The island hosts a noteworthy expatriate community, having the third highest percentage of foreign citizen residents in the EU.
Cyprus companies and trusts
Investors can reap the benefits of cross border opportunities within the EU by selecting the island to host their investment holding and use it as a springboard to carry out business activities, raise funds or list their shares in EU capital markets of their choice.
The formation and registration procedures including various administrative needs can normally be completed within a period of two weeks. The following are some of the advantages that Cyprus companies enjoy:
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Uniform corporate rate at 12,5 % corporation tax, amongst the lowest in EU
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Effective tax rate very low due to participation exemption on capital gains (shares, options, bonds, titles, units, etc):
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No minimum holding period requirement
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No minimum shareholding
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Participation exemption system on dividends from abroad
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No thin-capitalization rules
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No WHT on payment of dividends, interest, royalties
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Absence of Controlled Foreign Company (CFC) rules
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Tax-free reorganization rules and group relief provisions
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Arm’s length principle for related party transactions
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Unilateral, bilateral tax relief and full adoption of all EU directives
Corporation tax
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Lowest corporate tax rate in Europe
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12.5% on trading profits applicable to all companies
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Liberal approach to deduction of expenses, costs and allowances
Dividend income
Exemption on dividend income. Condition for exemption:
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The above exemption does not apply if the non - resident company paying the dividend engages directly or indirectly more than 50% in activities that lead to investment income and
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The overseas tax burden on the income is significantly lower than the Cyprus tax burden (lower than 6,25%)
No withholding taxes
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Dividends
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Interest
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Royalties
Oneworld Ltd is one of the leading advisory, corporate and business services firms in Cyprus, with offices in Nicosia, Limassol and associated offices in key business centres of the world. We advise on tax planning, incorporate and administer companies in zero and low tax jurisdictions and provide boutique services including citizenship and residency services.