Listing the Advantages of Cyprus Tax Planning

tax planning

Geographically speaking, the location of Cyprus is more than enough reasons for you to invest in the island; but there are more advantages you should learn and discover to ultimately convince you that there should be no hesitation in registering your company in Cyprus now.

tax planning

Tax Benefits of Cyprus Holding Companies

If there is one country that best offers ideal tax benefits for a holding company, then Cyprus should definitely be on top of the list due to the following reasons:

  • Purchasing stock shares from foreign companies will not give you tax worries because are exempted from tax payments.
  • Outgoing interests, dividends, and royalties are exempt from withholding tax irrespective of what country may be receiving it
  • Nonexistence of strict transfer pricing rules, experienced in most countries
  • Exemption of capital gains tax for the transfer or sale of securities, including the liquidation of the actual Cyprus Holding Company
  • Attractive low tax duties for the establishment processing of companies
  • Non-application of VAT registration rules and compliance

Tax Benefits of Group Finance Companies

Group Finance Companies enjoy a different list of tax advantages in Cyprus. Some of these are listed below:

  • Most high tax country group operating companies prefer to register group finance companies in Cyprus because of tax optimization benefits and the absence of thin capitalization.
  • More tax deductibles and interest payments given to the Cyprus Financing Company
  • More opportunities to provide loans to foreign countries, particularly those where Cyprus has signed Double Tax Avoidance Treaties

Tax Benefits of Royalty Routing Structures

Even those that operate and act as intermediary companies enjoy the following tax benefits in Cyprus:

  • A low corporate tax rate of 10%, which remains the lowest percentage in all members of the European Union
  • Guaranteed and effective protection of purchasing intellectual property rights for registered Cyprus companies
  • The list of over 49 Double Tax Avoidance Treaties gives more freedom for these companies to engage in intermediary transactions with other countries, yet remain free from high tax payments

Tax Benefits of Offshore Companies in Cyprus

In comparison to other countries offering registration opportunities to offshore companies, Cyprus is still preferred by many, primarily because it is a member of the European Union. Moreover, you have the following tax benefits to enjoy under its jurisdiction.

  • Application of only 10% corporate tax for resident companies and 4.5% for non-resident companies
  • It is time to say goodbye to double taxation with the Double Tax Treaties Network signed by Cyprus. This is an additional reason to smile because of lower tax rates and 0% rate earned in some instances when engaging business with these countries.
  • Freedom of movement of profits you may have earned from non-resident investments without worrying about dividends, royalty, and interest tax rates.

Aside from these tax benefits, the Government of Cyprus has invested well in its citizens by guaranteeing they will be skilled for the jobs required by the booming investment industry in the country. There is no scarcity of financial, legal, and secretarial employees because almost 50% of the population have the highest degree education to provide the services you will need. This makes Cyprus the best place to invest for your future company’s gain.

Lucas Strawson is a financial planner that has assisted numerous clients in preparing Cyprus tax planning strategies that will benefit their desire to penetrate various countries globally. Learn more about Cyprus and see how beneficial it will be for your future plans.

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