Cyprus is strategically located in the Eastern Mediterranean. As the third largest and third most populous island in the Mediterranean, it stands as a beacon of stability and growth in the region.With an area of 9,251 kmĀ² and a population of approximately 1 million, Cyprus is a full member of the European Union and the Eurozone. This not only provides access to a vast market but also ensures a stable economic environment backed by EU regulations and the strength of the Euro.

Cyprus has an open free-market, service-based economy with a long record of successful economic performance. Its strong business environment, highly educated workforce and favorable and stable tax regime have remained in place and allowed the country to pass quickly through the current economic crisis. Looking ahead, with measures ongoing to reform public spending, accelerate initiatives to boost investments, develop the investment fund sector and push forward with natural gas exploitation, Cyprus ensures that its prosperity endures. The Cyprus economy has been expanding rapidly with growth acceleration during the last decade. The winter forecasts of the European Commission announced on February 2024, indicate that after the impressive growth of 5,1% in 2022, the economic activity in Cyprus slowed down in 2023 while for the years 2024 and 2025, the real GDP is expected to recover.

Attractive tax regime and incentives

  • One of the lowest corporate taxes across the EU at 12.5%
  • An attractive Double Tax Treaty network which covers over 60 countries
  • Access to every single EU Tax Directive
  • Reduced residential VAT rate. Commercial property in Cyprus attracts a 19% VAT rate, meanwhile, residential property only attracts 5% on the first 200 square meters of the first and primary permanent residence property
  • Dividend income exemption based on relaxed conditions
  • Tax exemption on capital gains and gains from trading in securities
  • Tax neutrality on Foreign Exchange Gains
  • No inheritance or succession taxes
  • No withholding taxes on outgoing dividends, interest and or royalty settlements
  • Notional interest deduction available for equity investment into Cyprus incorporate companies
  • Very attractive personal tax regime for international expatriates residing in Cyprus for first time
  • No immovable property taxes
  • Specially tailored provisions for the investment funds industry
  • Competitive Intellectual Property Regime
  • Competitive Tonnage Tax for Shipping companies and an open registry approved by the EU
  • Tax deductions to encourage investment into Cypriot startups

Incentives through other sectors

Great efforts have been made in education (excellent education facilities including many UK universities having campuses on the Island), healthcare facilities, banking, shipping, science and technology, privatization, innovation, and liberalism.

Read more at the Doing Business in Cyprus Guide

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