Why Cyprus?

A highly respectable and entrepreneurial business environment

Cyprus is politically stable, has a fast-growing economy, a high standard of living, well developed telecoms and infrastructure and is a member state of the EU. The high standards adhered to by the banking, legal and accountancy professions contribute to the country's growing and international reputation as a business centre in its own right.

Establishing a Cyprus offshore company also provides a convenient "foothold" for non-EU countries such as China, India and Japan to engage in trade with Europe and vice versa with no exchange restrictions and offering the benefit of the 19% EU VAT – Europe's lowest permissible rate.

Did you know that Cyprus not only has the lowest corporate EU tax rate (12.5%) but also the lowest permissible EU VAT rate (19%)?

Helping you gain the advantage

A KPMG International survey of 400+ tax professionals, put Cyprus, Ireland, and Switzerland right at the top of the EU tax league table in terms of the attractiveness of their tax regimes. What the survey's participants liked was the combination of consistency in interpreting EU tax legislation, stability in resisting frequent changes to EU tax laws and each country's comparatively low tax rates. A significant number of respondents also believed that operating in a country with an attractive corporate tax regime provided a competitive advantage when competing for an overseas business.

According to the Heritage Organization — the authors of an annual report on economic freedom — compared to 183 other countries, Cyprus is in the top 20 of the world's rankings. The report's authors define an economically free society as one where... "governments allow labor, capital and goods to move freely, and refrain from coercion or constraint of liberty beyond the extent necessary to protect and maintain liberty itself."

The safe and sound option

Although the Cyprus tax environment is extremely attractive to business owners, Cyprus is not what's known — and doesn't wish to be known — as a 'tax haven'. The idea of zero tax is not without merit but there is always a price to pay for such generous incentives.

The main drawback of tax havens is that most of them are blacklisted and it is extremely difficult to enter into any legally robust contractual arrangement. Furthermore, not all tax havens are politically stable or economically strong. And few, if any, have double taxation agreements with other countries and next to none have a tried and tested legal system that's enshrined in UK law.

In other words, when you establish a business presence in Cyprus, the combination of the country's sophisticated regulatory framework, double taxation treaties and the fact that Cyprus is an acknowledged centre of financial excellence, ensures that your Cyprus tax planning arrangements will stand the test of time.

Republic of Cyprus

Cyprus flagLocation: Middle East, island in the Mediterranean Sea
Languages: Greek, English
Currency: Euro
Time Zones: GMT + 2 hours
Legal System: primarily based on English law


1 Lowest corporate tax rate in the entire EU:
Cyprus is the number-one jurisdiction chosen by international tax planners because it has the lowest corporate tax rate in the entire European Union (a uniform rate of 12.5%).

2 No withholding tax on dividends.

3 An extensive network of double-taxation treaties: we use these to create highly effective tax planning structures for our clients, allowing them to increase profit for minimal outlay.

4 Access to EU directives and EU VAT registration.

5 Confidentiality: protected by legislation. The shares can be held by nominees so that your anonymity is safeguarded.

6 Excellent infrastructure: with professional, legal (primarily based on English law) and tax-planning services. Banking services in Cyprus are of the highest standard. Finally, Cyprus enjoys an advanced telecommunications network as well as two airports (Larnaca and Paphos), which provide frequent flights to many destinations.