In recent years there have been an increasing number of people looking to invest in Cyprus. The reasons for this are many and varied. Let's look at what Cyprus has to offer, both as a home and an investment hub.
Geographically Cyprus is well placed. It sits in the East of the Mediterranean Sea, with Turkey to the North, Israel to the South, and Syria and Lebanon to the East. It is at the meeting point of three continents, Europe, Asia and Africa. With a vibrant social and economic life and a near-perfect climate, it is a much sought-after place to live and work.
Increasingly people are interested in investment in Cyprus and are moving here, taking advantage of the healthy Lifestyle. Taxes in Cyprus are very desirable. The island is a great place to reside, with plenty of apartments, houses and villas on the market. You are always close to the sea, and the local cuisine is exceptional.
Infrastructure in Cyprus is developing well. There are no railways nor inland waterways, but it has an excellent road network, covering about 13,000 Km, approximately 8,000 km of which are paved. The main highway is a dual carriageway or motorway standard that links the main towns of Paphos, Limassol, Nicosia, and Larnaca. Journeys between coastal towns have the added advantage of being served by boat.
The Cypriot legal system's regulatory framework is solid due in part to its mandatory compliance with EU law. The country is, of course, a former British colony. Therefore the legal system here is based on English Common Law. This system has recently faced a few amendments to comply fully with European law.
The law in Cyprus offers foreign businesses a stable environment in which to operate. The legal system here is one of the most favourable in Europe. In addition, the country has substantial counter-money laundering and anti-terrorism measures in place.
Following the financial crash in 2013, the Cyprus Government signed an advantageous bailout programme with the European Commission, the European Central Bank (ECB) and the International Monetary Fund (IMF). Subsequently, Cyprus fought back, thrived and earned its place as one of the earth's most dynamic and solid business centres. Its thriving economy is attracting plenty of international investment.
For those investing in Cyprus, there are many benefits. First, its location is second to none. Sitting as it does on the edge of three continents and being EU-compliant, investors have the world literally on their doorstep. Costs are low here, about 10% less than the rest of Europe and ranking 37th out of 135 countries according to the Numbeo list of best countries for the cost of living.
As with anywhere, starting a business and investing brings a few challenges. However, you can quickly meet them if you approach things in a logical manner. The paperwork involved in company registration in Cyprus can seem daunting. Still, it is easy to manage with the right lawyer. If you are constructing new premises, building permits and service connections take a long time. According to the World Bank, the ease of registering a new property ranks a poor 99th in the world.
Although Cyprus' capital gains tax rates are favourable, the administration in paying it and other corporate tax payments can be a real issue. Enforcing contracts is, likewise, a long, drawn-out process.
Trust goes a very long way for those who invest in Cyprus. Nothing moves swiftly; however, once you establish trust, Cypriots are very loyal and trustworthy.
There are opportunities for excellent Cyprus investment in many different sectors. If you are considering investing or what business to start in Cyprus, here are some vibrant areas:
Shipping in Cyprus has enormous advantages thanks to its geographic location, attractive operational and legislative shipping infrastructure, great tax framework and excellent communications network. Over the years, Cyprus has built a thriving, robust maritime industry offering some real competitive advantages. Cyprus is one of the world's safest and most competitive shipping centres. It provides much by way of services, registration fees and taxes.
Cyprus is a rapidly developing tech hub within the European Union. Its proximity to the Middle East and North African (MENA) sector means it has easy access to over 500 million consumers. Many International tech companies have already built headquarters here. It's the perfect location for tech startups, headquarters and development centres.
The tourism sector already accounts for some 15% of the GDP of Cyprus. Four million tourists already contribute to the country's funds. The government has worked hard to maintain interest from leading investors and hotel groups, who have a solid presence on the island. With major projects like hotels and luxury resorts, marinas, and golf resorts, Cyprus is developing into one of Europe's most exciting tourist destinations.
The new integrated City of Dreams Casino Resort will open in 2023. The 14-storey resort has nine restaurants and cafes, three swimming pools, and a family adventure park. It will be the largest integrated casino resort in Europe.
Flying in under the radar somewhat, pharmaceuticals now account for €300 million of the country's GDP. They now supply about a third of the island's domestically produced exports. The sector has developed a terrific market for manufacturing generic medicines for large pharmaceutical companies. It exports to over 110 countries worldwide. The pharmaceutical industry employs about 2,000 people on the island, and about 55% of this workforce are young scientists. The future looks very good indeed.
With regard to Intellectual Property, Cyprus is an attractive location. Research and Development businesses benefit from the country's efficient tax rates and the legal protection afforded by its EU Membership and by the signatories of all major IP treaties and protocols. Furthermore, the Cypriot government encourages innovation, startups and entrepreneurship. It promotes research and innovation and aims to build a creative, knowledge-based society that is strong in entrepreneurial spirit. As a result, R&D and IP in Cyprus are very vibrant businesses.
The real estate market in Cyprus is highly buoyant. The existing stock of apartments, houses and villas is supplemented by the addition of some very high-end condo developments. Moreover, the island's undoubted beauty is drawing many here to live, work and retire. As a result, Cyprus is an excellent place for investment in real estate.
Income tax rates in Cyprus are as follows:
Cyprus wants to attract talented professional talent from all over the world. It is very keen to facilitate this. Thus the country introduced new taxation incentives. In addition, social insurance payments in Cyprus are 8.3% of gross earnings up to a maximum salary of €60,000.
In addition, the government offers some very favourable tax incentives for foreigners who choose to invest in Cyprus. These incentives include:
Cyprus investors who are Cyprus tax residents with an annual income of more than €100,000 enjoy a 50% exemption from personal income tax for ten years.
This enables companies to deduct deemed interest on new equity funds. Interest is calculated based on a reference interest rate. This rate is set at the ten-year government bonds yield, + 3%.
The NID Formula = (Reference Interest Rate) x (New Equity). It cannot exceed 80% of the company's taxable income for that year.
The government introduced this to boost new investment and decrease the tax burden on the corporate sector.
Investment income, be it dividends, interests or rent etc., of people with Cyprus
tax residency who don't live in Cyprus, are exempt from defence tax. This applies to income from Cyprus and abroad.
Company Formation and Registration
Cyprus company registration is relatively straightforward as long as you follow these guidelines.
There are many reputable law firms on the island. Get recommendations and choose one.
Ask your lawyer to determine the exact type of entity to suit your business.
Choose your company name and register it accordingly with the Registrar of Companies Cyprus. This is a legal requirement.
There are several excellent banks here offering corporate bank accounts. Opening the account usually takes about four weeks. Check them out and choose the best bank in Cyprus for your purposes.
You have at least one director and a secretary.
Your lawyer will guide you through this process.
Cyprus VAT registration is straightforward. First, obtain a VAT number from the Tax Department and fill out a social contribution form with the Ministry of Labour, Welfare and Social Insurance.
There are many different types of business permits and operating licences in Cyprus. Your lawyer will help ensure that you get the right one.
Always maintain a line of communication with your lawyer throughout the whole process. Doing so will ensure you don't foul any potential pitfalls.
Once you have qualified to move to Cyprus moving your family is relatively easy. Your lawyer will sort out their immigration papers. If you have children of school age, there are good schools on the island. In addition, there are English-speaking private schools which will help your children to make friends and settle in quickly. Cyprus is family oriented, so this will be a positive move for them.
If your staff want to join you, they should qualify with no problem as you offer them employment. Again, this is where your solicitor can assist. Your Cyprus company will be able to employ 30% of third-country nationals. The other 70% will need to be Cypriot.
Some stunning properties are available in Cyprus, and you will get a lot for your money. Apartments, houses and villas are available in almost all areas of the island. But, of course, location is everything. So it's always best to spend time here before buying. Cyprus has vibrant tourist areas, quiet sleepy villages, sea views, and isolated countryside locations, so you'll need time to take it all in.
It's always a good idea to view any potential property in daylight and at nighttime.
Plenty of lawyers offer help with visas and residency on the island. Cyprus welcomes people wishing to relocate here. European citizens of Switzerland, Iceland, Liechtenstein, and Norway do not need a visa. British citizens can come for up to 90 days in any 180-day period without a visa.
Once you have your work permit, you can apply for long-term work visas. Again, your lawyer will assist, but you will need: Travel health insurance, a certificate of medical clearance, a police clearance certificate, and proof of financial means.
If you are investing, check out the Cyprus golden visa to fast-track your application. Non-EU nationals can stay for one year on long-stay visas. Then they must apply to the Ministry of the Interior for a residency permit, which costs €60. Finally, if you wish, the country offers Cyprus citizenship by investment.
If you need financial advice, plenty of companies on the island offer this service. They are here whether you want a small local company or a big international firm. Talk to others who have made the move and choose one to suit your needs. Personal recommendations are always a good way to go. Whatever you need from a financial advisor, Cyprus will be able to provide it.
Reputable law firms are practising in all aspects of law in Cyprus. Ask for personal recommendations and find the right lawyer for your exact needs. In addition, the local bar association can provide a guideline, as can internet searches.
Depending, of course, upon your particular area of expertise, Cyprus can offer exciting locations in which to base your business. There are, however, three main business destinations:
Whatever your area of business and wherever you settle on as your business headquarters, Cyprus can offer you an exciting, dynamic workplace. Moreover, you can choose a reputable lawyer and your best bank in Cyprus. In addition, the island offers a highly enviable standard of living with superb schools and healthcare centres. With favourable tax benefits and a reasonable cost of living, this island in the sun has everything. As a result, those who invest in Cyprus tend to stick around.
Answer: Yes, Cyprus is undoubtedly a terrific place in which to invest and build a future. A welcoming local population and a young, keen workforce offer everything you will need for success.
Answer: The best investments in Cyprus are in high technology, shipping, tourism, pharmaceuticals, innovation, research and development, and real estate. For those with the right experience, retail and food and beverage sectors also offer great opportunities. There are also openings for those interested in investing in trusts in Cyprus.
Answer: Cyprus is a good investment because it is a member of the European Union and a market leader with the added attraction of being backed up by a stable currency and well-developed regulations. It is also in a beautiful geographical location.
Answer: To invest in Cyprus for citizenship will set you back €2 million in real estate or €2.2 million in investments in Cyprus' economy.
Answer: The country is not officially recognised as a tax haven, with a corporate tax of 12.5%. It has the same status as many other European countries, as identified by The Organisation for Economic Co-operation and Development (OECD). However, Cyprus has plenty of benefits for investors and companies operating in the European Union. In short, it is a very favourable place to do business.
Answer: Yes, a foreigner can buy a house here. It may take a while but buying a home on the island is straightforward.