Cyprus as a Leading Financial Center
Low Tax Rate
Cyprus differs from other financial centers because it has one of the lowest corporate tax rate in the European Union of 12,5%. There are also several tax exceptions.
Cyprus tax treaties allow for international tax planning that may be very beneficial. Cyprus has a wide network of double tax treaties with 46 countries around the world. Several other new treaties are under negotiation.
Some treaties are especially beneficial for investors such as the ones with Russia and Ukraine and some of the new Republics emerging from the Soviet Union. Investing in these countries has always been best from a tax angle if done through a Cyprus corporation. In fact the tax treaty with Russia is one of the most advantageous treaties that Russia has signed.
Cyprus is firmly established as the ideal gateway for European Union inbound and outbound investment.
Cyprus is in no way considered a tax haven or in conflict with international tax standards. Its tax system is within the spirit of the European Union Code of Conduct.
It also applies all the European Union Directives. Cyprus is also placed on the Organization for Economic Cooperation and Development’s (OECD) “White List” of jurisdictions which have substantially implemented the internationally agreed tax standards and therefore has a reputational advantage over some of its competitors. Being on this list provides businesses a sound and reputable environment from where they can operate.
There are many foreign banks from the Middle East, Europe, Africa and Asia that operate as subsidiaries, branches or representative offices in Cyprus.
Many companies manage their EU, North Africa and Middle East operations from Cyprus at a considerably lower cost. A substantial number of companies involved in the trading or distribution of fast moving consumer goods use Cyprus as a trading base in the Region.
Cyprus is an internationally renowned shipping center. The merchant fleet of Cyprus is the 3rd largest in the European Union and the 10th largest in the world. The unique geographical position at the juncture of three continents, the advanced infrastructure and services, as well as the very attractive taxation and other advantages makes Cyprus an ideal location for ship owning, ship management and ancillary shipping-related companies. More than 130 ship owning, ship management and shipping related companies maintain offices in and conduct international activities from Cyprus, including some of the world’s largest international ship management companies.