Is Cyprus offering something more than Singapore, or Luxembourg or Ireland or Hong Kong lately? The common positioning would be that Cyprus professional services sector, air and sea connectivity, EU status, UK law legacy, and Mediterranean lifestyle are very appealing to international companies. This value proposition is also enhanced with one of the lowest Tax systems in Europe. All these have made Cyprus a very competitive regional business centre. So, why so much buzz about the island lately.
The government of Cyprus apparently did come up with something new for boosting its international business hub status this year. We are putting a light on this new government approach and highlighting the headquartering investment option initiated under the permanent residency permit. It’s a move that aims to capitalise further on the historical momentum. This latest action plan is geared to attract even more businesses that want to establish or expand their operations in the island state.
In essence, the Headquartering option seeks to capitalise on the organic trend witnessed over the past decades where business groups decided to use Cyprus as their central headquartering base. It’s an important and critical decision for many business leaders because it involves relocation of the workforce and senior management, and in many occasions the relocation of the ultimate beneficial owner(s) and their families. The industries capitalising on this so far have been Family Offices, Shipping, Fintech, Gaming and Investment Funds.
This new effort aims to boost the relocation of technology industry executives and specialists to support the growth of the local IT, Fintech, Pharma and Gaming industries. Existing Investment Funds, Family Offices and Shipping already benefit from availability of local specialised personnel. In addition, the government is planning to present a number of additional reforms that embrace the upgrading of the state infrastructure and technologies that facilitate all these industries. In any case, the key headquartering incentives for all are summarised in the bullet points below:
- High Quality Healthcare
- High Standards of Living
- High Quality Professionals
- 12.5% Corporate Tax Rate
- Dividend Income is Exempt
- Pro-Business Legal Framework
- Profits from Trading are Exempt
- No Withholding Tax to Non Domicile
It appears that Headquartering in Cyprus is well designed and is here to stay. In fact, the momentum from these incentives has been tremendous and it does not seem to slow down any time soon. Of course there are external parameters a CEO must consider such as requirements of the third anti-tax avoidance EU directive and the overall implications of moving a business to another state/country. Nevertheless, the benefits offered to both businesses and individuals who relocate are amazing. To conclude, Cyprus has historically demonstrated that it is a business friendly and progressive European state. This is why it has focused on offering high quality solutions to global business and investors who choose to trust us with their businesses and people.