Companies established in Cyprus and their foreign employees enjoy many privileges. A summary of these is given below and details of the facilities and concessions extended to international companies and their expatriate employees are given towards the end of this section.
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no withholding of tax on dividends
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net profits of international business companies are subject to tax at the rate of 10 per cent only
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full tax exemption on profits of international business partnerships
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full tax exemption on profits of international business branches if their management and control is outside Cyprus
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net profits of international business branches are subject to tax at the rate of only 10 per cent if their management and control is in Cyprus
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all expenses incurred for the earning of income, as well as annual allowances on fixed assets, are allowed as a tax deduction
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full estate duty exemption on inheritance of shares in an international business company
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full capital gains tax exemption on capital gains, except on sale of immovable property situated in Cyprus
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full exemption from local social insurance schemes in respect of foreign employees of international business entities
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full stamp duty exemption on contracts entered into by international business entities
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foreign employees of international business entities providing their service in Cyprus, are liable to Cyprus income tax at a rate equal to half the normal Cyprus rates. Normal rates range from nil to 40 per cent and, therefore, the maximum tax rate of such employees is 20 per cent
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foreign employees of international business companies living and working outside Cyprus are exempt from income tax if they are paid through a bank operating in Cyprus. If such employees are paid directly abroad they are taxed at a rate equal to one-tenth of the standard rates and, therefore, their maximum tax rate is 4 per cent
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full import duty exemption for the importation or purchase of cars, office and household equipment (except furniture and air-conditioning equipment) for the use of the of the international business entity and its foreign employees if the international business entity maintains a fully fledged office in Cyprus
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residence and work permits for the foreign employees and residence permits for their families can be readily obtained if they maintain an office in Cyprus
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freely transferable currency accounts (in any currency) can be kept both in Cyprus and abroad
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no exchange control restrictions
If you would like further information or want to discuss any aspect of incorporating offshore please contact us
