Cyprus is situated in the eastern Mediterranean at the crossroads of three continents – Europe, Asia, and Africa. It covers an area of 9251 sq. km. Its climate is warm with about 340 sunny days a year and a light rainy season between November and March. The population is estimated at around 1 million and the capital is Nicosia.
The official languages are Greek, Turkish and English, with the latter being widely spoken by most of the population and in commercial and government sectors as well. The island is served by two international airports, the main one in Larnaka and the second in Pafos, with more than 1.000 scheduled flights to and from Europe, Africa, and the Middle East each week.
Cyprus is an independent republic since 1960. Cyprus leaving is of a very high standard. The legal system is based on English law and has been amended to incorporate European Union Directives.
Cyprus has excellent telecommunications that are made available through onshore and offshore banking units (OBU’s) and specialized financial institutions operating on the island.
On 1 May 2004, Cyprus became a full member of the European Union and as of 1 January 2008, the Euro was adopted as the main currency of the country.
The tax law was reformed in 2002 in order to align Cyprus with European Union directives. As part of this reform, all distinctions between local and international companies were abolished as from 1 January 2003, while at the same time maintaining a favourable tax regime for the international investor. The following are the main provisions of the new Tax law:
Cyprus income tax at 12.5%
Investment income from dividends and profit on sale of securities is exempt from tax
Dividends from Cyprus companies to non-resident shareholders is free from any Cyprus withholding tax
Carrying forward of tax losses and setting-off against future profits
Group relief provisions
In addition, Cyprus double tax treaties have been extensively increased. Cyprus maintains an extensive network of double tax treaties and negotiations are underway to conclude treaties with a number of other countries. More, importantly, the adoption of the European Union’s Parent-Subsidiary Directive effectively expands the Cyprus double tax treaties network to all European Countries at a corporate level.
Over the years, Cyprus has developed into an important financial centre and is the natural choice for international business.