Tax Incentives and advantages for establishing a company in Cyprus

• 12.5% corporate tax rate on the company’s profits. The tax rate remains constant at 12.5% regardless of the amount of turnover and profits. The tax rate can be adjusted – reduced depending on investments, depreciation, and other expenses related to the company.
• 0% dividend distribution tax (the dividend is the distribution of profits from the company to the shareholder/s). The 0% remains constant regardless of the amount of profit-dividend distribution.
• 0% tax on profits declared in Greece as a dividend.
• 0% social security contributions for the shareholder/s of the company. There is no obligation for the shareholder/s of the company to have insurance.
• 0% advance tax payment for the next year. There is no obligation to pay an advance tax for the following year.
• 2.5% tax on profits for intellectual property companies – IP BOX.
• The company is not offshore as the Republic of Cyprus is a member of the European Union and they are called onshore (domestic). Therefore, the company is European – onshore (domestic) and is included in the intra-community VAT regime (VIES) for transactions within the European Union.
• It does not have NACE codes (activity codes) in its statutory operation (company’s articles of association). The company can carry out either commercial or service provision activities regardless of the object, worldwide.
• It can own real estate all over the world.
• Stable tax and social security regime in recent years without any changes with an increase in taxes or social security contributions.
• Low social security contributions for your company’s personnel (if you have them or want to acquire them). Cyprus has one of the lowest social security contribution rates for employees.
• Signed bilateral agreement for the avoidance of double taxation with Greece and with hundreds of countries around the world.
• There is no professional activity tax for companies, as it was abolished in 2024 by a decision of the government of the Republic of Cyprus.
• There is no other hidden tax for shareholders who are not Cypriots.
• You can have a company in Cyprus being its sole shareholder.

• Stable and guaranteed banking system.
• The annual dividend is not mandatory. You can distribute profits when and if you wish.
• Entertainment expenses (coffee, bars, restaurants, etc.) for business purposes (The lower of €17,086 or 1% of the company’s gross revenue).
• In Cyprus, there is the “institution of trusts,” which consists of the obligation of a person (the trustee) to manage for a specified period of time property (the trust property), which is transferred to him by the owner of the property and creator of the trust (the settlor), for the benefit of a specific person or persons (the beneficiary) according to the wishes of the settlor, oral or written, which are expressed in a document (trust deed) or in a will.
• In Cyprus, the International Financial Reporting Standards (IFRS) are followed, as in most European Union countries.
• A Cypriot company is a fully recognized company of the European Union, according to the OECD and the EU.
• 0% tax on dividends between Cypriot companies, while dividends from foreign investments are also exempt from tax (with criteria that are easily met) provided that the investment share exceeds 1%.
• Capital gains tax is imposed only on immovable property located in Cyprus or on shares of a private company that owns immovable property in Cyprus.
• 0% tax on profits from the sale of securities (including shares).
• Tax losses are carried forward for the next 5 years.
• Exemption of profits arising from a permanent establishment abroad.
• Exemption of profits arising from the sale and purchase of shares, bonds, foreign exchange, and other financial derivatives.
• There are no thin capitalization rules.

• Low cost of incorporation and operation of the company.
• Serious and secure banking system.
• Free movement of capital.
• Use of Greek and English languages.
• Member of the European Union since 2004.
• Member of the UN.
• Harmonized legislative framework based on the European Acquis.
• Harmonized tax legislation based on the guidelines of the OECD (Organisation for Economic Co-operation and Development) and the European Commission.

• Stable legal and tax environment.
• Double Taxation Avoidance Agreements with over 55 countries.
• Modern infrastructure system.
• Stable and modern public administration.
• Attractive and friendly business environment for foreign investors.
• Highly educated professional staff.