Why Cyprus?

Cyprus offers unique tax opportunities to international business investors

  • The lowest corporate tax rate in the EU
  • A network of favourable double tax treaties
  • Access to EU Directives
  • No withholding tax on dividends and interest paid (non tax residents of Cyprus
  • No withholding tax on almost all royalties
  • No capital gains on profits from the sale of shares, securities, bonds and units
  • No tax on foreign dividends and interest received
  • No tax on foreign Permanent Establishments (PE)
  • No thin capitalization rules
  • Absence of Controlled Foreign Company


Cyprus’ tax system is in full compliance with EU requirements and also within the OECD requirement against harmful tax practices. The main features of the Cyprus Corporation tax are as follows:

Basis of Taxation

Under the new Income Tax Law, all distinctions between local and international business companies have been removed. The taxation of companies is now based on residence. All companies that are tax resident in Cyprus are taxed on their worldwide income accrued or arising from sources both within and outside Cyprus. Non-resident companies are taxed in Cyprus only on income derived from a permanent establishment or immovable property in Cyprus. A company is resident of Cyprus if it is managed and controlled in Cyprus. Registration or incorporation in Cyprus is not sufficient to render a company liable to tax in Cyprus.

Network of double tax treaties

A comprehensive network of double taxation treaties has been integral to Cyprus’s success as a financial centre. It has concluded tax treaties with more than 40 countries, and treaties are under negotiation, or awaiting ratification, with half as many more. Most of the Treaties follow the OECD model and their objective is that of reducing or eliminating the double taxation payments imposed by the Contracting states on cross border transactions. This is beneficial for trading and investment activities with other countries through Cyprus. Foreign investors have the opportunity to facilitate investments and trading through Cyprus, with a country that Cyprus has a treaty with, allowing for a reduction or elimination of the withholding taxes.