For a long time, the small island of Cyprus was known as a tax haven. After the fall of the Berlin Wall in 1989, Cyprus established itself as a tax haven. But the country has changed its strategy and developed into a country with many great opportunities for investment. The government decided to impose higher corporate taxes and started to participate in the Automatic Exchange of Financial Information. Because of its newly found transparency and cooperation with international banks, Cyprus has left its tax haven status behind. In fact, the government is enacting all sorts of incentives to attract foreign investment to help grow their economic status. If you’re interested in investing in Cyprus, keep reading this article.
The Benefits of investing in Cyprus
Although Cyprus is not a tax haven anymore, it still offers great investment opportunities. Cyprus is a gateway to different parts of the world and is currently accepting investment from all over. In order to stimulate foreign investment, the government has imposed all sorts of financial benefits, such as tax exemptions, cash rebates, and financial funding for foreign companies. Keep reading to find the right investements in Cyprus.
Strategic Geographical Location
One big benefit of Cyprus is its strategic geographical location. Cyprus is situated close to West-Asia, but is in fact a European country. With this strategic location, Cyprus can be seen as the entrance gate to both Europe and Asia, as well as Northern-Africa. This also means that Cyprus is already benefiting from investments from all corners of the world. Cyprus became part of the European Union in 2004 and has also adopted the euro. This strong currency puts Cyprus in an even more attractive position. Being part of the European Union also means that there are lots of financial benefits and support for Cyprian companies, as they are protected under European law.
Beneficial tax laws
Besides its strategic location, Cyprus also enjoys a modern financial system. Even though Cyprus is completely compliant with EU, OECD and international laws and regulations, it still offers one of the lowest tax rates of the EU. For example, the corporate tax rate in Cyprus is only 12,5%. Cyprus also offers a lot of financial benefits to its investors, such as dividend participation exemption, personal tax exemptions for new residents and non-domiciled individuals, and over 60 double tax treaties.
Even though Cyprus is a small island, it has a lot of material and human resources. The government stimulates Cyprus’ economy by offering various incentives for new residents, investors, and companies. One of the main goals of the government is attracting new funds by investing in innovative ideas. By exempting taxes, setting up financial aid, and setting up VAT returns on expenditure, it attracts a lot of foreign investors in all sorts of markets.
What to invest in?
Because of all the incentives that the government offers, companies from all around the world are invited to come to Cyprus and invest. Cyprus is offering tax exemption, cash rebate, and other benefits to filmmakers, so that they might come and record their films on the island. Another popular area of investment is infrastructure. Because of the strong growth of the island, Cyprus is in need of better infrastructure, and is currently seeking investors to help innovate its current system. Cyprus is planning on investing greatly in telecommunications, shipping, and transportation, to make commuting and transporting goods much easier.