Cyprus has traditionally been an attractive international financial services centre, combining a convenient location amongst three continents, advantageous tax rates, financial stability and credibility as well as a wide network of international treaties for the avoidance of double taxation.
There are many factors that contributed to Cyprus success as an International Business Center including its tax & legal systems, banking facilities and general infrastructure.
In 2007 Cyprus was voted the most attractive European tax regime for the Stability of its tax law, the consistency in interpreting its tax legislation and its low tax rates.
A general tax reform came into effect on 1 January 2003 to align the Cyprus tax system with European principles of equality and to demonstrate a commitment by Cyprus to the OECD against harmful tax practices.
The low tax rate together with the extensive double taxation treaty network provides companies resident in Cyprus with a strong basis for cross-border investments. Cyprus investment holding companies enjoy the additional tax advantage of dividend income and profit from the sale of shares being exempt from taxation.
The legal system of Cyprus is based on the English common law. As a result, businesspeople from countries familiar with this legislation find it very easy to do business in Cyprus, especially as the English language is widely spoken and used. The Continental System of administrative Law has been introduced and applied by virtue of the constitution.
EU Member State
Cyprus has been a full member of the European Union since May 2004 and fully adopted the Euro as its currency since January 2008. Cyprus-based businesses have therefore full access to EU markets with all privileges that this entails.
Cyprus maintains a highly professional workforce to provide support to international business such as in the areas of accounting, IT and ship management. The banking sector is among the most developed in the world with a number of local and international banks operating locally and the country enjoys a high standard of living with excellent telecommunication facilities in a stable and low-crime environment.