Incentives to companies to come to Cyprus and Cyprus IP Box regime

Cyprus is aiming at expanding its tech space. For this reason, and in order to attract foreign investments, Cyprus offers a range of incentives to attract companies and persuade those based on the island to expand their activities, as it seeks to cater to the requirements of a technologically driven post-Covid world.

Cyprus already offers a host of different benefits both for individuals and businesses including expatriate tax exemption, subject to qualifying criteria, on either 20 or 50 per cent of earned income (dependent upon salary level), relatively low-income tax rates, and corporate tax rate of 12.5%, which is among the lowest in the EU, provides the effective tax rate of 2.5%. There are no succession taxes and no capital gains taxation (except for specific cases).

Significantly, investors can also make use of the Cyprus IP Box (more information you can find on the official webpage ), which allows for an 80 per cent tax deduction under the nexus approach. Besides having a favourable tax environment, Cyprus also has reasonable immigration rules and low living costs.

Cyprus is both a member of the EU and strategically located among three continents, a unique twin advantage for individuals and for businesses. To boost the island’s new investment drive, the Cyprus government recently released an Action Plan, which can be viewed at The Action Plan includes initiatives that are aimed at delivering on the government’s promise to foster a business-friendly environment.

In addition to the above-mentioned key points, there are numerous other actions planned. These include a comprehensive broadband strategy and digitalisation plan to enable a massive increase in digital connectivity by 2025, an update of the Companies Regulatory framework, the creation of an online platform for innovative, and hi-tech companies, the completion of judicial reform, and a bill for the facilitation of strategic investments. Furthermore, it was stated that there will be programmes and funding for upgrading the labour force by aligning employee skills with market needs, especially those in the technology and communications sectors.