Headquartering in Cyprus: A Strategic Move for Business Success

In recent years, Cyprus, and particularly Limassol, have emerged as a prime destination for businesses seeking to establish their headquarters. Boasting a strategic location, favorable tax incentives, and a thriving business environment, Limassol offers an array of benefits for companies looking to expand their operations.

The Headquartering Scheme

On the 10th of May 2022, the Cyprus Ministry of Finance announced a very attractive set of tax incentive measures aimed at attracting foreign companies to relocate their headquarters to Cyprus. This set of measures complements the tax incentive scheme announced in October 2021 which includes inter alia the introduction of the Cyprus Digital Nomad Visa and the right of family members to re-unite and undertake paid employment in Cyprus.

The Cypriot government’s attractive “Headquartering Scheme” specifically targets international companies seeking to establish regional or international headquarters on the island. This scheme offers significant tax benefits, including exemptions on corporate tax for certain headquartering activities and a simplified personal income tax regime for employees relocated to Cyprus.

A Strong Legal System

Cyprus adheres to the British common law system, providing a familiar and transparent legal framework for international businesses. This system, coupled with a well-established legal infrastructure, ensures secure and reliable business operations.

From a legal standpoint, Limassol offers stability and a well-established regulatory framework that instils confidence in businesses. Cyprus’ adherence to EU laws and regulations ensures transparency and compliance with international standards, providing a secure legal environment for companies operating in the city. Moreover, Cyprus’ robust legal system, coupled with its efficient judiciary and arbitration mechanisms, offers effective dispute resolution mechanisms, safeguarding businesses’ interests and investments. This legal stability and regulatory certainty further reinforce Limassol’s appeal as a premier destination for headquarters. Combined with the city’s strategic location, favourable tax regime, business-friendly environment, and quality of life, Limassol provides an ideal setting for businesses to thrive and expand their operations. Whether it’s accessing global markets, optimizing tax efficiency, fostering innovation, or ensuring legal protection, companies can rely on Limassol’s comprehensive ecosystem to achieve their business objectives and drive long-term success.

Favourable Tax Regime

Cyprus boasts one of the most attractive tax regimes in the European Union, making it a magnet for businesses seeking tax efficiency. With a corporate tax rate of just 12.5% – one of the lowest in the EU – companies headquartered in Limassol can enjoy significant tax savings on their profits. Additionally, Cyprus offers a wide range of double taxation treaties, providing further incentives for businesses to establish their base in the city.

• EU & OECD Compliant/Access to EU directives Dividend participation exemption.

• No tax on profits from disposal of securities and no tax on capital gains under conditions.

• Attractive IP Regime and attractive income.

• Tax for New Residents Dividend income (non domiciled scheme) and profit on sale of shares and other securities is tax exempt.

• The VAT on acquisition of new residential property can be as low as 5%.

• There are no transfer fees if the transaction is subject to VAT and 50% if not Immovable Property.

• Tax (IPT) was fully abolished from January 2017.

• Can provide an EU Passport with a minimum investment of €2 million 50% tax exemption to all newcomers employees with annual salary at least €100.000.

• Tax on overseas pensions with one of the lowest rate – 5%.

• Special reduced VAT for private yachts No withholding tax on outgoing payments (dividends-interest-royalties).

Business-Friendly Environment

Limassol fosters a dynamic and business-friendly environment that nurtures innovation and growth. The city is home to a diverse ecosystem of industries, including finance, shipping, technology, and real estate, offering ample opportunities for collaboration and networking. Moreover, Limassol’s skilled workforce, combined with its robust infrastructure and modern amenities, provides businesses with the resources they need to thrive in today’s competitive landscape.

Quality of Life

Beyond its business advantages, Limassol offers an exceptional quality of life that attracts professionals from around the world. With its Mediterranean climate, stunning beaches, and vibrant cultural scene, the city provides an enviable lifestyle for employees and their families. From leisurely strolls along the promenade to world-class dining and entertainment options, Limassol offers a perfect balance between work and leisure.

Supportive Business Ecosystem

Setting up a headquarters in Limassol is made easy by the city’s supportive business ecosystem. From streamlined company registration procedures to access to professional services such as legal, accounting, and advisory firms, businesses receive comprehensive support every step of the way. Additionally, government initiatives aimed at promoting entrepreneurship and innovation further enhance the attractiveness of Limassol as a business destination.

How can we help?

• Our law firm is ideally positioned to assist you in establishing your company’s headquarters in Limassol, Cyprus. Here’s how we can be of service:

• Company Formation and Registration: We will guide you through the entire company registration process, ensuring all legal requirements are met for a smooth and efficient setup.

• Headquartering Scheme Expertise: We have in-depth knowledge of the Cypriot Headquartering Scheme and can advise you on how to best leverage its tax benefits for your specific company structure.

• Immigration and Relocation Support: If you are relocating employees to Limassol, we can assist with obtaining work permits and visas, ensuring a seamless transition for your team.

• Ongoing Legal Support: We will be your trusted legal partner in Cyprus, providing ongoing advice and support on regulatory compliance and any future legal needs your company may have.

Additionally, we can:

• Connect you with reputable accounting and financial service providers in Limassol.

• Facilitate introductions to key local players and business networks to strengthen your presence in the region.

• By partnering with our law firm, you gain a comprehensive and experienced team dedicated to making your Limassol headquarters a success.

Let’s schedule a consultation to discuss your specific needs and how we can tailor our services to ensure a seamless headquarters establishment in Cyprus.