Cyprus is a very attractive place for investors, which, in turn, is favourable for the development of startups.
Various tax benefits and financing opportunities are provided for startups. In this publication, we will talk about some of the advantages of developing a startup in Cyprus.
Cyprus startup visa
The Cyprus Startup Visa scheme allows talented entrepreneurs from third countries [outside the European Union (EU) and outside the European Economic Area (EEA)], individuals or a team, to enter, reside and work in Cyprus in order to create/operate/develop a startup with high growth potential. The scheme is valid from June 1, 2022 to May 31, 2024.
Tax benefits
- Cyprus maintains double taxation treaties with 64 countries worldwide;
- The corp. income tax in Cyprus is 12.5% and this percentage can be reduced thanks to special regimes. For example, IP-box, preferential taxation of intellectual property, allows you to reduce the effective tax rate to 2.5%;
- A non-Cypriot individual moving to Cyprus to create their startup is exempt from tax on both dividend and interest income, although they will still be subject to income tax on any income earned from their work in Cyprus;
- After the introduction of the new share capital, a Cyprus tax resident company has the right to claim a conditional interest deduction (NID) as non-taxable expenses. The deduction is provided on an annual basis and can amount to up to 80% of the taxable profit received from the new share capital;
- Investors in innovative start-up companies (which have been certified as such by the Ministry of Finance of Cyprus) can enjoy tax exemption in the amount of up to 50% of their annual taxable income in Cyprus.
Intellectual property
In addition to the tax benefits offered to Cypriot companies that produce intellectual property and profit from it, such assets owned by Cypriot companies can be protected and registered in Cyprus in national registries, the EU, as well as in international registries.
Low costs of doing business
The costs associated with the creation and operation of a Cyprus startup are significantly lower than in other major European countries. These costs include average hourly wages, technical and professional talent costs, office rental rates, and essential business support services such as legal and accounting services.
If you require any further information, feel free to contact us at [email protected] or by tel: +357 25 820 640.
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