• Overview

One of the most well-known facts is that European countries’ corporate tax is often very high, which negatively impacts companies, but this is not the case when it comes to Cyprus.

Cyprus offers one of the lowest corporate taxes in the European Union, making it one of the best destinations to incorporate in.


  • Explanation

With a corporate tax of as low as 12.5% and being a member of the European Union, it makes it a very attractive jurisdiction for investors and businesses aiming to operate in Cyprus.

Small, medium-sized, and large enterprises can use all the benefits of tax planning and legal methods to reduce the amount they pay in taxes.

Besides, all European regulations are applicable in Cyprus and are part of Cypriot tax law.

Cyprus has signed over 50 double taxation agreements with countries worldwide. Not to mention that non-residents are not subject to delaying tax payments for dividends, interest, and royalties.

A business or company shall be considered a tax resident of Cyprus if its management and control are exercised from Cyprus’s territory.

All companies considered Cypriot tax residents would have to pay the corporate tax in Cyprus of 12.5%.


  • Examples

Suppose you want to incorporate your company within a European Country to have a presence in the EU. In that case, Cyprus is one of the best options. Now interpreting the information mentioned above about being a tax resident, we can understand the following:

If you are managing your business within Cyprus and conducting your work, there then for sure you will be considered as a Cypriot resident and will therefore be entitled to pay tax.

If you just incorporated your business there and, in practice, you are operating in another country, then relying on the double taxation agreements that Cyprus has signed and that constitute a tie-breaker, you don’t have to be tax residents since you are not operating there.


  • Why is it needed?

Such information is very important that each person willing to incorporate to know since you can incorporate in a country that offers all the benefits needed to conduct your business and managed to pay low tax rates as 12.5% in Europe.


  • How can a lawyer help?

But as good as this sounds, sometimes, depending on your business’s nature, Cyprus may not be the best solution even with all the perks it provides.

For this reason, if you want to start your business and think of Cyprus as an option, we are here for you. Just visit lexyom.com and book an online consultation with a lawyer. We will advise you on what suits your case.