Business Environment
Cyprus has an open, free-market, service-based economy with two main pillars: Services and Tourism. Towards this direction, the government’s economic policy is aimed at promoting and maintaining favourable investment conditions and supporting private initiatives. The investment and business liberalization has led to a growing awareness among foreign corporations and individuals of the particular advantages of using Cyprus as a business base for both inward and outward investment.
Cyprus has 19 bilateral treaties for the encouragement and reciprocal protection of investments and more are under negotiation. The purpose of the treaties is to create and maintain favorable conditions for investments made by nationals of one treaty state in the other for their mutual benefit on a long-term basis, to guarantee the protection of such investments (including the repatriation of profits) and to establish procedures for settling any disputes that may arise.
Taxation
The tax reform that is in effect since 1 January 2003 has brought major changes to the Cypriot taxation system. The VAT rate was set at 19% (the lowest rate in Europe) and the old, complex tax regime was replaced by a new regime that eliminates discrimination and differential treatment between different categories of business and is simple and transparent. There is no distinction between local and international companies and the corporate tax rate is now uniform and only 12.5%.
Exchange control
With the abolition of exchange controls on 1 May 2004 both residents and non-residents, whether individuals or corporate bodies, may hold and manage assets and liabilities in any currency and in any country, including freely convertible and transferable balances with banks on the island. There is no distinction between nationals of Cyprus, nationals of other EU member states or third country nationals.
Immigration
Visa obligations for foreign nationals are in line with EU obligations. Cyprus is a signatory to the Schengen agreement and 2008 has been set as the target date for implementation.
Work permits
Citizens of EU member states may work in Cyprus. If they are employed, they must obtain residence permits, to which they are entitled as of right. Nationals of other countries wishing to work in Cyprus require employment permits.
Cyprus has an open, free-market, service-based economy with two main pillars: Services and Tourism. Towards this direction, the government’s economic policy is aimed at promoting and maintaining favourable investment conditions and supporting private initiatives. The investment and business liberalization has led to a growing awareness among foreign corporations and individuals of the particular advantages of using Cyprus as a business base for both inward and outward investment.
Cyprus has 19 bilateral treaties for the encouragement and reciprocal protection of investments and more are under negotiation. The purpose of the treaties is to create and maintain favorable conditions for investments made by nationals of one treaty state in the other for their mutual benefit on a long-term basis, to guarantee the protection of such investments (including the repatriation of profits) and to establish procedures for settling any disputes that may arise.
Taxation
The tax reform that is in effect since 1 January 2003 has brought major changes to the Cypriot taxation system. The VAT rate was set at 19% (the lowest rate in Europe) and the old, complex tax regime was replaced by a new regime that eliminates discrimination and differential treatment between different categories of business and is simple and transparent. There is no distinction between local and international companies and the corporate tax rate is now uniform and only 12.5%.
Exchange control
With the abolition of exchange controls on 1 May 2004 both residents and non-residents, whether individuals or corporate bodies, may hold and manage assets and liabilities in any currency and in any country, including freely convertible and transferable balances with banks on the island. There is no distinction between nationals of Cyprus, nationals of other EU member states or third country nationals.
Immigration
Visa obligations for foreign nationals are in line with EU obligations. Cyprus is a signatory to the Schengen agreement and 2008 has been set as the target date for implementation.
Work permits
Citizens of EU member states may work in Cyprus. If they are employed, they must obtain residence permits, to which they are entitled as of right. Nationals of other countries wishing to work in Cyprus require employment permits.