Are you a tech entrepreneur looking to expand your horizons and take your company to new heights? Look no further than Cyprus! As a Firm specializing, among other areas, in corporate and commercial law, we have witnessed firsthand the incredible advantages Cyprus offers to tech companies seeking a vibrant and supportive environment to thrive.
Advantages for Tech Companies relocating to Cyprus
1. Tax Benefits: Cyprus boasts one of the most favorable tax regimes in Europe, making it an attractive destination for tech businesses. Here are some key tax incentives:
a. Low Corporate Tax Rate: With a corporate tax rate of only 12.5%, Cyprus offers one of the lowest rates in the European Union, allowing companies to maximize their profits and reinvest in growth.
b. Intellectual Property Regime: Cyprus offers an attractive Intellectual Property (IP) regime, providing significant tax benefits for companies holding and exploiting IP rights. Income derived from qualifying IP assets can benefit from an 80% exemption, effectively reducing the effective tax rate to as low as 2.5%.
c. Research and Development Incentives: Companies engaged in research and development activities can benefit from various incentives, including tax credits, deductions, and grants, encouraging innovation and technological advancement.
d. Personal Tax Incentives: For individuals relocating to Cyprus, there are numerous personal tax incentives that make Cyprus an attractive destination, with some of them listed as follows:
i. Cyprus tax residents not domiciled in Cyprus are exempt from defense tax on dividend and interest income.
ii. Individuals commencing their first employment in Cyprus are eligible for a 50% employment exemption from income tax for a period of 17 years if their remuneration exceeds €55,000 per tax year. A grace period of 2 years is granted for new employees with an initial annual salary below the minimum wage of €55,000.
iii. Alternatively, individuals can benefit from a 20% employment exemption (up to a maximum of €8,550) on income tax for remuneration from employment in Cyprus for a period of 7 years, as long as their remuneration does not exceed €55,000. Note that individuals can only claim one of these two exemptions at a time.
iv. Gains arising from the disposal of non-Cypriot real estate are exempt from Capital Gains Tax.
v. Cyprus imposes no estate duty, wealth tax, gift tax, or inheritance tax, providing individuals with added financial flexibility and security.
2. Cyprus Naturalization Opportunities: In addition to its tax advantages, Cyprus offers attractive opportunities for foreign nationals seeking naturalization. Recent legislative updates have streamlined the naturalization process, making it easier for skilled professionals to become Cypriot citizens. These changes aim to attract top talent to Cyprus's growing tech sector, reinforcing its position as a global technology hub.
Special Provisions for Technology Sector Professionals: Unique provisions apply to technology sector professionals:
a. Residency Reduction: The residency requirement is reduced for highly qualified individuals with A2 or B1 level Greek language certificates.
b. Family Inclusion: Family members can apply for naturalization under the same conditions, with spouses or civil partners needing the same Greek language certificates.
c. Fast-Track Process: Highly qualified individuals benefit from a 'fast-track' process, completing within eight months for a specified fee.
These provisions are designed to streamline the naturalization process and attract top talent to Cyprus's burgeoning technology sector. With these special provisions in place, Cyprus offers unparalleled opportunities for skilled professionals and their families to establish roots and contribute to the country's vibrant tech ecosystem.
3. Strategic Location: Situated at the crossroads of Europe, Asia, and Africa, Cyprus serves as a gateway to lucrative markets around the globe. Its strategic location facilitates easy access to international markets, fostering collaboration and expansion opportunities for tech companies seeking to scale their operations globally.
4. Quality of Life: Beyond its business-friendly environment, Cyprus offers an unparalleled quality of life that attracts professionals and their families from across the world. With its breathtaking natural beauty, Mediterranean climate, and pristine beaches, Cyprus provides an idyllic setting for work-life balance. From vibrant cultural experiences to world-class healthcare and education systems, Cyprus ensures that every aspect of life is enriched and fulfilled.
5. Safety and Security: Safety is paramount, especially for families considering relocation. Cyprus is renowned for its stability and safety, offering peace of mind to residents and entrepreneurs alike. With a low crime rate, robust legal framework, and welcoming community, Cyprus provides a secure environment where families can thrive and businesses can flourish.
6. Supportive Ecosystem: Cyprus is home to a thriving ecosystem of tech startups, incubators, and accelerators, fostering innovation and collaboration within the industry. Whether you're a seasoned entrepreneur or a budding startup, Cyprus offers a supportive network of mentors, investors, and professionals who are eager to help you succeed.
In conclusion, Cyprus presents a compelling proposition for tech companies seeking to relocate and grow their business. With its advantageous tax regime, streamlined naturalization process, strategic location, unparalleled quality of life, safety, and supportive ecosystem, Cyprus is poised to become the next tech hub in the Mediterranean.
Ready to embark on your journey to success? Let's explore the endless possibilities Cyprus has to offer and elevate your tech venture to new heights!
Connect with us to learn more about relocation opportunities and how we can assist you in making Cyprus your new home for innovation and prosperity.
Andreas Hadjidemetriou
Head of Litigation Department
Partner
