Aug 17, 2014
Invest in Cyprus
1. International quality business center
- Cyprus has ranked among the High Potential and High Performers for Foreign Direct Investment (FDI) growth among 2007-2010, by United Nations Conference on Trade and Development.
- In 2014, Cyprus has ranked 39th out of 189 Economies by the World Bank’s Doing Business Report.
2. An Inward Direct Investment center
- Sources such as Russian Federation, Greece, the British Virgin Islands, United States and last the United Kingdom.
3. Minimum Investment restrictions
- Up to 100% equity participation in most sectors of the economy in any Cypriot enterprise and without any requirement for a minimum investment.
- Direct registration with the Registrar of Companies.
- Ease of obtaining any license from the appropriate authority depending on the nature of investment.
Only certain restriction can arise both for EU and non EU investors in sectors such as banking, tourism and real estate. However each investment proposal is examined and deliberated on its virtues.
4. Citizenship – Promoting FDI in Cyprus
- Non- EU residents can secure a permanent residency permit with the purchase of a private house.
- Moreover, through Direct Investments such Governmental bonds purchases, shares in Cypriot companies, acquisition of Cyprus Businesses, Real Estate Investments, land development schemes and participation in common projects for the executions of government projects.
However, citizenship holders can become tax residents only if they spend 183 days in one calendar year within Cyprus.
5. Shipping Sector
Cyprus is the only EU-approved open registry where non-Cypriot nationals can register a ship and enjoy the range of benefits of the competitive Cyprus flag. The upheld advantages of Cyprus’ shipping legislation and the favorable taxation, the endorsed international conventions and the general framework of shipping industry have attracted many of the world’s most influential names in shipping to base themselves on the island.
New Yacht scheme
- The lowest VAT rate of 3.4% – on yacht purchases via a leasing scheme.
6. Favorable Tax exemptions and protections
Cyprus Tax Legislation is commonly being updated and expanded in order to upsurge the island’s competitiveness as a center of inward investment. For example:
- The majority of international transactions are exempted from taxation.
- 80% of intellectual property income from taxation and a financing scheme is exempted.
- 12.5% corporate Tax rate, one of the most competitive in the EU.
- No withholding tax on dividends for non-resident companies
- Low Income and Labour taxes
- 50 Double Taxation Treaties (DTTs) network. Approximately, in this way 270.000 companies have Cyprus their made home.
The protection framework of FDI in Cyprus is widely defined by Bilateral Investment Agreements (BITs) and Multilateral Investment Agreements (MITs). These agreements aim in establishing the terms and conditions for private investment by nationals and companies between states and to form a fair treatment for investors. Cyprus has signed both BITs and MITs with a number of countries.
BITs contain provisions on the free and undistorted transfer of capital, the legal security for property rights, as well as the guaranty of non-discrimination standards to foreign investors. Bilateral Investment Agreements also include the obligation not to expropriate without immediate, effective and full compensation. The provision of dispute settlement mechanisms in the form of arbitration provides the investors with the option to file a claim against the host state, thus circumventing national courts.
Protection is also afforded by international investment law. The safeguards relating to the protection of foreign investment and proprietary rights include the prohibition of confiscatory taxation, the obligation of non-discrimination, the standard of treatment of foreign investors, the principles of natural justice and the observance of fundamental human rights and the doctrine of abuse of rights. Cyprus has adopted and embodied in the Cyprus Constitution and in the domestic legislation the principles of international investment law.
Additionally, the Republic of Cyprus has signed the International Center of Settlement of Investment Disputes (ICSID) Convention, which is a self-contained system deriving authority from its status as a World Bank’s institution and provides resolution of disputes through conciliation or arbitration procedures. ICSID was established under the ICSID Convention of 1966 which Cyprus has signed and ratified. ICSID is an impartial international forum providing facilities for the resolution of legal disputes between eligible parties through conciliation or arbitration procedures. ICSID can be utilized for the resolution of any investment dispute arising from an investment made by a national of a contracting state in the territory of another contracting state.
Cyprus is also a signatory to the Convention Establishing the Multilateral Investment Guarantee Agency (MIGA Convention), an autonomous international financial organization. MIGA provides non-commercial insurance cover for cross-border investments into developing countries. MIGA”s guarantees protect investors against the risks of transfer restriction, expropriation, war and civil disturbance, breach of contract and non-honoring of financial obligations. Most sectors are eligible for MIGA guarantees, including, but not limited to financial, infrastructure, oil and gas, mining, telecommunications, services, agribusiness and manufacturing.
8. Hydrocarbons sector
Interesting is the fact that Foreign Investors are becoming more and more interested in the energy in Cyprus both in the oil and gas sector and the renewable markets. Is a big potential for investment for the upcoming years, which will push the foreign investment sector in Cyprus.
To sum up, Investment opportunities in large-scale projects such as the development of luxury marinas, golf open-air courses, casinos and multi-use super luxurious residential complexes have been also attracting vital interest from abroad. Key to a successful investment is the current economic climate which stimulates foreign land brokers and property buyers to invest as attractive prices exist.
For more information and/or advice, please contact us via email at [email protected]