With a beneficial tax system, dynamic business environment, unique landscape and thriving tourism, Cyprus ranks among the most attractive countries when it comes to company formation for international businesses, IT companies and high net worth individuals. Our colleague, Kyriakos Tramountanellis from CYAUSE Audit Services, elaborates on the advantages of the island, the juridical system, the history and values of their company and what they appreciate the most about our business community, Accace Circle.
What do you consider to be the biggest opportunities on the Cypriot market at the moment? What is the best thing about Cyprus?
Cyprus is emerging as the most favoured jurisdiction in Europe to conduct International Business. It has succeeded in differentiating itself from other financial centres, with a favourable tax system based on a wide network of very beneficial double taxation treaties.
Cyprus is a member of EU from 2004 and of the Eurozone since 2008 and at the same time it offers an advantageous tax system which combines stability, consistency in interpretation of the tax legislation and more importantly low tax rates. In 2009 the OECD included Cyprus on its “white list” as one of the 40 countries only in the world that have substantially implemented internationally agreed tax standards.
Cyprus is a respectable EU, non-offshore, non-tax heaven jurisdiction. It combines an “onshore EU identity” with “low-tax’’ advantages.
In CYAUSE Audit Services Ltd, we have teams of tax experts with profound technical knowledge and experience of taxation legislation regimes both in Cyprus and abroad, that can aid you in achieving the best possible tax strategy for your organisation. A tax strategy that minimises your tax burden while meeting all compliance requirements.
Kyriakos Tramountanellis
Founder and Managing Partner
CYAUSE Audit Services | Cyprus
Current opportunities in Cyprus
Cyprus is a great destination to work and live. Situated in the Mediterranean sea, Cyprus enjoys awarded beaches, great quality of food and an easy and comfortable lifestyle for everyone. Coupled with the strong taxation system, which aims directly at High Net Worth Individuals, Computer Engineers, and the relocation of Overseas Branches of multinational companies, Cyprus is an option hard to resist.
We summarise below some of the current opportunities and trends we witness in the republic.
High Net Worth Individuals (HNWIs)
With the requirement to only stay at least 60 days in the republic (and not more than 183 anywhere else) a HNWI can enjoy worldwide dividends from anywhere in the world. Being situated in the middle of the Mediterranean you can easily fly anywhere to and from the island. We can assure you that the 60 days will be just enough to enjoy the quality lifestyle the island has to offer with its unique landscape, mountain excursions, ancient historical monuments, and high-quality food.
In addition, the island offers strong tax benefits for companies owned by international interest shareholders and employees, who relocate from overseas. EU Trade and Banking becomes effortless as Cyprus is an active member of the European Union and the Cyprus Company is recognised and used extensively throughout the world in various group structures and trade agreements.
With 4 marinas in the process of being completed and a strong appetite for sea adventures, sailing has also become a lifestyle for some of our wealthiest clients and investors.
Information technology (IT) engineers and developers
Imagine working from your laptop at awarded restaurants or bars, enjoying the Mediterranean Sea, having short work breaks for a quick swim in the dark blue or green tranquil waters. You can also imagine waking up in the morning just before the sunset to exercise by the beach or to do a water sport such as paddling (even kite surfing, if you are the adventurous type) and then return back to your residence with beachfront view. In the unlikely event that you reside in the capital of the island, which is Nicosia, you can drive after your morning ritual for only 30 minutes back to the city to continue with your work.
Specially designed tax schemes
The above scenario is hard to beat given the low Corporation Tax Rate of 12.5% for all Cyprus Companies and the strong IP Box Tax incentives given to the sector which effectively allows for an 80% income tax exemption which in turn results in an effective Corporation Tax rate for qualified IT companies of only 2.5% on the profits.
Note: Taxable Amount 20% x Corporation Tax 12.5% = 2.5%.
This tax incentive coupled with the strong EU Legal and judicial systems make Cyprus an attractive destination for Information Technology companies and self-employed Information Technology engineers or developers.
For overseas multinationals
Cyprus is already a destination for large multinational companies from all over the world including the United States of America, Europe, and the Middle East.
The reason is simple: high quality personnel fluent in English at almost 1/3 of the cost who reside on a beautiful island which offers strong tax advantages for expats directly and indirectly as well as strong tax and financial incentives to companies who will reside in the republic and their shareholders.
Therefore, these multinationals save millions by employing the same high calibre they would recruit anyway at their country of origin, therefore their costs are significantly lower. These multinationals also enjoy lower setup and operational costs in beautiful cities with immaculate beach fronts.
Why Cyprus costs less:
- Cyprus corporate salaries and costs for setting up an office are significantly lower than other jurisdictions due to lower living costs
- Tax Incentives: There are specific tax incentives for the shareholders and the expatriate employees of these overseas companies; they can enjoy tax free dividends and up to 50% of payroll taxation costs respectively, just because they have relocated to Cyprus
Investors, promoters, capital markets
With its recent regulation changes and the appropriate legal framework to support and comply with the European Securities and Markets Authority (ESMA), Cyprus is becoming a popular choice for the establishment of Investment Firms and Funds with more than 230 active investment firms and 160 funds in the island.
The most popular characteristics that make Cyprus more attractive against its traditional competitors are primarily the following:
- Fast, Easy, Affordable
- Almost 1/3 of the cost involved in setting up the investment firm or fund
- Available highly qualified personnel to fill in all the roles required
- Available high-quality expertise in the market by service providers
- Overall, a stable and effortless environment to establish surrounded by the appropriate infrastructure to back the industry
Businessmen
Dealing with various projects or investments? Maybe in a need to have a company for trade, to receive dividends or to participate in groups? Cyprus companies have strong characteristics and the most suitable structures that have been used for several decades by thousands of business persons in need of an EU Company, with solid judicial system (for Cyprus we follow the Common Law with the EU Supreme court being the ruler).
Banking is strong and there is no requirement for a Cyprus bank to be used by your company. International banks can be used as well.
Therefore, Cyprus is currently servicing businesspeople with holding and trading structures primarily via the use of the Cyprus Company limited by shares as well as the establishment of Cyprus Investment Firms (CIFs) and Cyprus Funds.
What are the strengths of your organization? What do your customers value most about your cooperation?
CYAUSE Audit Services comprises of a dynamic team of Auditors, Accountants and Tax Experts servicing High Net Worth Individuals and International Interest Companies from all over the world for more than a decade.
Long, diverse expertise
With over 25 years of experience in the taxation, audit and assurance field our firm is equipped with in-depth knowledge and experience to assist you in all your needs. Whether an International Business Company belonging to a multi-jurisdiction group or a local trading company, we have seen it all before and can really assist you with the complexities of each industry and set up.
Our founder Mr Kyriakos Tramountanellis has been working in London in the United Kingdom for more than a decade servicing local and international groups.
Our clientele basis comprises mainly of international business companies incorporated in various jurisdictions across the world satisfying different tax and operational needs.
Our firm, CYAUSE Audit Services Ltd is accredited by the ACCA, Accounting Audit and Assurance firm with offices in Nicosia and Limassol in Cyprus. Our core focus is on International Tax Planning Engagements, Company Incorporations, Accounting, Audit and Assurance Engagements.
During 2015 we have been awarded by ACCA as fully compliant with the ACCA policies and procedures. In Cyprus, only 10% of the audit firms achieve such a distinction. We would like to consider ourselves proactive and technologically advanced providing software and business solutions to our clients which make them more efficient and in effect more profitable.
To serve our clientele better, we have created a Tax Mobile App called “Cyprus Audit & Tax” which aims to add value on the day to day activities of our clients.
Our approach
Our focus is to keep our clients happy by being efficient and knowledgeable. Our day to day interaction and communication with our clients distinguishes us from the crowd as we are close to our clients. We know their needs, we advise and we monitor execution. Some of our clients have referred to us as “technology savvy” others as “wired accountants” and some as an “integrated part of their organisation”. Whichever is correct, we continuously try to grow internally and share with our clients with our expertise and knowledge so that we grow together. It is not wonder that since our establishment in 2011 our strategy for growth has been “client referral” which has been working very well with year on year significant growth.
Why you should choose our firm
- Local Presence, Global Reach
- Licensed by the Institute of Chartered Accountants in England & Wales
- Licensed by the Institute of Chartered Certified Accountants
- Licensed by the Institute of Certified Public Accountants in Cyprus
- Awarded by the ACCA for Quality of Services
- Accredited Employer by the ICAEW and ACCA
- Currently servicing more than 200 companies globally
Why did you join Accace Circle? What makes the community different from other associations?
We always wanted to participate in an active and engaging community. A community that brings value to its members besides just the business referrals. Accace Circle does it all. With the monthly check-in meetings, presentations by various group members and frequent communication we feel that our horizon has expanded further and now we are the members of a truly global community. This means that accounting, payroll and taxation assistance and verification of principals (for our international tax planning) has been strengthened and enriched significantly, as they further complete the service lines we offer as a one-stop-shop.
The Accace Circle team is characterized by a spirit of well-intended cooperation which aims to create robust relationships between our community and exposure to larger opportunities.
