This article describes some of the key commercial factors that are relevant on setting up a business in Cyprus.
Cyprus, with a business friendly environment, is strategically located between Europe, Middle East, Africa and Asia at the crossroads of global economy.
As a member of the European Union with a modern telecommunications network and tested infrastructure, Cyprus is a gateway to the world of international business.
The last two decades have witnessed Cyprus’ gradual transformation into a reputable international business and financial centre.
Its attractiveness as a business and investment location is based on the following additional reasons:
- Democratic country with stable business environment, based on the free market philosophy
- Favourable tax policy, including a wide network of agreements for avoidance of double taxation
- Corporation tax rate is 12.5%
- Highly skilled, educated and flexible workforce well acquainted with the use of modern technology. Competitive level of wages and other costs
- Compliance with the European Union Code of Conduct for Business Taxation and with the commitment to the elimination of harmful tax practices according to OECD regulations
- Uncomplicated administrative procedures
- Well developed commercial infrastructure
- Easy access to international markets
- Lowest crime rates in Europe
- Well developed market of professional service
- Competitive banking system
POPULATION, LANGUAGES AND CURRENCY
The island has a population of approximately 1,061,840 of which 75% are Greek Cypriots and 25% are Turkish Cypriots. Nicosia, the capital, is home to approximately one third of the population and is the business and administrative centre of the island. Limassol, the second largest city, is the island’s principal port, industrial and commercial centre and an important tourist resort. Larnaca and Paphos are also important tourist resorts and possess international airports. The official languages are Greek and Turkish but almost everyone speaks English as a second language. English is also widely used in commerce and government.
The unit of currency is the EURO.
POLITICAL AND LEGAL SYSTEMS
Cyprus is an independent and sovereign republic with a presidential system of government, which is modelled on western democratic systems. Executive power is vested in the President, who is also the Head of State. The President is directly elected for a five-year term of office and is eligible for reelection. The President appoints the Council of Ministers, the main executive instru¬ment of the Republic. Legislative power lies with the House of Representatives, composed of fifty-nine elected members holding office for five years. The democratic multi-party system is based on proportional representation. The legal system is based on the same principles applicable in the United Kingdom and all statutes regulating business matters and procedures are essentially based on English Law. Cyprus company law is almost identical with the British Companies Act 1948. The judicial power of the Republic is exercised by the Judiciary, which is a separate and independent body.
Cyprus has become a full member of the European Union since 1 May 2004 and of the Eurozone as of 1 January 2008. It is also a member of the United Nations, the Commonwealth and the Council of Europe. Cyprus has diplomatic relations with a very large number of countries and is a signatory to a large number of international conventions, including forty-four treaties for the avoidance of double taxation.
For more information please download our TAX FACTS leaflet.