Sergey Kartashov (Sergejs Kartasovs), the CEO of Generation Partners, talked about the benefits of doing business in Cyprus, especially in the field of information technology. Cyprus is one of the most attractive places in the world for companies that want to relocate their business. Generation Partners is a Cyprus-based asset management company. It deals with making investments in promising IT projects. As it is based in Cyprus, it knows the local jurisdiction very well.
Cyprus provides Freedom
For doing business, Cyprus is the most promising jurisdiction in Europe. According to financial experts, Cyprus provides several benefits to investors in terms of receiving dividends and managing businesses. The registration rules are transparent and accessible on this island. It has a simplified reporting system. Last but not least, the taxation system is quite flexible here.
The island offers the lowest corporate tax rates on net income in the European Union. The businesses are required to pay only 12.5% of their net income in the corporate tax. Cyprus has made agreements with several countries to avoid double taxation. Ukraine is one of those countries. The companies based in Cyprus have to pay only 19% in value-added tax (VAT). However, there is no VAT on selling products to non-EU residents. Similarly, there is no tax on transferring dividends from a Cyprus-based company to any other foreign account or financial entity.
Cyprus and IP-Box Regime
Tax freedom in Cyprus is one of the most beneficial aspects of the island for IT businesses. The Intellectual Property Box (IP-Box) regime of Cyprus allows the companies to get reduced taxes. The companies only have to pay tax for a part of their income in Cyprus. In Cyprus, the tax on earnings is as low as 2.5% or even zero. The IP-Box is attracting IT companies to relocate to Cyprus.
New Reputation of Cyprus
The reputation of Cyprus was not good in the past as it was known as a country for offshore companies. It was reputed as a country where it was easy to launder money, hide profits from taxes, and hide beneficiaries. However, the country has significantly got rid of such a reputation. After the inclusion of Cyprus in the EU, anti-money laundering procedures have been implemented there. The Central Bank of Cyprus tracks the funds coming from foreign countries to Cypriot accounts. Sergey Kartashov (Sergejs Kartasovs) said, “This is a huge step that has made Cyprus attractive to large international companies and investors.”
Generation Partners CEO told the media that Cyprus had been receiving huge investments every year in its economy and infrastructure. He called Cyprus a “major business hub.” He advised the startups to move to the island when they had already well-formed their business. The startups must have goof initial capital to start a business in Cyprus. Sergey Kartashov explained, “To be able to hire foreign workers for your company, you need to have at least 171,000 Euros on your company’s account.”
Some Drawbacks of Investing in Cyprus
There is a difficult process of naming a company in Cyprus as compared to other countries. Here, you have to come up with a completely different name from other companies. Some businesses find it tough to open a bank account in Cyprus due to the anti-money laundering and deoffshorization procedures. Sergey Kartashov called it only a “partial issue.” The CEO of Generation Partners expressed, “In fact, this approach helps to attract large net capital to the country.” Ireland, Britain, Singapore, and Malta are also attractive countries in terms of doing business.