Why did we setup a Cyprus company?
There are many potential benefits of relocating your business to Cyprus. My wife and I took this decision in 2021 and relocated our IT company to the island. Our core reasons for doing this were:
- We were paying too much tax in the UK, both personally in income tax, on our company dividends and via my company (e.g. Corporation Tax).
- We could operate our business from anywhere, the concept of being a digital nomad wasn’t assumed, it was based upon the way that we had set up the operational side of the business.
- Our clients didn’t care about our physical location as our services are all online.
- We wanted a change in lifestyle and work / life balance.
So, what are the general benefits of operating a business in Cyprus?
Favourable tax regime
Corporate tax in Cyprus is relatively low (15%) compared to many EU countries, which makes the island attractive for businesses.
There are additional tax incentives: for example, favourable treatment of dividends (0% taxation for Directors dividends), sales of shares (0% taxation on profits of sale), interest income, capital gains in many cases (subject to conditions).
Strong network of double tax treaties (Cyprus has agreements with many countries) which helps in international business structuring.
Note – in our case, my wife and I saved £80,000 a year in tax (including standard income tax and tax on our dividends).
EU membership & access to European market
As an EU Member State, Cyprus gives you access to the single market (free movement of goods, services, capital) for operations in Europe.
Legal structure based on familiar frameworks (for many international businesses) makes it easier to integrate into the EU business ecosystem.
Strategic geographic location & infrastructure
Cyprus lies at the junction of Europe, the Middle East and North Africa — useful for companies that operate or plan to operate internationally.
It has developed infrastructure, multilingual workforce, service-centres, and is increasingly used as a hub for international operations.
Note – many organisations are now looking at Cyprus instead of Dubai as a more stable choice for their business operations with the same or better tax benefits.
Business-friendly environment & ease of setting up
Procedures for company incorporation, relocation’s and foreign-investment are relatively streamlined and supportive in Cyprus.
Skilled workforce, many professionals speak English, legal system is investor-friendly — helpful especially when relocating operations or establishing headquarters.
Note – We can set up your Cyprus business and guide you through the whole process including obtaining Non-dom status by either 180 or 60 day rule.
Quality of life / employee attraction
For business owners and employees relocating, Cyprus offers a high quality of life: Mediterranean climate, attractive environment, relatively good living standards.
This can help in attracting talent, retaining employees, and in overall employee satisfaction.
Important Considerations / Caveats
Despite the advantages, relocating a business is not just about tax or geography — you’ll need to assess how your business model, clients, supply chains, staffing, and regulatory obligations align with Cyprus.
While taxes are favourable, international tax authorities and rules on substance, transfer pricing and BEPS (Base Erosion & Profit Shifting) are increasingly strict — you’ll need solid legal and tax advice (We can provide this).
Relocation will involve operational transition costs, potential regulatory/licensing changes, cultural / language / local market differences.
The benefit of the Cyprus regime depends on how you structure your business (what activities are done locally, what is centralised abroad, where the real economic substance is).
Some niche markets or certain industries may face local regulatory or licensing issues that need special handling.
Commercial Properties
We can help our clients find their new office or other form of commercial premises. Rents are quite reasonable and these types of properties frequently come up for sale.
How to set up a business in Cyprus?
We provide a business establishment service, including all of the legal requirements to set up a legal entity, including providing the company documentation for the relevant Cypriot authorities.
Get in touch to find out more.
