business strategy

  • Cyprus: A tax-efficient EU Intellectual Property Location

    Cyprus is a tax-efficient EU Intellectual Property location. It offers full international protection for IP assets and significant financial benefits.

    Choosing the right location for the centralization and management of IP is a very important strategic business decision.  Cyprus could be the ideal location to safeguard and protect an organisation’s IP and contribute to its tax optimization. Cyprus IP legislation is applied in line with the OECD's guidance and reviewed and assessed according to the EU Code of Conduct.

    Cyprus Intellectual Property (IP) Regime - Main Benefits

    Cyprus IP Box Regime protects the IP but also economic-tax benefits.

    Tax benefits of Cyprus IP companies

    • 80% of worldwide royalty income generated from IP owned by Cypriot resident companies (net of any direct expenses*) is exempt from income tax.
    • 80% of profit generated from the disposal of IP owned by Cypriot resident companies (net of any direct expenses*) is exempt from income tax.
    • any expenditure of a capital nature for the acquisition or development of IP is claimed as a tax deduction in the year in which it was incurred and the immediate four following years on a straight-line
    • All the above exemptions are also available for IPs acquired or developed before January 2012.

    Cyprus’ wide double tax treaty network and access to the EU Interest and Royalty Directive serve as additional means for the group to achieve tax optimization when it comes to IP exploitation through Cyprus.

    Other Benefits of Cyprus IP Companies

    Resting on a sound legal system based on Common Law principles and being a signatory to International Conventions on the Protection of Intellectual Property, Cyprus’s IP tax regime is considered the most favourable in Europe, affording the maximum protection, stability, and assurance for IP owners.

    The IP regime has been reviewed by the EU Code of Conduct and has been assessed as fully compatible with EU standards

    Reasons to Protect Your Organisations Intellectual Property (IP)

    Protecting your IP is a must in the digital age. It is the only legal way to avoid having your unique ideas, products, or services copied or used without permission.

    • Intellectual Property (“IP”) can be one of the most valuable assets of an organization, which may be sold or used for other commercial purposes for a fee.
    • By granting a patent, you acquire exclusive rights to use and exploit your invention.

    A patent is granted by the Intellectual Property Section https://www.intellectualproperty.gov.cy/en/

    Qualified IP Assets

    Eligible IP assets shall include a wide range of intangibles including: CopyrightsPatented inventions, Trademarks.

    How P. Kalopetrides & Co. can assist you?

    • Cyprus IP holding structures and initial set-up
    • Corporate statutory compliance matters
    • Existing IP – tax efficient transfer to Cyprus IP company
    • Eligibility of tax depreciation
    • IP-related substance
    • Ongoing corproate and statutory complianace matters.

    P.Kalopetrides & Co.

    Contact us to find out how to protect your assets.

    Book a preliminary teleconference consultancy meeting.

    Contact us by email: This email address is being protected from spambots. You need JavaScript enabled to view it. or Tel: +357 22 669017

  • Post-COVID19: Relocation, Investment Strategies and Opportunities

    The economy worldwide, following the pandemic of COVID-19, has major issues to face.

    Likewise, the Investors and Shareholders need to re-assess and re-set their strategies. Part of such re-assessment can be the issue of relocation of head-quarters or part of their company or group functions. Such decision may result in serious tax savings.

    Evaluation of Issues in the decision of Relocation

    Re-location is a major issue. Below the main questions are pin-pointed to assist in the decision if re-location is appropriate and beneficial for a company and consequently which jurisdiction is the most suitable:

    • What are the major financial difficulties the company/ group is currently facing after the pandemic?
    • How the company/ group is responding to the current financial difficulties?
    • Will a re-location assist in eliminating such negative consequences?
    • Will this fall in the immediate but also in the long run strategies of the company/ group?
    • Which jurisdictions may provide the best suitable solution for re-location?
    • What other investment opportunities a jurisdiction provides?
    • Is it fully understandable the difference between tax haven jurisdictions to tax incentive jurisdiction?
    • Could Cyprus be the best suitable solution for re-location?

    It goes without saying, that the assessment process and the decision should be based on high legal and ethical standards.

    What is the difference between tax haven and tax incentive jurisdiction?

    Tax heaven jurisdiction is considered any country that offers minimum or no tax obligations to foreign investors and individuals.

    A tax haven is generally an offshore country that offers foreign individuals and businesses little or no tax liability. Tax havens also share limited or no financial information with foreign tax authorities. The lack of transparency and of reporting systems result to reputational risks. The international authorities scrutinize activities through such jurisdictions by established alert and notification systems.

    Tax incentive jurisdiction, Cyprus is considered to be one of the countries with decent tax on profits. Tax resident corporations and individuals are established if they pass the substance test and they need to obey to legal and reporting statutory obligations as foreseen by law.

    A tax incentive county offers effective tax burden and has on place an exchange of information with other national tax authorities. By such Companies/ Groups enjoy a good reputation and smooth running of operations.

    Why Cyprus is considered an attractive tax incentive jurisdiction?

    Cyprus is a transparent EU country with a harmonized tax system following recommended OECD practices. It is a well-established and renowned financial and business incentives centre. Cyprus offers the opportunity that Investors/ Shareholders are looking for to create value. It processes all quantitative and quantitative characteristics offering a steady tax environment making it attractive to businesses and investors for over four decades now.

    • Legal system based on English law and well versed in international commercial law
    • High value telecommunications and logistics services
    • Culture and government sympathetic to investors an non-residents
    • Good working conditions
    • Safe and good quality life

    Key Features of Cyprus Tax Incentives

    During the past few years Cyprus extended the tax incentives that would provide companies and their shareholders, benefits from investing into Cyprus companies (Cyprus company formation https://www.pkalopetrides.com.cy/index.php/cyprus-companies) and relocate their activities in the country:

    • Enjoys the tax benefits of EU Directives (Parent – Subsidiary Directive and Interest and Royalties Directive).
    • Extensive double tax treaties network with 65 countries.
    • Corporate tax rate of 12,5%, one of the lowest within the EU with possibility to enjoy a much lower effective tax rate.
    • Availability of a National Interest Deduction for companies receiving new equity funding. The tax deduction can reach up to 80% of the taxable income produced by employing the new equity funding.
    • IP Box regime based on the nexus approach which allows 80% deemed deduction on qualifying profits from the business use of IP.
    • Attractive Tonnage Tax (TT) regime to ship owners, managers and charters.
    • NO Taxation on Dividends received, capital gains on shares, net asset value of a fund.
    • Profits of a foreign Permanent Establishment exempt from tax.
    • Most international transactions free of VAT.
    • Unilateral credit relief for foreign taxes.
    • Carry forward of tax losses for five years.
    • Tax incentives for expatriate employees taking up employment in Cyprus (up to 50% of employment income for individuals earning more than €100k per annum).
    • Dividend income and interest income exempt from tax for non-domiciled individuals taking up tax residency in Cyprus.
    • Possibility to obtain Cyprus tax residency by spending only 60-days in Cyprus (subject to conditions).
    • No immovable property tax.
    • No inheritance tax.

    You can also refer to: https://www.pkalopetrides.com.cy/index.php/tax-in-cyprus

    Investment Opportunities in Cyprus Post-COVID-19

    The major opportunities Cyprus is offering for investment nowadays are listed below:

    • A reduction of specific immovable properties that might reach 50% reduction that can give up to 6% annual return if rented in the short term or sold at a higher price in the medium - long term.
    • Cyprus is well positioned to support Businesses/ Investors on capitalizing in above mentioned opportunities.
    • Possibility to obtain Cyprus tax residency by spending only 60-days in Cyprus (subject to conditions).
    • Possibility of gaining Cyprus Citizenship. Non – EU citizens may apply for the acquisition of the Cypriot citizenship through the Cyprus Investment Programme, if they meet the economic criteria of the Programme. Obtaining a Cyprus citizenship means free movement, residency and access to employment and education within the European Union: https://www.pkalopetrides.com.cy/index.php/immigration-cyprus

    Next Step

    Book a Complimentary Preliminary Teleconference Consultation Meeting now! Contact us by email (This email address is being protected from spambots. You need JavaScript enabled to view it.) or Telephone (+357 22669017) for arrangements.

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2 Christ. Sozos Str. Eiffel Tower, 1096 Nicosia, Cyprus
P.O.Box 21855, 1514 Nicosia, Cyprus

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Limassol / Lemesos
Paphos / Pafos