Cyprus offers an ideal location to establish a company for general trading, a number of those are described below:
As a member of the European Union add credibility to establish trading affairs in global economy
Corporate tax stands at 12.5% net of any expenses
Director's salary located abroad are excluded from social insurance and income tax purpose.
There is no need to obtain a certain license from any government authorities for trading products or providing services to clients.
Taking advantages of EU VAT system by issue invoice to client at zero VAT amount and reclaim any VAT paid to any EU country As a member of the European Union the company has more acceptable access to EU member states compared to companies based outside EU
Use transfer pricing model to intragroup transaction and lower your tax bill as a whole
There is no withholding tax on dividends paid abroad, nor capital gain tax on the sale of shares.
Example of VAT application
Services received from abroad (outside Cyprus) are subject to reverse charge mechanics of EU VAT. Although the Company is not obliged to pay any VAT amount to Inland Revenue, it has an obligation to register and submit VAT declaration.
Services provided to customers outside EU are normally exempt from VAT tax (i.e. outside the scope)
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.