Why did Cyprus manage to attract foreign tech giants?

In this blog post, CX Financia’s team of experts provides information about relocating to Cyprus and more specifically:

  • Why choose to headquarter in Cyprus?
  • New Immigration Framework for Tech companies
  • Major foreign companies with regional & global headquarters in Cyprus

If you are thinking of headquartering in Cyprus and setting up a business, let’s discover all the benefits of such a decision.

Why choose to headquarter in Cyprus?

The team at CX Financia researched about the top reasons someone would choose to relocate for business, and the results we got are the following:

The location of the island

  • Strategically located at the crossroads of three continents
  • Offers access to developed markets in the Middle East and Europe
  • Established as a popular destination for ex-pats, business professionals and retirees.

The competitive business environment (with a robust legal framework and highly skilled local workforce)

There are also lower operating costs in Cyprus, including the following:

  • Setting up and maintenance costs of a Cyprus company are reasonable.
  • The cost for technical and professional support in Cyprus is lower than in other EU countries.
  • Very affordable office rentals.

The advantageous Tax Regime

  • There is a 12,5% corporation tax on net profits
  • There is no withholding tax on dividends and interest payments abroad
  • Cyprus IP regime is as low as 2,5%
  • Double Tax Treaties network are listing currently 65 countries;
  • No tax on foreign exchange gains;
  • No withholding tax on royalty payments abroad
  • Foreign Tax Relief available

Personal Tax

  • Personal tax exemptions for new residents and non-domiciled individuals
  • Special income tax incentives (50% tax exemption) to all newcomers executives with an annual salary of at least €100.000
  • The first 19.500 is not taxable
  • Non-domiciled tax residents benefit from the non-domiciled regime. They don’t need to pay tax on dividends, interest, or rental income earned abroad for 17 years and the Cyprus 60 days tax residency scheme.
  • Investments in innovative small businesses can be deducted from taxable income (annual limit up to 150K)

Note: Cyprus is framing a holistic policy concerning technology companies, including additional incentives for ICT companies and their workers.

New Immigration Framework for Tech companies

In 2020 Cyprus had introduced a new set of incentives relating to the immigration rules in place for technology companies wishing to establish a presence in Cyprus.

Each company has the right to employ up to 15 third-country nationals as directors and middle management executives. It is further entitled to employ any number of qualified third-country nationals who possess wanted ICT skills.

The maximum number of third-country nationals employed under this New Immigration Framework for Tech companies is based on their annual turnover.

Companies with an annual turnover of more than €30mn fall under a special category that allows for relocating up to 200 non-European specialists with a simplified procedure, granting working permits within six weeks.

Find out more information about our services for Visas & Work permits here.

The key benefits for companies with regards to third-country nationals are the following:

  • No restrictions on the maximum duration of stay;
  • No requirement for a sealed employment contract from the Department of Labour;
  • The right to family reunification with the employee’s spouse and minor children;
  • A visa entry may be converted to a temporary residence. An employment permit may be issued after arrival in Cyprus.
  • The Fast Track Mechanism for Licensing & Immigration for non-EU nationals

There are also additional incentives such as funding programs for newly formed tech companies but also other companies as well, which include funding incentives and employment programs:

Foreign companies with regional and global headquarters in Cyprus

Our team carried out a research and found the major foreign companies, that have regional but also global headquarters in Cyprus. The results are the following (not in any specific order):

  • NCR – a world leader in consumer transaction solutions;
  • Amdocs – a leading multinational software and services provider;
  • Wargaming – a world-renowned video game developer;
  • Viber – online communications platform;
  • Sykes – a US multinational business process outsourcing provider;
  • Thomson Reuters – provider of business information services;
  • Nielsen – global marketing research firm;
  • 3CX – business communication solutions;
  • eToro – trading and investing platform;
  • VTTI -energy storage providers
  • MUFG – first tier 1 bank in Cyprus
  • Murex -French Software development announced plans to add a physical presence in Cyprus.

Interested in finding out more on this topic? You can read our following articles below:

How can CX Financia help you?

Find out more about our Company Formation services here, and get in touch with us for a free complimentary consultation on how you can materialise your business plans and ideas.

Our team of experts can guide you towards finding the best solution, tailored to the specific needs of your company.

 

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