Cyprus has emerged as a well-established and expanding Financial and Tech hub within the European Union, offering a strategic gateway to over 500 million EU consumers and close access to the MENA (Middle East and North Africa) region. Hosting numerous leading international tech firms, the island delivers all the essential resources for establishing headquarters, opening regional offices like back-end operations or development centers, scaling a business, or launching an innovative startup.
Registering a company in Cyprus is a rapid and straight-forward procedure that is generally completed within a few days. Cyprus Company formation includes certain procedures and undertakings prior to the registration of the company. The formation and registration may be undertaken by a law firm, and due diligence and compliance regarding the beneficial owners of the company are a mandatory part of the procedure.
When it comes to Business Relocation, Cyprus is rapidly emerging as a top choice for multinational decision-makers seeking the ideal location to establish international or regional headquarters, as well as to set up back offices, service hubs, or development centers. Benefits of locating a business in Cyprus include, geostrategic location with market access to 500M EU consumers with close proximity to MENA region, access to tech-savvy EU and international talent pool, access to a well-educated, highly skilled, multilingual workforce, revised Immigration policy for non-EU tech professionals (e.g., Digital Nomad Visa, Reduced Naturalization for non-EU nationals, free access to the labor market for spouses of highly skilled Third Country National employees earning at least a gross salary of €2,500/month), Business Facilitation Unit, attractive corporate & income tax regime, regulatory framework aligned with the EU, legal system aligned to UK Common Law, enviable lifestyle in a safe clean and healthy environment for beneficiaries and their families, low cost of doing business.
Moreover, Cyprus is an increasingly popular location for Family Offices and Trusts, offering cost-effective wealth management, strong regulatory oversight, and access to skilled professionals. With a stable political environment and one of Europe’s most attractive tax regimes, it provides ideal conditions for high-net-worth individuals. Available structures include Private Trust Companies, Companies Limited by Guarantee, Foundations, and Investment Funds.
The Cyprus International Trust is recommended for the protection of assets, international tax planning, as a means of managing succession issues and as an aid in asset management. It protects the interests of beneficiaries as the assets within a Cyprus International Trust are segregated from the settlor’s funds. The trust property may include all kinds of assets and property anywhere in the world and is subject to strict confidentiality. There is no requirement for registration of constitutional documents and financial statements of the Cyprus International Trust. It is also not subject to contest by the creditors of the settlor unless it is proven at court that the trust was set up to defraud such creditors.
Cyprus, is an attractive jurisdiction for Insurance Companies as it does for the entire financial services sector. The local insurance sector includes 33 insurance firms, while more than 500 European companies operate in Cyprus under the Freedom of Services (FOS) framework. Collectively, these entities form one of the island’s largest groups of institutional investors, managing assets exceeding €2.5 billion as of 2019.
As a trusted EU jurisdiction, Cyprus offers Electronic Money Institutions (EMIs) full passporting rights, allowing them to operate across the EEA without the need for additional licenses or physical offices in other member states. Once licensed in Cyprus, an EMI can offer cross-border services throughout the EU. Some of the Key Legal and Regulatory Requirements are that the EMI must be a legal entity incorporated and managed in Cyprus, the Headquarters must exercise effective control and be based in Cyprus, a comprehensive business plan and three-year financial forecast must be submitted with the application, a minimum initial capital of €350,000 is required, along with proof of funds for the first three years, agents must meet the Central Bank of Cyprus (CBC) registration criteria.
All the above Business investment are possible due to the Low set-up and maintenance costs, Reduced bureaucracy, Flexibility in terms of investment strategies and structuring options, Strong Corporate Governance mechanisms in place and efficient tax regime. Particularly, the Cyprus tax framework is entirely modernised and adapted to the needs of today’s companies, and both local and international. Actual facts which need to be highlighted are:
| · One of the lowest corporate tax rates in the EU at 12.5%. | · Capital gains tax exemption (except for real estate situated in Cyprus). |
| · Growing Double Tax Treaty network with more than 65 countries. | · No immovable property tax (unless owned a property before 2017). |
| · Competitive Intellectual Property regime with an effective tax rate as low as 2.5%. | · Income tax incentives for individuals relocating to Cyprus. |
| · No tax on gains from disposal of titles. | · Personal tax exemptions for new residents and non-domiciled individuals. |
| · No tax on foreign exchange gains. | · No succession or inheritance taxes. |
| · Notional interest deduction for equity investment into Cypriot companies. | · Capital gains tax exemption (except for real estate situated in Cyprus). |
| · No withholding tax on outgoing dividend, interest, or royalty payments.
· Tax deductions for investment into start-ups. |
· Dividend and interest income– exempt for 17 years (e.g., tax exemption of 50% for new non domiciled employees with employment remuneration of ≥ €55.000). |
When it comes to Employment & Human Capital, Cyprus has the youngest workforce in the EU, with 58% of people aged 30–34 holding higher education degrees. The country offers quality English-speaking schools, as well as French, Arabic, and Russian options, and its internationally recognized universities rank globally, focusing on STEM and ICT programs taught in English. Many Cypriots study at top institutions abroad and gain valuable international experience, making them highly attractive to global employers. With its appealing lifestyle and climate, Cyprus is a preferred relocation destination for European talent, and it can easily expand its skilled workforce without visa barriers for EU citizens.
As to the Regulatory Framework and Legal System, Cyprus offers a transparent legal system based on English Common Law, making it a reliable base for international business. It has a Business-friendly legislation which takes into consideration continuously changing market realities and conditions. Positioned between Europe, Asia, and Africa, it is supported by expert professionals and a strong financial services network. Recent immigration reforms also simplify hiring skilled talent from outside the EU.
In conclusion, the continued growth of Cyprus’s fund industry reflects its strategic importance within the EU investment landscape and its broader economic impact on the country. With assets under management reaching €9.4 billion AuM of UCIs, the sector demonstrates strong momentum. A remarkable 363% growth since 2016 underscores Cyprus’s emergence as a credible and attractive jurisdiction for investment funds, backed by a robust regulatory framework and a commitment to sustainable development.
