About Cyprus

Cyprus is situated in the eastern Mediterranean at the cross-roads of three continents - Europe, Asia and Africa. It covers an area of 9251 sq. km. Its climate is warm with about 340 sunny days a year and a light rainy season between November and March. The population is estimated at 800.000 and the capital is Nicosia.

The official languages are Greek, Turkish and English, with the latter being widely spoken by most of the population and in commercial and government sectors as well. The island is served by two international airports, the main one in Larnaka and the second in Pafos, with more than 1.000 scheduled flights to and from Europe, Africa and the Middle East each week.

An independent republic since 1960, Cyprus has a relatively high standard of living with a per capita income at around US$18.000 at the end of 2003. The legal system is based on English law and has been amended to incorporate European Union Directives.
Furthermore, the island has excellent telecommunications and banking facilities that are made available through onshore and offshore banking units (OBU's) and specialized financial institutions operating on the island.

On 1 May 2004, Cyprus became a full member of the European Union and as of 1 January 2008, the Euro will be adopted as the main currency of the country. This development is expected to further boost the economy and enhance stability.

Tax law was reformed in 2002 in order to align Cyprus with European Union directives. As part of this reform, all distinctions between local and international companies were abolished as from 1 January 2003, while at the same time maintaining a favourable tax regime for the international investor. The following are the main provisions of the new Tax law:

Corporation tax at 10%
Investment income from dividends and profit on sale of securities is exempt from tax
Dividends from Cyprus companies to non-resident shareholders is free from any withholding tax
Carrying forward of tax losses and setting-off against future profits with no time limitations
Group relief provisions

In addition, Cyprus maintains an extensive network of double tax treaties with over 37 countries worldwide and negotiations are underway to conclude treaties with a number of other countries. More, importantly, the adoption of the European Union’s Parent-Subsidiary Directive effectively expands the treaties’ network to all European Countries at a corporate level.

Over the years, Cyprus has developed into an important financial centre and is the natural choice for international business.

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