All Cypriot business entities are free to take advantage of the many tax benefits which the authorities have designed specifically to provide maximum profit potential. Chief among these benefits are the low tax rate applicable to the net profits earned by companies and the total tax exemption for international partnerships. In addition, tax incentives have been introduced to attract foreign investment in respect of certain local companies and projects.
Double taxation treaties
Cyprus has concluded double taxation treaties with more than 40 countries which provide important tax advantages. Treaties with the Central and Eastern European countries, China and India contain no anti-avoidance provisions and Cypriot companies may therefore be used beneficially as holding, licensing and finance investment vehicles in those countries. Of the treaties now in force, only those with Canada, Denmark, Germany, France, Sweden, the UK and the USA contain limitation of benefits articles, which only affect the flow of income from these countries to Cyprus and not income flows from Cyprus to other countries.