( How can Cyprus be useful for IT companies and startups? | Emerald Zebra

How can Cyprus be useful for IT companies and startups?

Posted 8/10/2021 by Demetris Georgiou

Whether you're looking to start a new business, relocate an existing one, or establish a gateway to Europe, the Middle East, or Africa, Cyprus has all of the ingredients necessary for the success of your technology-based enterprise. The Cyprus government has announced beneficial incentives, particularly for start-ups, with the goal of sustaining such initiatives that promote entrepreneurship and innovation.  

 

The Cypriot government offers tax breaks and Start-up Visa to investors in innovative small and medium-sized businesses. Cyprus has long been a desirable international business hub due to its tax advantages, but additional incentives are now available. 

Numerous additional incentives have been made available in recent years to startups and professionals relocating to and operating from Cyprus. Cyprus, a member of the European Union since 2004, is an ideal business hub, with a highly efficient and established regulatory structure that facilitates business formation, intellectual property protection (in conjunction with international agreements), investment opportunities, and entrepreneurship schemes, among other benefits. 

 

Labor Costs are Low, Office Space is Inexpensive, and Professional Assistance is Available 

Cyprus has the lowest cost of technical and professional talent in Europe compared to any other major country. The average hourly wage is around €15.80, which is significantly less than the rest of Europe (the UK pays €26.70 and the Netherlands pays €33.30). Non-wage costs to the government, such as social contributions, account for 17% of total employment costs, compared to a European Union average of 26%. 

Rental rates for offices are low, though they have increased significantly in recent years due to high demand. Cyprus is the second cheapest location in Europe for office rental space, according to a recent report. Nicosia and Limassol both have a variety of low-cost offices and co-working spaces, including some specifically for startups. Additionally, incubators are available for this purpose. 

Finally, and perhaps most importantly, low-cost business support services such as accounting, legal counsel, information technology, marketing, and advertising must be mentioned. 

 

Taxation is Minimal 

Cyprus's attractive tax regime has long been a defining characteristic of the country as a business center. The country has some of Europe's lowest tax rates and highly competitive business and individual tax incentives. 

Corporate taxation is 12.5 percent, one of the lowest rates in the EU. Additionally, technology companies with the intellectual property may apply for a tax exemption of up to 80%. Additionally, Cyprus corporate tax provides a slew of additional deductions and exemptions.  

 

Individual Income Tax 

Several advantages of the personal tax include the following: 

  1. Personal income up to €19,500 is tax-free. 
  2. Tax residents who are not domiciled in Cyprus do not have to pay taxes on foreign dividends, interest, or rental income. 
  3. Up to €150,000 of investment in innovative small businesses may be deducted from taxable income each year. 
  4. Dividends are tax-free, which enables the majority of technology entrepreneurs to reduce their overall tax burden. 
  5. Avoiding duplication of taxation 
  6. Cyprus has 62 tax treaties in place with other countries to assist individuals and businesses in avoiding double taxation and structuring effectively. 

 

Cyprus's Human Capital and Labor 

Cyprus has one of the youngest labor forces in the EU, with nearly half (46%) of the population possessing a tertiary degree. Since 2000, the educational level has risen, with high-quality local universities attracting thousands of international students. Numerous residents choose to continue their education by studying abroad. Another significant labor advantage is that Cyprus, as an EU member, allows for the recruitment of talent from all over Europe.  

Finally, Cyprus has a Startup Visa program that allows entrepreneurs from outside the EU to establish a business in Cyprus. Non-Europeans may also apply for work visas, which allow businesses to hire from outside the EU. It's worth noting that high-paid employees can benefit from both Cyprus's attractive personal tax regime and the 60-day tax residency program. 

Comments

Post Comment

*
*
*