Cyprus' corporate tax is one of the lowest in Europe at 12.5 percent, which can be reduced to as little as 2.5 percent when the Notional Interest Deduction (NID) is applied.
Cyprus, an EU member country is attracting ex-pats from all over the world, with Indians accounting for a fair share of it. What catches the attention of the HNIs is the strategic location of this Mediterranean jewel backed by a vivid landscape, scenic beauty, and laid-back but modernised lifestyle.
The third-largest island in the Mediterranean, Cyprus is located to the south of Turkey and south-east of Greece and at the intersection of Africa, Asia, and Europe. With time, the island has garnered traction of the upper-class for all the right reasons.
Some major reasons for being attracted to the island nation are as follows:
Low tax rates and a business-friendly environment
Cyprus' corporate tax is one of the lowest in Europe at 12.5 percent, which can be reduced to as little as 2.5 percent when the Notional Interest Deduction (NID) is applied. Investors can gain a lot in terms of tax incentives and benefits in Cyprus.
To be more specific, there is 0 percent tax on dividends and interest earned for non-domiciled individuals, 0 percent tax on gains from the sale of shares, securities and bonds, 0 percent withholding tax on interest and dividends, 0 percent succession tax. Tax on capital gains is 0 percent, except for disposal of real estate or shares of company holding real estate in Cyprus. Rental income is taxed at normal rates following an allowance of 20 percent.
Adding to this, Cyprus is covered under the EU Double Tax treaty with over 63 countries which means that an individual cannot be taxed twice for the same income in another country.
Easy Citizenship rules
There are two easy ways, Citizenship by investment - this is where you invest, obtain a passport and become a citizen of Cyprus and the other one is Residency by investment - this is where you obtain the equivalent of the 'Golden Visa' or the UK's ‘Indefinite right to remain' post-investment.
One can migrate to Cyprus permanently through both these routes. First, the candidate is required to have a permanent residence in the Republic of Cyprus worth a minimum of €500,000 plus VAT along with 2 million euro investment in real estate, land development, infrastructure projects, AIFs or set up an owned company. As an alternative, 2 million euro can be invested towards permanent residence or entirely in real estate decreasing the minimum requirement from 2.5 million euro to 2 million euro.
The amount of money required for the permanent residency scheme is a fraction of what is required for obtaining citizenship. The residency for an individual who applies is generally granted to them within three to four months, and the whole family qualifies for immigration, including the applicant's spouse, dependent children up to 25 years, and the applicant's parents.
Cyprus' residency allows flexible entry and exit with no obligation to reside on the island which means that a short visit to Cyprus once in 2 years will be sufficient. Permanent Residency of Cyprus can be obtained easily without any high costs. The minimum investment required is 300,000 euro including VAT. The candidate should also prove a minimum yearly income of 30,000 euro and a further income of 5,000 euro for spouse and each child. An extra 8,000 euro for each parent.
All income can be pension income or investments. Additionally, applicants must deposit 30,000 euro in a Cypriot Bank, which is held as a bond for 3 years. Cyprus residency by investment converts to citizenship or passport after 7 years of legal residency. Nearly 3,300 applications have been approved under the Cyprus Investment Programme since its inception. In 2016, more than 400 applications were approved.
Cost of education amongst the lowest in Europe
There are many advantages of studying in Cyprus, as the country spends more than 7 percent of its GDP on education, the third-highest in the EU after Denmark and Sweden. The most popular curriculum offered by universities in Cyprus is on the business of hospitality and tourism. Courses offered by universities in Cyprus are affordable, with a fee range (Lower range) 2,400-2,800 euro per semester, a hostel or living expense for students can are affordable too compared to their EU counterparts in a range of 250-400 euro per month.
Ease of work/travel around the globe
According to the law, a foreign student working in Cyprus is allowed to work for 20 hours per week while studying and for annual vacation, the permit is 36-40 hours a week.
Work travelling in EU countries while staying in this country is very easy, Cyprus has visa-free access to over 170 countries, this as per a Henley Passport Index. This makes Cyprus' passport one of the most powerful passports worldwide. Under the Investment program, one can enjoy all the privileges of a Cypriot citizen as well as the benefit of working and studying in Cyprus and other European countries by obtaining the Cypriot passport.
Standard of living is amongst the highest in the world
A recent study which analysed 107 countries, voted Cyprus the fifth safest country in the world, only behind Switzerland, Singapore, Spain, and Japan. In the same study, for countries with populations of less than 5 million, Cyprus topped as the safest country to live in and visit. Cyprus citizenship comes with access to state-sponsored health care benefits.
Finally, it is noteworthy mentioning again the importance of life quality that Cyprus has to offer you. The jewel of the Mediterranean is the ideal place for high-net-worth Indians who want to gain high-level education for their children, access to Europe and other countries around the world, and want to enjoy more than 300 days of sunshine next to the beach. Cyprus and many other countries in Europe, such as Germany, Sweden, and Norway, offer free education in lower, higher education and universities too compared to other countries. Cyprus has something for everyone.
The author is Founder & CEO at Millwood Kane International.Disclaimer: The views and investment tips expressed by investment expert on Moneycontrol.com are his own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.