Business Positives of Cyprus Bailout
Agreements with the Eurogroup and implementation of a bailout plan have been successful in reducing the impact of the banking crisis in Cyprus. The country is now beginning a period of recovery and looking to the future with a view to reasserting itself as a principal global financial centre.
Despite the domestic problems Cypriot banks are still struggling with, the country remains a favourable location for international business. Foreign investors will find that Cyprus continues to be an established and conducive business environment with the most beneficial tax regime in Europe and a number of financial incentives.
Tax benefits such as participation exemption on capital gains and income and dividends still apply to Cypriot entities when they are operational in conjunction with international structures. There are also no thin cap or CFC rules, no taxes on the disposal of securities, no withholding taxes on dividends, interest, or royalty payments to non-residents, and a comprehensive network of double taxation treaties with fifty countries worldwide. In addition, the IP box tax regime in Cyprus is the most advantageous in the EU.
To stabilise your own financial circumstances in Cyprus there are two options for you. These will help to mitigate the risk of holding money within the Cypriot banking sector at this time.
Customers can move their bank deposits from the Bank of Cyprus to branches of other international banks which are more reliable in the current climate, for example, Barclays or Societe Generale.
Cypriot companies can direct their capital flow into existing bank accounts outside of Cyprus, again mitigating the risk of holding money in the country.
Any movement of money must be conducted within the temporary parameters of the Central Bank of Cyprus and it is important to adhere to these regulations. The measures suggested, similarly to the banking limitations and capital controls in Cyprus, are temporary but are suggested for your financial security and peace of mind.