Why Cyprus Is the Best Place in Europe for Digital Business
August 12, 2018 — in Articles
There is a tiny island sitting on the very edge of Europe, which you probably only think about as a lovely holiday destination — over the past few decades it certainly was not famous for being an economical utopia (remember the banking crisis in 2013?). But, after living in the Republic of Cyprus for more than six months and getting a decent insight into all the marvels it has to offer, I eventually realized that the innocent looking isle is indeed an entrepreneurial paradise for any digital businessmen and -women.
The regulatory situation
The particulars of tax laws and other financial regulations are without a doubt some of the key elements you need to look at if you are planning on moving your business to another country. In these areas, the eastern Mediterranean island is hard to beat on the European continent.
Since 2004, the year in which Cyprus joined the European Union, the country has quickly established a reputation for being a safe and reliable jurisdiction. Furthermore, it has one of the most beneficial tax plans in the world, including more than 40 double tax treaties. And although the authorities recently increased the corporate taxes from 10 to 12.5 percent, these figures can still be considered comparatively moderate.
The simplicity of founding and administering a limited company (Ltd.) is also worth a mention. Setting up an enterprise is usually low cost and can be done in a few days.
Additionally, due to the fact that there is currently no controlled foreign corporation(CFC) law active in the Republic of Cyprus, all residents have the right to legally form and conduct an offshore corporation. While this practice gives operators the option to reduce their company’s taxes to not a single penny, it may come along with some hurdles in regard to engagement in international collaborations. But, from the perspective of a cryptocurrency investor, this is also a chance to avoid potential upcoming regulations that could hamper business in the near future.
The cherry on top
These tax laws are, of course, absolutely impressive. Yet, the most remarkable aspect has not even been listed so far. With successful immigration into the state of Cyprus after July 2015, applicants will be awarded with non-domicile status (non-dom).
This precious condition lasts no less than 17 years and grants a great variety of advantages. Not only does it reduce your personal income tax by 50 percent, it also eliminates any taxes on dividend and interest income. As this can be combined with the offshore solution, you will surely recognize the significance of this legislation. Rarely have we seen a European nation that offers immigrants the opportunity to live without any taxes at all.
Life above the rock
Enough with the money talk for now. Not having to spend a lot on the government is a great position to be in, but it would be completely useless if there was no infrastructure for digital businesses. Luckily, you will most likely be able to receive a satisfying broadband and mobile internet connection, even if your house is located on the very top of a typical Cypriot mountain. Moreover, the Republic of Cyprus offers two medium-sized international airports and — with the metropole Limassol — a trade and transportation hub.
OK, so you won’t be disconnected from the outside world. But, how do you communicate with other citizens if you haven’t mastered the Greek language? Well, fortunately for you, the British Empire decided to place Cyprus under administration of the crown in 1878. As a result, English is the second official language and roughly 80 percent of the population is able to speak it properly, according to Eurobarometer.
Pure freedom, almost
As an internet entrepreneur you might demand high flexibility in terms of your current location. Once again, the Republic of Cyprus is able to trump other jurisdictions with the introduction of the “60 day rule” in July 2017. According to this edict, permanent residents need to actively stay in the territory of southern Cyprus for at least 60 days per year, in order to be fully taxable there. This figure can be considered as quite decent in contrast to the worldwide common “183 day rule.”
Nevertheless, there are plenty of reasons incentivizing you to stay on this promised land. The four biggest cities (Nicosia, Larnaca, Paphos and Limassol) provide any shopping or leisure activities you could possibly desire. Not to mention the beautiful and well-preserved nature, the enduring summer season and one of the lowest criminal rates in Europe.
The bottom line
The government of Cyprus is doing its best to attract international entrepreneurs by only demanding minor monetary and administrative efforts. Roland Ewert — a German specialist in all things related to incorporation and immigration to Cyprus — has helped expatriates for nearly a decade. In an interview, Ewert recently told me that “the demand for immigration services has increased by more than 50 percent over the last 18 months.”
Are you looking for a place with business friendly regulations and a high living standard?
Do you have an internet business that does not depend on your personal location?
Then why haven’t you packed already?