Limassol – Cyprus Unveils Tax Incentives to Boost Investment and Citizenship Appeal
Cyprus has recently revised its taxation framework, positioning itself as one of Europe’s most attractive destinations for citizenship-by-investment. The new regime offers tax-free profits to non-domiciled investors, raising the question: will this bold move attract greater foreign direct investment (FDI)?
Henley & Partners, global leaders in residence and citizenship planning, reaffirm Cyprus’ Citizenship-by-Investment Program as a top-tier option in their 2015 Global Residence and Citizenship Program (GRCP) Report. The program scores high across several criteria, including quality of life, visa-free travel, processing speed, investment and residence requirements, flexibility, and transparency.
President Nicos Anastasiades recently announced sweeping tax reforms during the 54th Annual General Assembly of the Institute of Certified Public Accountants of Cyprus. These include exemptions from capital gains tax on real estate purchases through the end of 2016, and a 50% reduction in property transfer fees. Notably, the introduction of a ‘non-domicile’ status exempts qualifying individuals from the Special Defence Contribution Tax—30% on interest and 17% on dividends—until the end of 2016.
According to Yiannos Trisokkas, Managing Partner of Henley & Partners Cyprus, these reforms solidify Cyprus’ position as a premier international business hub. “With an attractive tax regime, modern infrastructure, and high living standards, Cyprus is becoming increasingly appealing to investors and high-net-worth individuals (HNWIs) seeking alternative residence or citizenship.”
The reforms also include notional interest deductions for new capital injected into Cyprus-based companies, as well as plans to modernize the property tax system.
Looking ahead, additional measures are under discussion in Parliament, such as the extension of tax exemptions for expatriate income over €100,000 from five to ten years, and neutral tax treatment for certain foreign exchange gains.
With these sweeping changes, Cyprus is not only enhancing its investor appeal but also aiming to cement its role as a key destination for global capital and talent.
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