Cyprus as a hub for investment funds

Cyprus has established itself as an attractive investment fund hub in

Europe. Cyprus is an advantageous compared to other countries due to the quality of services provided by service providers in this area at a comparatively lower cost than other

countries. Most importantly, however, what makes Cyprus have a competitive advantage is the extremely attractive tax regime. Below we briefly set out a number of tax incentives implemented to attract foreign investors.

Tax Incentives

  • No capital gains on disposal of Capital gains tax is only imposed on the sale of immovable property situated in Cyprus as well as on the sale of shares directly or indirectly held in companies (other than listed shares) in which the underlying asset is immovable property situated in Cyprus.
  • Notional Interest Deduction (NID) on new capital introduced resulting in a reduced effective interest tax
  • No tax on dividends received
  • No withholding taxes on dividend payments from Cyprus to non- residents
  • Low corporate tax rate – 12.5%
  • Low operating costs
  • Each AIF compartment taxed as a separate taxpayer
  • Interest received is taxed at the corporate tax rate
  • Cyprus benefits from over 60 double tax treaties

Further incentives for investors

  • The redemption of units is not subject to tax or SDC
  • No deemed dividend distribution tax
  • No withholding taxes or SDC on dividend payments for investors holding a non-domiciled status
  • No withholding tax for corporate investors

For further information or advice contact our team