When a Cypriot Company Brings Maximum Benefits

The Republic of Cyprus is one of the few European jurisdictions where an entrepreneur receives three key advantages at once: low taxes, flexible corporate law, and EU guarantees. Every year, more than 10,000 new companies are registered on the island, as Cyprus offers unique opportunities for international trade, asset management, and tax optimization.

In this article, we will explore why registering a company in Cyprus can be a profitable decision for you and how you can fully leverage the advantages of this jurisdiction.

When is a Cypriot company especially beneficial?

1. Trading in the EU without VAT

Registering a company in Cyprus allows you to use the EU Value Added Tax system (VIES) and conduct international B2B supplies with a zero VAT rate if the EU requirements are met, such as: both parties have a valid VAT number; the goods or services are genuinely moved between EU countries; the transaction is correctly reported in VIES.

Combined with a 0% tax on dividends, this makes Cyprus one of the most advantageous jurisdictions for export, distribution, and service companies working with partners in the EU and beyond (e.g., the UK, Switzerland).

2. Purchase and sale of corporate rights

0% tax on the sale of corporate rights. Cyprus also provides significant tax incentives for companies involved in the purchase and sale of corporate rights. The sale of shares or equity in a Cypriot company is not taxed. This is an important factor for investors interested in asset management through Cypriot structures.

3. Capital gains from trading shares and bonds

If your business is related to trading financial assets, such as stocks or bonds, Cyprus offers another undeniable advantage. Capital gains from selling these assets are completely tax-exempt.
This makes Cyprus an attractive jurisdiction for entrepreneurs seeking to minimize tax liabilities when dealing with securities. Using a Cypriot company to trade on the stock market gives you the opportunity not only to reduce your tax burden but also to effectively manage your investments on a global level.

4. Capital gains from Forex

Profits received from operations on the foreign exchange market are not subject to corporate tax.
This makes Forex business operations in Cyprus particularly beneficial, as it allows you to retain a significant portion of your profits within the company and use the funds for further development or distribution as dividends.

5. Tax optimization for IT companies

For technology and intellectual property companies, Cyprus offers the IP Box regime, which reduces corporate tax on income derived from intellectual property to 2.5%. This is a major advantage for IT companies and software developers who can optimize their taxes by using the Cypriot jurisdiction to manage their intellectual property. Why does IT choose Cyprus?

• one of the lowest tax rates in the world;
• EU-level intellectual property protection;
• ability to hire developers worldwide;
• legal tax-free distribution of dividends.

Read also: Tax Residency in Cyprus for Freelancers and IT Specialists

6. Holding companies in Cyprus

Cypriot holding companies remain one of the most popular tools for managing international assets.
Thanks to a network of double taxation treaties with more than 65 countries, a holding company in Cyprus can receive dividends from subsidiaries with minimal or zero tax burden.
This makes Cyprus an ideal jurisdiction for international investors interested in global asset management and tax optimization.

A Cypriot company provides extensive opportunities for tax optimization and efficient business operations at the international level, whether it involves EU trade, securities transactions, or intellectual property management.

What is needed for a Cypriot company to operate fully?

To access all tax benefits, a Cypriot company must establish economic substance in Cyprus. This usually includes:

• Office in Cyprus — an actual rental agreement, utility bills, supporting documents, office photos.
• Company management from Cyprus — director and secretary, holding board meetings and adopting corporate decisions.
• Employees or contractors in Cyprus — depending on the nature of the activity and business model.
• Local operational expenses — rent, accounting services, audit, internet, telephone services, and other mandatory costs.
• Actual business activity — functioning website, contracts with clients and suppliers, invoices, operational processes confirming business activity in the jurisdiction.

Feod Group legal services in Cyprus include:

✔ Legal support for company registration
✔ Assistance in opening a bank account
✔ Tax consulting and tax optimization
✔ Administrative and accounting services

If you want to learn more about how to register a company in Cyprus and take advantage of all the benefits, contact us!