A guide to the benefits of citizenship by investment in Cyprus

By Andreas Georgiou, director, Stalworth Pro Limited

(Wednesday, 25 April 2018)

 

Citizenships and permanent residency schemes:

Cyprus, a member of the European Union since 2004, provides one of the most attractive, quick and straightforward investment immigration programs to wealthly individuals who are non EU citizens and is the only EU country that offers both options of permanent residency or citizenship without the requirement of residency. Most importantly, both programs are based on investment which can be disposed of after a maximum of three years, as opposed to a donation to the government that applies to most of the other countries’ programs. Both programs are offered through a fast track procedure enabling the applicant to receive an EU passport within three months or a permanent residency permit within two months.

Benefits of Cyprus PR

• Fast track procedure allowing for the issuance of Permanent Residence Permit within two months;

• Permit covers the whole family;

• No physical residence requirements during or after the application procedure (the applicant, his/her spouse and any dependants need only visit Cyprus once every two years);

• No language requirements;

• A secure investment, rather than a donation like in many countries;

• Insurance policy against political instability;

• Children have the right to much lower tuition fees in European Union countries because they will be considered permanent residents of a European Union country;

• Closest EU country to the Middle East ;

• Wonderful holiday destination;

• Low crime rate;

• Well known and established financial and tax planning jurisdiction;

• The property acquired will be freehold;

• No inheritance tax;

• Property acquired can be rented;

• One of the lowest property taxes in the world;

Benefits of Cyprus passport

• EU citizenship;

• EU passport;

• Granted within three months;

• No residency requirement;

• No language requirement;

• Investment can be disposed of after three years;

• Visa-free travel to more than 157 countries. Quickly and cost effectively obtain visas for other countries, such as the USA;

• A secure investment, rather than a donation like in many countries;

• Access to the best education and healthcare institutes;

• Children have the right to much lower tuition fees in European Union countries because they are nationals of a European Union country;

• Insurance policy against political instability;

• EU passport holders are entitled to enter, reside, study and work in the European Economic Area (European Union, Iceland, Liechtenstein, and Norway) and Switzerland without a visa.

• Wonderful holiday destination;

• Low crime rate;

• Property(ies) acquired can be rented;

• There is no inheritance tax;

• One of the lowest property taxes in the world.

New non domiciled rules (A very attractive and tax benefit scheme):

The situation before the amendment of the law: An individual irrespective of its domicile of origin who used to spend a period or an aggregated period of more than 183 days in a tax year in the Republic of Cyprus was subject to both Income Tax and Special Contribution of Defence (SDC)

Following introducing of new concept: According to the amendments of the Law and the non-domicile rules introduces in July 2015, an individual who is a tax resident in Cyprus but is considered as “not domiciled” in the Republic of Cyprus, will now be exempt from SDC. As a result and given the fact that dividends (either domestic or foreign sourced) and “passive” interest income are also fully exempt from income tax, individuals with tax resident status but not domicile in the Republic will be FULLY EXEMPT from taxation on these sources of income.

Double tax treaties with more than 50 states

The main purpose of these treaties is the avoidance of double taxation of income earned in any of these countries. Under these agreements, a credit is usually allowed against the tax levied by the country in which the tax payer resides for taxes levied in the other treaty country, and as a result the tax payer pays no more than the higher of the two rates (a number of the treaties also contain very beneficial “tax-sparing credits”).

The EU Parent Subsidiary and the Interest & Royalties Directives can be used to eliminate withholding taxes on payments of dividends, interest and royalties from or to EU Group Companies and the EU Merger Directive to eliminate the tax effects of EU Group reorganisations

Notional Interest Deduction

The Basics The Notional Interest Deduction (“NID”) is a new powerful tool provided to local and international businesses which enables them to deleverage and realise a tax efficient return on new (qualifying) equity. This return is achieved through the deduction of a “notional” interest expense from their taxable income.

If you wish to provide you a specific fee quotation, tax advice either general advice that meets yours either your client’s business needs, please do not hesitate to contact us.

Alternatively we could also arrange a Skype call to discuss services provided by our firm.

Our firm Stalworth Pro Limited, is an established firm qualified with experienced founder that provides a number of professional services (audit / tax / vat / accounting / formation of companies / citizenship / residency / intellectual property / administration and consulting).

Cyprus is an attractive country for business especially for non-Europeans that want to enter the European Union or European Zone. Furthermore, Cyprus has an exceptionally attractive tax regime (especially for holding companies) and provides access to benefits of its good double tax treaty network and relevant EU directives. The double tax agreement already signed between Cyprus and more than 50 states are a useful tax-planning tool to protect businesses and individuals against double taxation of income earned in other countries.

Cyprus has also recently updated its tax regime and also supplies important services that can make Cyprus one of the most attractive jurisdictions in Europe.

www.stalworthpro.com  •  info@stalworthpro.com  •  +35 722 270 803
88 Arch. Makariou III, 2nd Floor, Office 203, 2224 Latsia, Nicosia, Cyprus

 

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