Increasingly ranked on the shortlist of decision makers when it comes to choosing the right location for regional headquarters, Cyprus provides not only access to the EU’s market of over 500 million people, but also a secure base to tap into Middle Eastern and African markets.
With transparency high on the agenda and new regulation such as the OECD Common Reporting Standard (CRS) coming into play, establishing substance and physical presence is increasingly important for international businesses. This new reality is set to boost Cyprus’ importance as a management and business centre, where substance is easily and cost-efficiently established. For decades, Cyprus has been a leading jurisdiction used by blue-chip corporations and corporate planners to channel investments into markets worldwide. With operational costs substantially lower than in mainland Europe, the country offers an efficient environment to establish pan-European, African or Middle Eastern networks. The island’s efforts to streamline its business environment have also seen success, with Cyprus jumping up 13 places in the 2016 World Bank’s Doing Business Report. English is the business language, and Cyprus’ internationally trained service providers – mostly educated in the UK or the US – provide global expertise to meet the needs of clients worldwide.
The strategic geographical position of Cyprus in the Eastern Mediterranean has always played a pivotal role in influencing the country’s destiny and prosperity, and has led to close cultural and business relationships with countries in the region. A former British colony, Cyprus has a longstanding relationship with the UK, enjoying close business ties as well as a comprehensive, modern and forwardlooking legal and regulatory framework based on English Common Law principles. Cyprus’ entry into the EU in 2004, and the eurozone in 2008, was welcomed by the international business community, who saw it as an opportunity for foreign companies to use the country as a convenient entry point into the EU marketplace. Multinationals from a range of sectors have already chosen Cyprus as the location for their regional headquarters. Giants such as Weatherford, NCR, Columbia Shipmanagement, Kardex, Wargaming and AMDOCS are just some of the international corporations that have based operational or management functions on the island. Cyprus is also one of the most influential global hubs for ship owning and shipmanagement services. Thanks to its advantageous legislative framework, the island has attracted some of the world’s most recognised names in shipping for the last 50 years. Today, is the largest third-party shipmanagement centre in Europe and the largest crew management centre in the world, while the island’s international ship register is the third largest in Europe and the 10th largest in the world. The success of the shipping sector has also developed clusters and auxiliary services, which is a model that could be successfully replicated in other sectors.
Key Corporate Location
Cyprus offers a strategic location, a competitive and fully EU-approved tax environment with a 12.5% corporate tax rate, an educated English-speaking labour force, excellent telecommunications, a modern banking and legal infrastructure, as well as a cosmopolitan lifestyle – all of which make it an ideal international management centre and springboard into neighbouring markets. Foreign companies already based in Cyprus comment favourably on their experiences with local employees in terms of productivity, profitability and dependability. Doing business in and from Cyprus is easy and straightforward. Home to a formidable international business and financial services sector, the country is a convenient base for region-wide corporate coordination and central management functions, as well as sales, marketing and customer service operations. As a cost-effective, pro-business and politically stable and neutral country, Cyprus offers companies an ideal location to successfully compete in the region. A transparent and fiscally efficient tax structure leads the way and is complemented by a network of almost 60 double taxation treaties, facilitating international business and ensuring a smooth trading environment. In addition to its geographical proximity to major markets, Cyprus also scores high on connectivity. The country is connected by air through its two international airports with major cities in Europe and key destinations in North Africa and the Middle East, most being just a few hours’ flight-time away. The country also has long-established links with Eastern European countries with many Cypriot professionals having in-depth knowledge of these markets, and often acting as key business introducers. An added benefit for foreign business will be the launch of a new fully fledged One Stop Shop in 2016, which will make the process of setting-up and investing in Cyprus even more efficient.
The Pull Factor
Cyprus has established itself as a magnet for foreign-owned companies and is continuously improving its competitive position. A stable political and business environment coupled with an excellent quality of life, are just a few of the many reasons why companies relocate senior decision makers to perform strategic functions from Cyprus. An added benefit, is the launch of new legislation and tax incentives for high-net-worth individuals and high-earning expat executives, providing a 50% exemption on personal income tax for those earning more than €100,000 and a 20% exemption (subject to a maximum of €8,550 per annum) from income tax from any employment exercised in Cyprus by an individual who was not Cyprus resident before commencing such employment. In the long term, Cyprus has great prospects to benefit from growth in the region and become an increasingly popular choice as a safe location for regional headquarters. Boasting the lowest crime rate in the EU, a superb Mediterranean climate, competitive personal tax rates, as well as excellent educational and healthcare systems, Cyprus is an easy sell for expatriate executives, particularly those with families.