Cyprus is a tax-efficient EU Intellectual Property location. It offers full international protection for IP assets and significant financial benefits.

Choosing the right location for the centralization and management of IP is a very important strategic business decision.  Cyprus could be the ideal location to safeguard and protect an organisation’s IP and contribute to its tax optimization. Cyprus IP legislation is applied in line with the OECD's guidance and reviewed and assessed according to the EU Code of Conduct.

Cyprus Intellectual Property (IP) Regime - Main Benefits

Cyprus IP Box Regime protects the IP but also economic-tax benefits.

Tax benefits of Cyprus IP companies

• 80% of worldwide royalty income generated from IP owned by Cypriot resident companies (net of any direct expenses*) is exempt from income tax.
• 80% of profit generated from the disposal of IP owned by Cypriot resident companies (net of any direct expenses*) is exempt from income tax.
• any expenditure of a capital nature for the acquisition or development of IP is claimed as a tax deduction in the year in which it was incurred and the immediate four following years on a straight-line
• All the above exemptions are also available for IPs acquired or developed before January 2012.

Cyprus’ wide double tax treaty network and access to the EU Interest and Royalty Directive serve as additional means for the group to achieve tax optimization when it comes to IP exploitation through Cyprus.

Other Benefits of Cyprus IP Companies

Resting on a sound legal system based on Common Law principles and being a signatory to International Conventions on the Protection of Intellectual Property, Cyprus’s IP tax regime is considered the most favourable in Europe, affording the maximum protection, stability, and assurance for IP owners.

The IP regime has been reviewed by the EU Code of Conduct and has been assessed as fully compatible with EU standards

Reasons to Protect Your Organisations Intellectual Property (IP)

Protecting your IP is a must in the digital age. It is the only legal way to avoid having your unique ideas, products, or services copied or used without permission.

• Intellectual Property (“IP”) can be one of the most valuable assets of an organization, which may be sold or used for other commercial purposes for a fee.
• By granting a patent, you acquire exclusive rights to use and exploit your invention.

A patent is granted by the Intellectual Property Section https://www.intellectualproperty.gov.cy/en/

Qualified IP Assets

Eligible IP assets shall include a wide range of intangibles including: Copyrights, Patented inventions, Trademarks.

How P. Kalopetrides & Co. can assist you?

• Cyprus IP holding structures and initial set-up
• Corporate statutory compliance matters
• Existing IP – tax efficient transfer to Cyprus IP company
• Eligibility of tax depreciation
• IP-related substance
• Ongoing corproate and statutory complianace matters.

P.Kalopetrides & Co.

Contact us to find out how to protect your assets.

Book a preliminary teleconference consultancy meeting.

Contact us by email: This email address is being protected from spambots. You need JavaScript enabled to view it. or Tel: +357 22 669017

^{CYPRUS: Non–Domicile Tax Rules & Relocation}

^{It offers many opportunities and several benefits for businesses and individuals to work fully or partly from Cyprus.}

Cyprus with its attractive tax regime, great quality of life, and stable political climate, could be an ideal location to reside. The various tax exemptions can certainly be utilized to effectively structure your tax liability.

The 60-day Rule combined with the applicable ‘Non-Dom’ regime has proven extremely popular with location-independent entrepreneurs, business people, investors or Digital Nomads
(people working remotely; ask for further information), and family Cyprus Non-domicile Status.

In case of receipt of passive income may be eligible for a Non-dom Status. The latter allows Cyprus tax resident individuals, not born in Cyprus and have not lived in Cyprus to benefit from
a complete 17-year exemption from taxes, that is Special Defence Contribution (SDC), levied on interest and dividend income. A zero-tax rate on passive income is surely a preferred bonus
over the standard 17% rate on dividends and a 30% rate on interest income for Cyprus-domiciled individuals.

Main Tax Benefits for an Individual that Chooses to Become a Cyprus Tax Resident 

Individuals who are Cyprus tax residents, whether under the “60-day rule” or under the “183-day rule” are taxed in Cyprus on their worldwide income, however, certain exceptions apply, as follows:

• A Cyprus tax resident individual but non-domiciled in Cyprus is exempt in Cyprus from taxation on his/her worldwide dividend and ‘passive’ interest income (e.g. interest and rental
  income) under the ‘Cyprus Non-Domiciled Tax Status’ (as above).
  
• Profit from the sale of securities is exempt from tax in Cyprus. ‘Securities’ include, inter alia, shares in local or foreign companies, bonds, debentures, options, etc., except in cases
  where the value of the shares derives from the value of immovable property in Cyprus.
  
• The 50% exemption rule:
  Individuals who take up employment in Cyprus with an annual income in excess of €100.000 will be eligible for an exemption from taxation of 50% of their income for a period of 10
  years, commencing from the year of employment, provided that he/she has not been a tax resident of Cyprus three out of the five years preceding the year of employment.
  
• The 20% exemption rule: Individuals who take up employment in Cyprus and were not tax residents in Cyprus prior to commencing such employment will be eligible for an exemption from taxation of 20% of their income or €8.550 (whichever is lower) from any employment which is exercised in Cyprus.
  
• Income from employment carried out outside Cyprus is exempted from Cyprus income tax, provided that the employment exercised outside Cyprus exceeds 90 days per tax year.
  
• Low Tax Rate in respect of Foreign Pensions, taxed in Cyprus at the flat rate of 5% for amounts more than €3,420.
  
• No inheritance tax, no wealth tax, no gift taxation, no immovable property taxes.

Further Benefits

• Right to live and work anywhere in the EU, if you are an EU citizen.
• Access to the country’s excellent healthcare system and high educational standards.
• Safe country and excellent lifestyle.
  

Definition of Non-Domiciled Persons

In accordance with the provisions of the wills and Succession Law, there are two kinds of domicile:

- The domicile of origin, which is received at birth (generally depending on the father’s side), or
- The domicile of choice, which is acquired by a physical presence in a particular place and by demonstrating a sufficient intention to make it the place of permanent residence.

 Tax Residency Rules for Individuals

A person who satisfies any of the below criteria can receive a tax residence certificate by submitting a written application and supporting evidence documentation.

• The 183 days rule: A person resides in Cyprus for one or more periods exceeding a total of 183 days in the tax year.
  
• The 60 days rule: A person resides in Cyprus for at least sixty (60) days in the tax (calendar) year. Moreover, need to meet all the below criteria:
  

1. He/she carries out any business in Cyprus; and/or works in Cyprus and/or holds an office in a company that is tax resident in Cyprus during the tax year; and

2. He/she maintains a permanent residence in Cyprus (owned or rented); and

3. He/she does not reside in any other single state for a period exceeding 183 days, and

4. He/she is not a tax resident in any other state.

Next Step

Book a preliminary teleconference consultancy meeting. Our experienced team can assist you with the procedures of obtaining Cyprus Tax Residency status & Advisory for Relocation.

This email address is being protected from spambots. You need JavaScript enabled to view it. | Tel: +357 22 669017.