Cypriot companies investing in immovable property in other jurisdictions are also in a position of obtaining further business benefits from the capital gains treatment.
In Cyprus, capital gains derived from the disposal of the shares of the company which owns immovable property abroad (directly and/or indirectly) are not subject to capital gains tax.
Profits of a foreign permanent establishment of Cypriot companies are tax exempt in Cyprus. This allows Cypriot companies which have operations in international markets to operate abroad while at the same time optimizing the commercial and tax benefits of Cyprus.
A company is considered as a Cyprus Tax Resident if it is managed and controlled from Cyprus.
A person is considered a Cyprus Tax Resident if they spend more than 183 days in a calendar year in Cyprus. For tax residents, all chargeable income from Cyprus and abroad is taxable in Cyprus.
Additional tax benefits, under the new non-domicile scheme, are also awarded to foreign individuals who choose Cyprus as their base to live. For non-tax residents only, income derived from sources in Cyprus is taxable.
Cyprus’ tax regime is relatively simple, tested and workable. As seen below, the following circumstances in Cyprus constitute an ideal situation for operating a company, especially as an intermediate or ultimate holding entity.