INSIGHTS

Crona Group, a leading and rapidly growing construction and development company in Cyprus, is dedicated to creating modern, inspiring living spaces. Stay informed with our expert insights, property tips, and updates to make the best decisions in the evolving Cyprus real estate market.

Commercial Properties in Cyprus: A Strategic Move for Businesses

Investing in commercial property in Cyprus offers a strategic opportunity for both business expansion and gaining permanent residency. Limassol, the country’s business hub, provides strong rental yields (5%-8%) and high return on investment (7%-9%) for prime commercial properties. The Residency by Investment program allows investors to secure permanent residency with a minimum investment of €300,000, making Cyprus an attractive destination for international businesses.

Property Mortgage Loan in Cyprus

A comprehensive guide to property mortgages in Cyprus. It covers eligibility criteria, the mortgage application process, required documents, and typical loan terms for each group. The article also details which property developments are eligible for mortgages and discusses the associated costs, tax benefits, and the advantages of investing in Cyprus real estate.

Cyprus Permanent Residence Program (“PRP”)

The Cypriot government offers a residence permit program for non-European investors under Regulation 6(2) of the Aliens and Immigration Regulations. Applicants must invest at least €300,000 in real estate, company shares, or investment funds, and provide evidence of a secured annual income of €50,000. The application process is efficient, with high approval rates if criteria are met. Residence permits apply to the main applicant, their spouse, and children under 25. Additionally, applicants can maintain residence without living in Cyprus, provided they visit once every two years. Successful applicants are eligible to apply for Cypriot citizenship after five years.The Cypriot government offers a residence permit program for non-European investors under Regulation 6(2) of the Aliens and Immigration Regulations. Applicants must invest at least €300,000 in real estate, company shares, or investment funds, and provide evidence of a secured annual income of €50,000. The application process is efficient, with high approval rates if criteria are met. Residence permits apply to the main applicant, their spouse, and children under 25. Additionally, applicants can maintain residence without living in Cyprus, provided they visit once every two years. Successful applicants are eligible to apply for Cypriot citizenship after five years.

Headquartering in Cyprus

The Council of Ministers of Cyprus approved a new strategy on 15.10.2021 to attract businesses to Cyprus, which took effect on 02.01.2022. This strategy replaces the previous policy on employing third-country nationals, allowing Cyprus-registered companies to hire non-EU nationals through the Business Facilitation Unit (BFU). Eligible businesses must meet certain criteria, such as having third-country ownership or significant investment, and can employ third-country nationals with a minimum salary of €2,500 and relevant qualifications. Companies are required to maintain a workforce balance, with up to 70% being non-EU employees, but must aim for at least 30% of local hires within five years. Additional benefits include Cyprus' favorable tax regime, low incorporation costs, and flexible redomiciliation options for businesses.

Acquisition of Property in Cyprus

European nationals, including companies with European shareholders, can freely purchase any type of property in Cyprus without restrictions. Non-European nationals, however, are subject to regulations under the Immovable Property Acquisition (Aliens) Law, which imposes certain restrictions on the type and amount of property they can acquire. For example, they are limited to purchasing one residential unit and one shop or office space, or a plot of land not exceeding 4,014 m² for private residence construction. Additionally, non-Europeans must obtain permission from the Council of Ministers to purchase property, but this is generally granted if the purchase is bona fide. Taxes on property acquisition, ownership, and disposal include transfer fees, stamp duty, VAT, income tax on rental income, and capital gains tax, among others. Non-Europeans can also obtain a Permanent Residence Permit (PRP) by investing in Cyprus property valued at least €300,000.

Cyprus Permanent Residence & Alternative Investment Funds

The Cyprus Permanent Residence Program (PRP) offers non-European investors the opportunity to obtain residency through a streamlined process, provided they invest a minimum of €300,000 in approved categories such as residential or commercial properties, company shares, or units in collective investment schemes like Alternative Investment Funds (AIFs). The program allows investors and their families to reside in Cyprus, with the option to apply for citizenship after five years. Investing in AIFs offers advantages such as no VAT, transfer fees, stamp duty, or legal fees, and exemption from Capital Gains Tax. Additionally, AIFs provide diversification, professional management, and regulatory oversight, making them an attractive investment option.

Cyprus - a place to relocate

Cyprus is strategically located at the crossroads of Asia, Europe, and Africa, making it an ideal hub for business and trade. The island offers a high quality of life with more than 300 days of sunshine, mild winters, and the most blue flag beaches per capita in the EU. As an EU member with a robust legal and tax system, Cyprus attracts international businesses, offering one of the lowest corporate tax rates in the EU at 12.5% and a range of incentives for investors. The country also provides easy access to global and European markets, a strong regulatory framework, and a competitive cost of doing business. Additionally, Cyprus offers attractive residency and citizenship options for investors and highly skilled professionals, making it a favorable destination for both business and family life.

Companies of Foreign Interests

The Council of Ministers approved a New Strategy in 2022 for attracting companies to Cyprus, replacing the previous policy on employing third-country nationals. This strategy removes previous quotas, allowing companies to hire an unlimited number of highly paid foreign workers without a labor market check. Companies must, however, ensure that 30% of their staff are Cypriots or EU citizens within five years. Additionally, the registration process for companies at the Business Facilitation Unit has been streamlined, with eligibility criteria defined based on ownership and investment levels. The new rules also offer relaxed requirements for highly skilled foreign workers seeking Cypriot citizenship, making Cyprus an attractive destination for international businesses.

The Intellectual Property (IP) box regime

The Cypriot Income Tax Law offers an Intellectual Property (IP) box regime effective from July 1, 2016, providing significant tax benefits for companies involved in innovation and intellectual property development, particularly those engaged in extensive Research and Development (R&D). This regime allows for up to an 80% tax deduction on qualifying IP profits, aligning with the "nexus approach" that requires a direct link between the income generated and the expenses incurred. Qualifying intangible assets include patents, software, and other R&D-derived IP, but exclude marketing-related IP like trademarks. The IP box regime significantly lowers the effective tax rate to as low as 2.5%, making Cyprus an attractive destination for technology companies and R&D-focused businesses. Additionally, Cyprus offers several other tax incentives, including exemptions on capital gains from IP assets, notional interest deductions, and R&D super-deductions, further enhancing its appeal for business investment.

Temporary and Permanent Residency in Cyprus: Differences and Requirements

Both a residence permit and permanent residency allow foreigners to live in Cyprus, but with varying degrees of stability and future possibilities.

Business Relocation in Cyprus

Cyprus presents an enticing relocation destination, offering businesses and individuals access to an EU territory and a favorable tax regime. With a corporate tax rate of 12.5% and various incentives, companies can quickly commence operations and benefit from a secure legal framework aligned with the EU. The relocation benefits extend to sectors like high-tech, shipping, pharmaceuticals, and innovation. Employment requirements include a minimum monthly salary of €2,500 and a two-year contract. The strategic location, coupled with tax advantages and a high quality of life, positions Cyprus as an attractive choice for those seeking relocation opportunities.

Personal Tax in Cyprus

Navigating personal taxes in Cyprus involves considering residency rules, with tax obligations applying to global income for residents. The country's appeal lies in its low corporate tax rate, attractive income tax regime, and numerous exemptions and deductions. Residents spending over 183 days or meeting the 60 days rule are subject to taxation, while various income sources enjoy full or partial exemptions. Additionally, social security payments and defense taxes may apply based on individual circumstances.

Company Re-domiciliation in Cyprus

Transform your foreign company into a "tax resident" of Cyprus and reap the benefits of its favorable tax regime, boasting a low 12.5% corporate tax rate, dividend exemptions, and various deductions. Cyprus facilitates a streamlined "re-domiciliation" process, allowing the transfer of a company's "seat of incorporation" seamlessly. This unique opportunity empowers international investors to leverage Cyprus's tax advantages without extensive restructuring, ensuring operational continuity and substantial cost savings. Embrace the strategic move to Cyprus and elevate your business to new heights.

Reduced VAT Rate of 5% on Housing Purchase in Cyprus

When purchasing housing in Cyprus that will be used as a primary and permanent residence, a reduced VAT rate of 5% can be applied under certain conditions, which are detailed in the article. The article also provides comprehensive examples of how to calculate the reduced VAT rate for different scenarios.

Acquisition of Property in Cyprus: Company Vs Individual

Investing in Cyprus real estate through a Cyprus company offers significant tax advantages, such as lower tax rates on rental income and potential reductions in taxable profit via the Notional Interest Deduction (NID). It also eliminates Land Registry transfer fees when transferring property ownership through share transfers, simplifies estate planning, and provides asset protection by insulating the property from personal liabilities. This structure is particularly beneficial for minimizing costs and streamlining property management.

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