Cyprus. Structured for International Business.

From 1 January 2026, Cyprus’ standard corporate income tax rate is 15%, with the loss carry-forward period extended to 7 years, helpful for businesses with ramp-up periods or multi-year investment cycles. 

Cyprus also extended the R&D “super-deduction” (120% total deduction) on qualifying expenditure through 2030, which can be relevant for innovation-led businesses. 

Best for: operating companies · scale-ups · regional service hubs.

Under Cyprus domestic rules, there is generally no withholding tax on dividends and interest paid to non-residents, and generally no withholding tax on royalties paid to non-residents where the rights are not used in Cyprus. 

From 1 January 2026, Cyprus introduced defensive measures: dividends paid to related/associated companies in non-cooperating (“blacklisted”) jurisdictions can attract 17% WHT, dividends paid to related/associated companies in low-tax jurisdictions can attract 5% WHT, and interest/royalties paid to related parties in low-tax jurisdictions may be non-deductible for Cyprus tax. 

Best for: international groups · cross-border cash flows.

Cyprus remains widely used for holding and investment platforms because of its treaty network and its approach to dividend/capital structuring. Dividend income is typically exempt for Cyprus tax resident companies, subject to anti-avoidance/participation rules. 

Profit from the sale of securities is identified as wholly exempt in Cyprus tax incentives summaries. 

Note: Capital Gains Tax generally targets Cyprus immovable property (and certain “property rich” share disposals), and the 2026 reform tightens parts of the CGT perimeter/thresholds - so deal structuring should be reviewed early. 

Best for: group holdings · investment SPVs · family office structures.

NID is a tax-deductible notional return on “new equity” introduced from 1 January 2015, typically in the form of paid-up share capital or share premium (and similar equity injections). 

The NID is calculated using a reference interest rate linked to the 10-year government bond yield of the country where the funds are employed plus a premium (Cyprus rules set the mechanics), and it is subject to an 80% cap of the taxable profit generated from the activity/assets financed by that equity. 

Best for: equity-funded operating companies · investment platforms · treasury/financing models.

Cyprus’ IP Box provides an 80% deduction on qualifying profits from qualifying IP, calculated under the OECD modified nexus approach - linking benefits to the R&D activity that created/maintains the IP. 

Government incentives summaries explicitly reference 80% of net profit (nexus-calculated) for intellectual property income. 

This regime is often relevant for B2B SaaS and software models where the documentation supports the nexus: who performs the development, how costs are tracked, where decision-making sits, and how contracts reflect reality. 

Best for: SaaS · software/IP owners · R&D-led businesses.

Cyprus remains attractive for inbound individuals where planning is done properly: 

Non-dom rules can exempt qualifying Cyprus tax residents (who are not domiciled) from SDC on dividends/interest in many cases (subject to the regime’s conditions). Following its expiry in accordance with the relevant SDC limitation provisions, the non-dom exemption may be extended for up to two further five-year periods, with an upfront payment of €250,000 required for each period. Employment income exemptions (headline incentives): 

- 20% exemption on remuneration (up to €8,550 p.a.) for eligible first employments commencing after 26 July 2022, for 7 years. 

- 50% exemption for eligible first employments commencing after 1 Jan 2022 (including a remuneration threshold and lookback conditions), for up to 17 years. 

Best for: founders/executives relocating · senior hires.

Cyprus supports tax-neutral tools for qualifying reorganisations (mergers, divisions, share exchanges, asset transfers, etc.), which are commonly used in group simplification and M&A integration (subject to conditions).

Cyprus offers an EU-endorsed tonnage tax system for qualifying shipping activities and structures. Government material describes the tonnage tax framework and its EU approval history.