5 Reasons to Transfer Your Business From Greece to Cyprus

5 Reasons to Transfer Your Business From Greece to Cyprus

5 Reasons to Transfer Your Business From Greece to Cyprus

More and more experienced entrepreneurs who maintain their business in Greece decide to seek better “tax headquarters” to optimize their business profitability and operations. With taxation rates and operating costs rising dramatically, it is no surprise that many business founders end up in Cyprus looking for alternatives.

In the recent report of the World Bank on the most favorable locations for business professionals, Cyprus is ranked 54th out of 190 countries. In contrast, Greece is ranked 79th, making Cyprus one of the most attractive locations in the European Union for company incorporation.

Moreover, opening a company in Cyprus is not a demanding process; on the contrary, it can be done quickly and without special costs, while the entire process can be easily facilitated by professional service providers such as law firms.

If you are looking for information on starting a business in Cyprus and the immediate benefits that the country’s tax system will offer you, here is a short and practical guide to the five most important reasons that make Cyprus attractive for incorporation.

1. Low Corporate Tax

No entrepreneur does not seek a tax-friendly environment for his/her company. Cyprus has this comparative advantage.  For example, the corporate tax rate for Cypriot companies is 12.5%, while in Greece, the corresponding rate is 29%.

Therefore, the first and immediate benefit of starting a business in Cyprus is the low taxation rate, leading to a higher profit. Therefore, many Greek companies are now being transferred to Cyprus, setting up their parent company there and operating a subsidiary in Greece.

The first and immediate benefit of starting a business in Cyprus is the low taxation rate (12.5& vs. 29%), leading to a higher profit.

2. No Withholding Tax

According to the current regime, there is no withholding tax on dividends received by an EU subsidiary. In other words, no withholding tax is applied on dividends distributed by a parent Cypriot company to shareholders who are non-residents of Cyprus.

For example, suppose you are not a permanent resident of Cyprus. In that case, you can maintain a parent company here and enjoy the profits from your business activities without withholding tax on the distribution of profits. Additionally, there are no capital gains tax on the distribution of profits arising from the sale of securities – such as shares or securities – except profits derived from the sale of real estate located in Cyprus.

No withholding tax is applied on dividends distributed by a parent Cypriot company to shareholders who are non-residents of Cyprus.

3. Lower Social Insurance Premiums

Paying social insurance premiums is undoubtedly a big hoax for most professionals, who are required to pay large sums of money to the social insurance funds. However, in Cyprus, this is a minimal amount compared to other countries.

For example, when a Greek company pays 24.81% employer contribution to Social Insurance and an employee 15.75%, the corresponding amounts are only 8.3% participation for both parties in Cyprus.

Lower Social Insurance contributions are yet another reason companies elect to set up their operations in Cyprus. It is, however, essential to note that a Cypriot company and individuals who operate professionally in the country are required to pay a Special Defense Tax at a rate of 17% on dividends and 30% on interest. Still, non-residents of the country do not pay this tax.

When a Greek company pays 24.81% employer contribution to Social Insurance and an employee 15.75%, the corresponding amounts are 8.3% for both parties in Cyprus.

4. Lower VAT

With VAT at 19%, the fact that more and more foreign companies start their business activities in Cyprus is no surprise. VAT is applied on the supply of goods and the provision of services in Cyprus and goods imported from other EU countries. Compared with other countries, this rate is also significantly lower.

For example, Cyprus VAT is significantly lower than other countries, such as Greece, where the VAT rate is 24%.

The standard rate of VAT in Cyprus is 19%, compared with 24% in Greece

5. Better Banking System

Another factor that plays a critical role in the entrepreneur’s decision on the business’s location is, of course, the banking system. Cyprus holds a strong position in this regard as per the latest international rankings.

Among other things, the banking system in Cyprus presents comparative advantages in obtaining credit, paying taxes, protecting investments from minority groups, and the bankruptcy regime.

doing business in Greece

Conclusion

To conclude, opening a company in Cyprus is an easy process, which is supported by innumerable, measurable and immediate advantages making this country more and more attractive for foreign investment. Following the regulations and the European directive for parent companies, many professionals move their headquarters to Cyprus, enjoying lower taxes and significantly reduced insurance contributions. At the same time, most of their profits go directly to them and not to the state.

The above makes Cyprus one of the most favorable destinations in Europe for starting a company and developing commercial and business activities, and this undoubtedly can not go unnoticed by any experienced or even young entrepreneur.

Form your company in Cyprus

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Panayiotou Legal Rebrands to Support Business Founders in Cyprus

Panayiotou Legal Rebrands to Support Business Founders in Cyprus

Panayiotou Legal Rebrands to Support Business Founders in Cyprus

We are pleased to announce the successful completion of our firm’s rebranding. A project we embarked on to make Panayiotou Legal an even more customer-centric legal firm capable of addressing the real needs of business founders in Cyprus.

The complete rebrand of our firm embodies and re-enforces the core promise and stance of Panayiotou Legal which focuses on helping business owners secure their path to success by supporting their business from incorporation to full maturity and beyond. It is a direct response to more than four months of extensive audience and market research: we have interviewed international business founders to truly understand their needs and how we can improve and support their business in Cyprus.

Re-assessing Services and Processes

In listening to our potential and existing clients, we understood that the legal services should be more transparent, have less involvement from the Client, and most importantly, offer an authentic and business-minded approach to understanding and serving our Clients’ needs. These are the conclusions that have served as the base for reshaping our firm and our brand.

Over the last 40 years, we have accumulated a strong understanding of both our practice and our clients’ needs. With various industries rigorously adopting innovation and customer focus, it seemed natural to apply our knowledge and expertise and evolve our company further. Our goal was simple: listen to business founders and our clients, re-assess our service and processes, and create a customer experience tailored to serve specific customer needs and resolve their core pain points.” – Vassilis Panayiotou – Partner & Managing Director, Panayiotou Legal.

business founders in Cyprus
While specializing in a broad range of legal practices, we have clarified our service offering and our position in the Cyprus market. We saw a clear opportunity to be more focused, and in doing so, improve the overall client experience and satisfaction. We repositioned our services in line with the core needs of business founders looking to incorporate and run their companies in Cyprus.

Our new service structure is simplified and tailored to offer a one-stop-shop with the following services:

  1. Incorporation
  2. Banking
  3. Accounting 
  4. Corporate Governance
  5. Continued Legal Support & Advice

About the Project

Our rebranding project was subcontracted to a Cyprus-based agency, Brandble, specializing in B2B Brand Strategy and Marketing services. They did a great job by helping us re-discover our brand, clarify our company values and ultimately find new ways to serve our clients better. 

We enjoyed working with Panayiotou Legal on their project. It is always great to work with forward-thinking companies willing to look beyond the traditional approach, evolve around their customers and, in the process, re-discover themselves. It was a challenging project, which took close to four months to complete. Still, in this time, we feel that we expanded our knowledge and most importantly helped Panayiotou Legal to discover their true brand and find the best way to express it to the world” – Egle Joneliunaite, Alex Theodorou – Co-Founders of Brandble. 

As an experienced and long-standing legal firm, our journey does not stop here, and we have every intention to continue evolving together with our valued Clients and business partners. 

Reach out to us to see how we can help your business