Cyprus as an Alternative for Greek Entrepreneurs
This article was originally published on LinkedIn by Vassilis Panayiotou, Managing Partner of Panayiotou Legal.
While it has become apparent that the country’s inconsistent and non-business-friendly taxation system is straggling local businesses, it comes as no surprise, that the country’s weak economic position and a number of fruitless attempts at reform by an ineffective bureaucracy, has forced Greek companies to seek alternative jurisdictions in which they can operate their businesses.
Unsurprisingly, over the past few years, our firm has been regularly receiving requests from Greek entrepreneurs who wish to exploit the use of Cyprus registered entities, to mitigate or even completely eliminate the overall tax liability of their Greek companies. The extensive network of Cyprus’ double-taxation treaties, the existence of a tax sparing clause between the two countries, the lack of thin capitalization rules and the flexibility of structuring investments through a combination of equity & debt are some of the many tools at one’s disposal to achieve this. But it seems that the island’s beneficial tax system is not the only reason behind the exodus of companies from Greece and into Cyprus.
Retail and Distribution Sector
Companies in the Retail and Distribution sector have been flooding into the island as they wish to exploit the island’s favorable geographical location and utilize the country’s position as a trading point for the Mediterranean, North African, and Middle East areas. The ease and speed at which a company can be set up and have its operations up and running is also a critical factor. A company can be incorporated in Cyprus in approximately 10 working days, whereas acquiring an Economic Operators Registration and Identification (EORI) number, can be obtained in a matter of a few days. The EORI number is assigned to Cypriot importers and exporters and is used for processing entry and exit declarations with the Customs authorities for shipments in and outside the European Union.
It should also be noted that non-resident businesses are allowed to maintain, store, breakbulk, or re-package their own transit products in warehouses in Cyprus, as long as the handling does not involve any variations in the customs tariff classification.
Culture and Language
For the reasons mentioned above, Cyprus has been transformed into one of the most attractive solutions for Greek Entrepreneurs. If you are an entrepreneur yourself and are thinking of expanding or moving your business operations from Greece to Cyprus, feel free to send me a message on LinkedIn, and I would be happy to discuss your options.
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