In recent years the real estate market in Cyprus experienced a remarkable boom. Government investment schemes in Cyprus, including property taxation and investment incentives, appear to be at the center of this notable rise.
Growth in the Cypriot real estate atmosphere is, in turn, driving the nation’s entire economy to recovery. It is happening for the first time after growth was recorded in the first quarter of 2015. This happened contrary to the European commission’s projections, which predicted a 0.5% shrink in 2015. Cyprus has gone on to witness continuous growth over the years with the promise of even more to come.
More recently, the small island nation located in the Eastern Mediterranean continues to attract international buyers in ever-increasing numbers. Far from being only because of its unique weather, cuisine and fabulous beaches, affordable property prices, relative ease to acquire citizenship, advantageous tax regimes for non-national investors, among many other reasons contribute.
There was a 20% increase in sales contracts across Cyprus in the first half of 2017. Sales transactions increased spectacularly by 46% in February 2018 with a later increase by 29% in April.
Here are some of the government’s encouragement schemes on direct investments in Cyprus over the years.
ATTRACTIVE TAX REGIME AND INCENTIVES
To lift itself from the economic decline it experienced during much of the period before 2015, Cyprus’s government had to establish a property tax atmosphere that has succeeded in revitalizing the nation’s general investment appeal. Some of the measures taken in this direction regarding the government investment schemes in Cyprus include;
– One of the lowest corporate taxes across the EU at 12.5%
– An attractive Double Tax Treaty network which covers over 60 countries
– Access to every single EU Tax Directive
– Reduced residential and commercial property tax rates (VAT). Commercial property in Cyprus attract a 19% VAT tax rate, meanwhile, residential property only attracts 5% on the first 200square meters of the first and primary permanent residence property.
– Dividend income exemption based on relaxed conditions
– Tax exemption on capital gains and gains from trading in securities
– Tax neutrality on Foreign Exchange Gains
– No inheritance or succession taxes
– No withholding taxes on outgoing dividends, interest or royalty settlements
– National deduction available for equity investment into companies in Cyprus.
– Very attractive personal tax regime for international professional and individuals not resident in Cyprus.
– No immovable property taxes.
– Specially tailored provisions for the investment funds industry
– Competitive Intellectual Property Regime
– Competitive Tonnage Tax for Shipping companies and an open registry approved by the EU.
– Tax deductions to encourage investment into Cypriot startups.
These tax incentives and a lot more have contributed to re-establish Cyprus as a modern, cosmopolitan, and transparent business center with tons of investment opportunities across a wide range of sectors.
Government Investment Schemes in Cyprus: PERMANENT RESIDENCY
The residency visa that is valid for life is granted within two months and covers the applicant’s entire family from both the principal applicant and his/her spouse to the dependent children who are up to 25 years old.
A spouse and dependents can succeed in the residency permit. Lastly, the investment can be made into two properties maximum, provided they sum up to the €300,000 minimum.
EFFORTS IN OTHER SECTORS
With tremendous efforts in Education (excellent education facilities including many UK universities having campuses on the Island), healthcare facilities, banking, shipping, science and technology, privatization and liberalism, etc., the atmosphere has never been this conducive for investments in Cyprus.
Cyprus currently has the lowest crime rate among European countries and is known to be the world’s 5th safest nation. Its strategic location at the crossroads of Europe, Africa, and Asia is now being taken advantage of as it returns to the list of top European FDI (foreign direct investment) destinations.
The government is even working towards joining the EU Schengen zone soon and the Island’s improved economic outlook and steady rise in tourist numbers continue to boost sales and direct investments in the property market.