For entrepreneurs, choosing a place to live may come with significant implications for their tax obligations, with the potential to result in a substantial difference in tax payments. Depending on the selected location, you may eventually find yourself paying up to 5 to 10 times more in taxes if you don’t choose wisely. While the image of distant tropical islands and beachside coconut trees is tempting, some of the world’s most advantageous tax haven states are surprisingly close at hand.
European states as entrepreneur havens in 2024
In Europe, several countries are appealing tax havens in 2024, providing companies and entrepreneurs with strategic advantages to mitigate the impact of taxes. These European tax havens offer a practical solution for individuals seeking to optimize tax positions and keep a more substantial portion of their earnings to themselves.
Understanding what a tax haven actually is appears crucial. These jurisdictions offer low or no taxes coupled with a high level of confidentiality. As of 2024, they attract individuals and companies looking to improve their financial standing and shield assets from external scrutiny. Yet, while tax havens come with lower tax burdens and higher after-tax profits, they also imply risks, including international scrutiny, sanctions, and damage to business reputations.
Cyprus as a low-tax hub in 2024
Once labeled a tax haven, Cyprus changed its tax legislation after joining the EU. Reforms were initiated to align with Eurozone standards and deal with the financial crisis of 2013. Eventually, Cyprus has transitioned into a low-tax jurisdiction with several enticing features:
- Low and flat corporate tax rate of 12.5%, among the lowest in the EU and globally.
- Comprehensive network of double taxation treaties with over 60 countries, minimizing withholding taxes on dividends, interest, and royalties.
- Compliance with EU directives on taxation, fostering ease in cross-border transactions within the union.
- Flexible and favorable tax residency criteria for individuals and companies.
- Efficient banking system offering diverse services and products.
In 2024, this is what you can do to reap the benefits of the Cyprus tax environment, whether you’re an individual or a company:
- Incorporate a company online with a minimum capital of EUR 1.
- Obtain your TIN and a VAT number for the company.
- Open a bank account remotely with a minimum deposit of EUR 500, providing necessary documents.
- Appoint local directors and secretaries to ensure confidentiality through nominee services.
- Maintain a registered office and a physical presence through virtual office services.
By following these procedures, you will benefit from the advantages of the Cyprus tax environment to the max, including access to the EU single market and free movement of capital, goods, services, and people within the EU.
Strategic brilliance: How Cyprus smartly uses tax advantages for global trade
You may ask us what makes Cyprus offer such generous tax exemptions to international businesses. The answer is simple, it is just smart and brings money to the national economy.
A small country sitting in a strategic place, Cyprus is currently not self-sufficient and needs to trade globally. It has to be competitive. Mind you, countries are always competing, and not only in the Olympics.
Foreign capital and businesses help any national economy grow, earn, and live better. The international financial services industry creates jobs, careers, and income for many people. It also boosts demand for professional services, commercial estate, communications, software, and other supplies. This revenue benefits all economic sectors.
Pay low taxes and live your dream
Would you like to permanently live in sunny Cyprus and pay low taxes? As of early 2024, you have three ways to achieve the goal:
- Invest a minimum of EUR 300,000 in the Cypriot economy (real estate, securities, or business), with income from outside Cyprus.
- Apply for an immigration permit as a highly qualified professional, financially independent person, or entrepreneur.
- Reside in Cyprus with a temporary residence permit for at least five years.
To qualify as a tax resident in Cyprus, meet one of these criteria:
- Spend over 183 days in Cyprus in a calendar year.
- Diligently stick to the 60-day rule by spending at least 60 days in Cyprus, not being a tax resident elsewhere, and having specific Cyprus ties like a business, job, or property.
Establishing a company to enjoy Cyprus tax haven benefits may be just the start for you. If you’re considering permanent relocation, you’ll need to address lots of other aspects. But don’t worry, International Wealth has you covered. Our experts will help you with everything you need. Simply explore our services and get the best advice for your situation!