Cyprus: An Emerging Hub for Israeli Businesses
Cyprus is increasingly becoming a favoured destination for Israeli businesses and property buyers. Its close proximity to Israel, affordable living expenses, and strategic location make it an attractive option for Israeli companies looking to expand. This trend has been further accelerated by the recent geopolitical tensions and conflicts in Israel, prompting many Israeli startups and enterprises to consider relocating their operations to Cyprus.
The Growing Appeal of Cyprus for Israeli Businesses
In the summer of 2023, a significant study indicated that about 70% of Israeli startups were moving portions of their operations outside of Israel due to the proposed judicial reforms. The onset of war has only heightened this trend, with many Israeli businesses looking to Cyprus as a nearby haven that offers numerous advantages, including a favourable tax system and the ease of hiring foreign workers.
Cyprus is appealing not just for its geographical proximity but also for its conducive business environment. Unlike Israel, Cyprus makes it simpler to hire foreign workers, such as software engineers from non-EU countries, which is a significant advantage for tech companies. Moreover, Cyprus has established itself as a centre for technical innovation and startup activity, albeit on a smaller scale compared to Israel, which is renowned as the “Startup Nation.”
Advantages of Relocating to Cyprus
Tax Benefits:
Intellectual property-holding IT organisations can benefit from an effective tax rate as low as 2.5%
The corporate tax rate is a competitive 12.5%.
There is no dividend tax, making it profitable for shareholders.
Personal income tax rates range from 0% to 35%, depending on specific factors.
Capital gains and share sales are taxed at zero percent.
EU Passport Opportunity: Relocating to Cyprus offers the potential to obtain Cypriot citizenship, allowing one to gain an EU passport after four years of residency.
Business-Friendly Environment: Cyprus offers a stable business environment with limited government intervention and a non-interventionist policy, allowing businesses to operate with minimal interference.
Active IT Communities: Cyprus hosts vibrant IT communities such as CypRus IT, IT Hub, TechIsland, and Founders CY, providing excellent networking opportunities and fostering innovation and collaboration.
Safety and Security: Cyprus boasts a low crime rate and ranks 30th out of 129 countries globally for safety, making it a secure location for both individuals and businesses.
Quality of Life: With an all year - round sunny climate and beautiful Mediterranean beaches, Cyprus offers an unparalleled work-life balance.
Steps to Relocate Your Business to Cyprus
Company Registration: The Cyprus investment authorities have developed a streamlined process through the Business Facilitation Unit (BFU) to help companies and their employees relocate and register quickly.
Bank Account Opening: Setting up a bank account is crucial for financial activities, and Cyprus provides clear instructions to facilitate this process.
Residence Permit Registration: Owners, management, and staff must register their residence permits to legally stay and conduct business in Cyprus.
Team Relocation and Adaptation: Once the preliminary steps are completed, focus on relocating and adapting your team to the new environment.
Conclusion
Amidst the growing tensions in Israel, Cyprus presents itself as a viable and strategic option for Israeli businesses looking to relocate. With its favourable tax regime, ease of doing business, active IT communities, and high quality of life, Cyprus offers a promising, safe, and business-friendly environment for Israeli companies seeking a fresh start.
For tailored advice and legal support on real estate matters, please contact Klitos Platis by email at klitos@kleanthousplatis.com.
The content of this article is valid as of the date of its first publication. It is intended to provide a general guide to the subject matter and does not constitute legal advice. We recommend that you seek professional advice on your specific matter before acting on any information provided. For further information or advice, please contact Klitos Platis by email at klitos@kleanthousplatis.com.