There are now fewer than 30 working days until the Transitional Period for Brexit is due to come to a conclusive end. The transition (sometimes called the implementation period) will end on the 31 December 2020; It cannot be extended beyond this date.
Time is running out for the UK, more specifically in regard to the legal framework not being concise enough as of yet but also due to the fact that EU countries have very much been left in the dark when it comes to contracting with the UK.
In this briefing, we attempt to provide in short what British nationals would need to consider and the options they have, especially if they have or are thinking of setting up a business in an EU country. With this in mind and the potential of a no-deal Brexit looming, British businesses could benefit from transferring their businesses to Europe and if so, why not in Cyprus.
Moving to Cyprus!
- Michael Barnier, the EU Chief Negotiator for Brexit, stated in one of his speeches in September 2020, that financial services will lose the benefit of the EU’s ‘financial passports.’ Relocating these services to Cyprus could prove beneficial to these companies as they do not have to navigate the confusing legal and business dimensions that will inevitably arise in this regard, once the UK leaves the EU.
- Cyprus’ geographic location is ideal for most businesses. More specifically, it is easily reachable to and connected to London and linked to the international capital markets. This is worth bearing in mind since the EU has already indicated that UK investment companies that do not set up a branch or subsidiary in the ‘bloc’ (i.e. within Europe) will lose access to most EU markets.
- The country’s financial stability throughout the years has been on a steady and strong incline. Even through the COVID-19 pandemic, businesses, such as financial services and multinational corporations, are and have still been able to stay open and continue bringing in revenue; as opposed to the less fortunate EU Member States and the UK, who have had to anticipate and conduct a full national lockdown, affecting all financial and business sectors alike.
- Cyprus offers a lower risk of tax rises and an easier navigation of the taxation system.
- Cyprus offers certain tax advantages to both natural persons and legal persons. Emphasis is given to the relatively low income/corporation tax; low capital gains tax, no tax on sale of shares (provided certain criteria are met). Cyprus offers expatriates a plethora of beneficial tax environments, ranging from income, investments and UK pensions.
- Individuals are subject to certain tax exemptions provided that they are resident in Cyprus but non- domiciled in the Republic for a maximum of 17 years. More specifically the new “non-dom” rules provide that individuals who are not domiciled in Cyprus, will be exempt from payment of the special defence tax on dividends, interest and rental income, even though they may be Cypriot tax residents. This exemption will apply to income even if derived from sources within Cyprus.
- The Cyprus legal system follows the English legal structure and court procedures are very similar to those of the English system. Moreover, most laws have been officially translated into the English language. Lastly, a widespread use of the English language is used in Cyprus.
Our Firm is in a position to assist UK nationals with anything they may require, from applying for residence permits to setting up a business in Cyprus. For more information and/or queries, please do not hesitate to contact us at firstname.lastname@example.org.