Sergey Kartashov: Cyprus improves as a favorable place for IT business in Europe

Sergey Kartashov (SergejsKartasovs), the CEO of asset management company Generation Partners LTD, expressed his views on the current position of Cyprus in the field of European IT business. The island has become an attractive place for the relocation of companies. As the office of Generation Partners is located in Cyprus, the company knows all details related to the local jurisdiction.

Sergey Kartashov (SergejsKartasovs), the CEO of asset management company Generation Partners LTD, expressed his views on the current position of Cyprus in the field of European IT business. The island has become an attractive place for the relocation of companies. As the office of Generation Partners is located in Cyprus, the company knows all details related to the local jurisdiction.     

If a company wants to do business with freedom in Europe, then it should relocate to Cyprus. Cyprus is classified as the best jurisdiction in the European Union (EU) by financial experts. There are huge benefits for the businesses on the island including a simple company registration process, an easy regulatory reporting system, and tax relief.

The island is one of the countries in the EU that have introduced the IP-Box regime. The IP-Box allows the companies to pay tax on only a part of their profit in the field of intellectual property development and modernization. So, Cyprus is a good place for IT businesses to relocate.

Taxation System in Cyprus
One of the major things that make Cyprus attractive for the relocation of companies is its taxation system. It offers one of the lowest income tax rates in the EU to the companies. There is no tax on the transference of dividends from a Cypriot company to any other financial entity or foreign account. There is no tax on selling products or services to the non-EU residents. There is only a 9% value-added tax (VAT) on selling products or services to the EU-residents. Moreover, a company has to pay as low as 2.5% tax on earnings in Cyprus. In some cases, there is no tax on earnings as well. These tax benefits make the island a favorable place for the relocation of the business.

Deoffshorization
Since joining the EU in 2004, Cyprus has been continuously working on getting rid of its offshore reputation. The company has recently introduced an anti-money laundering legislation. Generation Partners noted that the new reputation of Cyprus helped the company to attract large international companies in the past few years. “Today, the island receives serious investments in its economy and infrastructure, and every year, it strengthens its reputation as a major business hub,” explained Sergey Kartashov (Sergejs Kartasovs).   

The companies are required to create or improve intellectual property products in Cyprus. They must have to ensure their physical presence on the island. Otherwise, they will face serious consequences. Sergey Tokarev warned, “If local officials expose that the presence of the company in Cyprus is fictitious, the company may face serious problems.” These deoffshorization steps helped the company to become an IT business mecca from an offshore country.

Business Drawbacks
There is nothing perfect in the world. Cyprus is also having some pitfalls related to the relocation business. The new businesses on the island find it difficult to open a bank account. Due to the anti-money laundering procedures, a business owner must have to declare its sources of income in the bank account application. The bank officials review the application carefully before permitting the account opening. “The issue can be called a problem only partially. In fact, this approach helps to attract large net capital to the country,” noted Sergey Kartashov. The Generation Partners CEO hoped that the new reputation of the island would transform its economy. Ireland, the UK, Malta, and Estonia are also doing great in the EU to provide favorable business environment.