New Tax Incentives for Investments in Innovation and Start-ups in Cyprus
A new package of tax incentives to boost the start-up and innovative companies in Cyprus is expected to be presented to the Parliament in September.
The said package was approved by the Cabinet of Ministers on the 27th of July 2016 in order to boost and promote entrepreneurship and innovation in Cyprus.
What does this tax package includes?
- 50% tax exemption on investments in innovative and start-up companies. (capped to 150 000 EUR per annum).
The exemption can be applied to investments:
- made in an investment fund;
- made directly to a company managed either by a physical or a legal person.
The discount may be allocated and distributed up to five years later.
Furthermore, it is to be noted that the definition of a start-up has been amended to become broader:
According to the announcement made by Mr. Petrides, the Undersecretary to the President: “now it includes a wide range and is less limiting, allowing more substantive use by young businessmen who have innovative ideas which they can translate into entrepreneurship and commercial products”.
The package has been approved following intensive communications with the start-up community of Cyprus, taking into account practices that have been implemented successfully in other countries.
Cyprus has the potential to become a leading start-up hub in Europe: The construction of the science and technology park as well as the creation of tax friendly environment for investments in innovation and start-ups are within the frames of this objective.
Please note that the tax package will become effective upon approval of the Parliament.