European Union membership, competitive taxation, and an extensive double tax treaty network — a compelling jurisdiction for international holding, trading, and IP structures.
Cyprus combines European Union membership with one of the most competitive corporate tax regimes in the EU at 15% (raised from 12.5% from 2026). Its extensive network of double taxation treaties, sophisticated IP Box regime (effective rate of 3%), and non-domicile tax status for qualifying individuals create a powerful platform for international corporate structuring.
For clients with operations spanning the Gulf and Europe, Cyprus serves as a natural bridge — a jurisdiction that provides EU single market access while maintaining commercial and cultural proximity to the Middle East. Polaris maintains direct operational capability in Cyprus, enabling seamless coordination between UAE and European structures.
Answers drawn from the published rules of the UAE authorities and regulators. Each answer links to its official source. Last reviewed 25 October 2026.
15%. Cyprus raised its corporate income tax rate from 12.5% to 15% as part of the general tax reform that took effect at the beginning of 2026. The European Commission's Spring 2026 forecast for Cyprus records the increase, and Invest Cyprus's Tax Guide for Investment (February 2026) states that corporate tax on Cyprus tax resident companies is now imposed at 15% for each year of assessment. Older material still quoting 12.5% is out of date. We model the 15% rate in every Cyprus holding, trading or IP structure we propose, and we work with licensed local partners in Cyprus for registration and ongoing tax compliance.
Sources: Invest Cyprus (Cyprus Investment Promotion Agency) — Cyprus Tax Guide for Investment (February 2026); European Commission (Directorate-General for Economic and Financial Affairs) — Economic forecast for Cyprus (Spring 2026 Economic Forecast) (accessed 24 October 2026)
Cyprus grants an 80% deemed deduction on the qualifying profit from exploiting qualifying intangible assets, so only one fifth of that profit is taxed. At the current 15% corporate rate that is an effective rate of 3% on qualifying IP income (it was 2.5% when the headline rate was 12.5%). Qualifying assets must result from research and development; marketing-related intellectual property is excluded, and qualifying profit is calculated under the nexus approach, which ties the benefit to the R&D spending behind the asset. Before moving IP into a Cyprus company we test whether it qualifies and what share of the profit the nexus formula will actually cover.
Source: Invest Cyprus (Cyprus Investment Promotion Agency) — Cyprus Tax Guide for Investment (February 2026) (accessed 24 October 2026)
A Cyprus tax resident company that is funded with new capital can claim a notional interest deduction (NID) against its taxable profits, which narrows the tax gap between debt and equity funding. Invest Cyprus's Tax Guide for Investment (February 2026) states that the deduction is granted for new capital introduced into a Cyprus tax resident company and cannot exceed 80% of the taxable profits arising from that newly introduced capital. The NID matters where a UAE or other foreign shareholder capitalises a Cyprus subsidiary with equity rather than loans; we size the equity injection with the 80% cap in mind.
Source: Invest Cyprus (Cyprus Investment Promotion Agency) — Cyprus Tax Guide for Investment (February 2026) (accessed 24 October 2026)
As a rule, no. Invest Cyprus's Tax Guide for Investment (February 2026) states that no withholding tax is imposed on dividend, interest and royalty payments, whether or not the recipient is in a treaty country. The exception, in force since 31 December 2022, is withholding tax on certain outbound dividend, interest and royalty payments to entities in jurisdictions on the EU list of non-cooperative jurisdictions. Cyprus also has a double tax treaty network covering 68 countries, according to Invest Cyprus. This combination is what makes a Cyprus company useful as an intermediate holding or financing vehicle between the Gulf and Europe; we check the recipient jurisdiction against the EU list before any distribution is planned.
Sources: Invest Cyprus (Cyprus Investment Promotion Agency) — Cyprus Tax Guide for Investment (February 2026); Invest Cyprus (Cyprus Investment Promotion Agency) — Why Invest in Cyprus (February 2026) (accessed 24 October 2026)
A Cyprus tax resident who is not domiciled in Cyprus is exempt from Special Defence Contribution (SDC) on dividends, interest and rental income. Non-domicile status is used up once the individual has been Cyprus tax resident for at least 17 of the last 20 years, after which they are deemed domiciled. Under the 60-day rule you are tax resident in a year if you spend at least 60 days in Cyprus, do not stay more than 183 days in aggregate in any other country, are not tax resident elsewhere, carry on business or employment in Cyprus or hold an office with a Cyprus tax resident company, and maintain a permanent home in Cyprus by owning or leasing it. We map these tests against your UAE residence before you relocate.
Source: Invest Cyprus (Cyprus Investment Promotion Agency) — Cyprus Tax Guide for Investment (February 2026) (accessed 24 October 2026)
Registration runs through the Department of Registrar of Companies and Intellectual Property. The proposed name is approved first; a Cyprus-licensed lawyer then signs the statutory declaration (form HE1) and the memorandum and articles, which only lawyers licensed by the Cyprus Bar Association may prepare. The Registrar's published filing fee is €165 (€235 for a company without share capital), plus €100 if you want the accelerated procedure. Invest Cyprus states that registration is generally completed within a few days, after which the company registers with the Tax Department for a tax identification number and with Social Insurance Services. We coordinate the lawyer, the filings and the subsequent tax registrations through our Cyprus partners.
Sources: Department of Registrar of Companies and Intellectual Property (Cyprus) — Applying to incorporate a Company; Invest Cyprus (Cyprus Investment Promotion Agency) — Setting up a company in Cyprus (accessed 24 October 2026)
Every Cyprus company files an annual return (form HE32) with the Registrar, together with its financial statements. For a new company the first drafting date of the annual return is the day after eighteen months from incorporation, and each later drafting date falls one year after the previous one; the return must be filed within 28 days of its drafting date, with late-filing charges if it is not. The €350 annual company fee is no longer payable: the Registrar confirms it was repealed from 2024 onwards by the Companies (Amendment) Law 2024, published in the Official Gazette on 15 March 2024. We keep a filing calendar for every Cyprus company we administer with our local partners.
Sources: Department of Registrar of Companies and Intellectual Property (Cyprus) — When do I need to file an Annual Return; Department of Registrar of Companies and Intellectual Property (Cyprus) — Payment of annual fee (accessed 24 October 2026)
Yes, for eligible employers. Invest Cyprus lists companies of foreign interest operating in Cyprus, shipping companies, high-tech and innovation companies, pharmaceutical and biotechnology companies and publicly listed companies as able to employ third-country nationals under temporary work and residence permits of up to three years, renewable on expiry. Spouses of highly skilled third-country employees earning a gross salary of at least €2,500 a month have free access to the labour market, and a Digital Nomad Visa of up to three years is available to third-country individuals. Permits are issued by the Cypriot migration authorities, not by Polaris; we prepare the corporate side of the application through our Cyprus partners.
Source: Invest Cyprus (Cyprus Investment Promotion Agency) — Relocate your Business (accessed 24 October 2026)
Whether you are establishing a new venture, restructuring an existing enterprise, or exploring residency pathways — we are here to advise.
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