Mundo’s Country Rating (Out of 10)

Mundo’s country rating is essentially a freedom index whereby our team of specialists rate a combination of freedoms which include freedom from violence and personal attacks, financial freedom from high taxes, business freedom from government interference and especially from socialism and communism.

Political stability: 9

Cyprus is a stable democratic country with a center-right, pro-business government. President Nicos Anastasiades has won two consecutive elections and conducted most of the business-friendly reforms that turned Cyprus into such an attractive investment location. The country is well-known for its fully transparent legal principles based on the common law system, an inheritance of the British rule. Even as the island allows offshore companies and has a friendly tax system, it is completely harmonized with EU and international standards.

As we said before, the northern part of the island is controlled by Turkish Cypriots, which operates as an independent political entity, even though it is not recognized by any other country but Turkey. All attempts for reunification have failed thus far, but tensions are reasonably low and won’t destabilize the island or its political system. 

The leading cause of concern is the largest party in the opposition, the AKEL, which is a hard-left party that has proposed nationalizations, tax increases, and an expansion of the welfare state. However, they were in power when the financial crisis started, and the economy has risen again. That means the left doesn’t seem to be a threat in the short term.

Personal safety: 10

Cyprus is one of the safest countries in the world, with one of the lowest crime rates on the planet, and they are generally limited to petty crimes such as pickpocketing and bag snatching. Mugging and violent crimes are almost non-existent, at least in the southern part of the island (the one controlled by the internationally recognized government).

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Lifestyle: 10

Cyprus is a top destination. It’s great for business, it’s great for living, it’s great for tourism. 70 % of the population speaks English, half of the population has tertiary qualifications, and it is a beautiful country with some of the best beaches you’ll ever see and a 10,000-year-old culture. 

It has a young, dynamic population that is incredibly welcoming of foreigners. Doing business in the country is simple, and even if the island is somewhat small, you won’t get bored. It has an incredible nightlife, a ton of sports and outdoor attractions, archeological sites from its ancient Greek past, and much more. Even as the country has sold itself as a year-long touristic destination, the country isn’t asphyxiated by tourists. Cyprus is the hidden gem of the Mediterranean.

Taxation: 10

Cyprus offers fantastic tax optimization opportunities for foreigners. Its non-dom program gives you an excellent opportunity to obtain a tax residency in one of the countries with the lowest corporate tax rate in the EU, at just 12.5 %. And the process isn’t excessively bureaucratic or expensive. Individuals with non-dom status in Cyprus have the right to do business through offshore companies, which gives them plenty of flexibility to manage tax-optimized companies and bank accounts in the country. The best part: as the country has double taxation treaties with more than 60 countries, including most of the West, you have one less issue.

Personal income tax rates are somewhat higher (progressive taxes up until 35 %). However, the country offers plenty of tax credits and exemptions for expats with a tax residency in Cyprus, which still makes it quite attractive and way lower than the rest of the EU countries.

Also, there are no taxes on dividends, and profits from disposal of securities, capital gains (under certain conditions), or withholding taxes. There are also incredible tax credits and incentives for new investments and investment funds. Cyprus is a great choice to keep your money safe and optimize your taxes.

Investment Potential: 10

Cyprus investment potential is infinite. After the 2013 financial crisis, the government understood it needed to let the free market take its course and make serious pro-business reforms to give investors renewed confidence. And they have acted accordingly. Those reforms have led to a fantastic wave of foreign investment in the island in many different areas. Shipping, tourism, and financial services have seen an exponential development in the last few years thanks to those reforms, and the growth will continue thanks to the strong and constant 4 % growth of the Cypriot GDP in the last few years.

The citizenship and permanent residency programs have also led to an influx of fresh foreign investment and the pro-business reforms of the financial services sector have made that Cyprus has started seeing investment from new countries such as China, Japan, and India. Add that to the fact that the country has an incredibly attractive tax system with a 12.5 % corporate tax rate, plenty of tax credits and exemptions, and double tax treaties with more than 60 countries, and you’ll see why it’s seen this influx of investment.

The country has a reliable and transparent legal system, and its tax and banking regulations are in full accordance with EU and international standards. More than 70 % of the population speaks English and half of the population holds a tertiary degree, meaning the public and the service sectors are full of aptly prepared individuals eager to receive foreign investors.

TOTAL: 49 (out of 50), AAA.

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