Intellectual property

• Copyrights, which may take any of the following forms: literary works, dramatic works, musical works, scientific works, artistic works, sound recording, films, broadcasts, published editions, databases, publications, software programmes
• Patented inventions
• Trademarks (and service marks), designs and models that are used or applied on products

The above is a non-exhaustive list.

Intellectual Property  (IP) can be one of the most valuable assets of an organisation. Choosing the right location for the centralisation and management of IP is a very important strategic business decision. The ideal location to establish an IP structure is one that can serve the organisation’s business strategies/model, safeguard and protect its IP and contribute to its tax optimisation.

Cyprus an efficient tax EU Intellectual Property (IP) location

Cyprus offers a very competitive and attractive IP tax regime coupled with the protection afforded by EU Member States and by the signatories of all major IP treaties and protocols.

As from 1 January 2012 profits from the use or sale of IP will be reduced by 80% (i.e. be tax exempt) before being taxed at the flat corporate income tax rate of 12,5% which is the lowest in Europe. This brings the effective tax rate on IP income to less than 2,5%.

For an IP owning company: As from 1 January 2012 the acquisition or development cost of an IP will be amortized by 20% per annum (i.e. 5 years straight line depreciation for tax purposes)

For an IP company involved in back-to-back licensing arrangements: Where an IP is licensed to the Cyprus company and in turn the Cyprus company sublicenses it, thin (small) spreads are accepted.

Registrable IP does not need to be registered in Cyprus to benefit from IP regime in Cyprus; it may be registered anywhere in the world but though a Cyprus company (i.e. the Cyprus company will be the registered holder of the IP).

Cyprus is an international financial centre with a stable tax regime where the tax system approved and compliant by EU and OECD.
Cyprus has excellent double tax treaties with certain non-EU countries (e.g. Russia, Ukraine, India, South Africa) and elimination or significant reduction of foreign withholding tax on receipt of royalties from other countries. This is achieved through access to benefits of double tax treaties or EU Directives.

How we can help:

• Set up Cyprus IP holding structure
• Advise on Corporate Statutory Compliance matters