Cyprus has been an independent democratic republic since 1960, with the president being the highest representative of the country. It has a surface area of 9,251 km2 and is the third largest island in the Mediterranean after Sicily and Sardinia. The capital of Cyprus is Nicosia.
Its population of nearly 802,500 consists of 85% Greek Cypriots and 12% Turkish Cypriots. The political and ethnical division came after the Turkish invasion in 1974. Currently the island is divided into two parts and since 2004 has been a member of the EU. This involved a number of changes in the form of restructuring its tax regime and harmonizing with EU directives.
In 2008 the Cypriot pound was replaced by the Euro, which became the official national currency. The country’s legal system is based on common law.
The official languages are Greek and Turkish, though English is widely authorities, which facilitates communication with foreign businesspeople.
The income tax for residents and non‐residents is 12.5% and further advantages for tax optimization are available under the 47 Double Taxation Treaties concluded by Cyprus and from EU directives on the taxation of holding companies.
During the spring of 2013, Cyprus was hit by a banking crisis and subsequent economic problems. Despite this, the corporate and tax system of Cyprus have not been affected and Cyprus holds its position as the most advantageous EU jurisdiction for international tax planning purposes.