Cyprus Offshore Activities

The natural bonding of the Internet and Offshore stems from the fact that both, of their nature, manage to avoid tax. Businesses which can operate on the Internet without, so to speak, touching ground in a high-tax jurisdiction will naturally migrate to offshore jurisdictions; while business that already have offshore existence will find it highly convenient to be able to use the Internet to trade with their high-tax customers without having to make a landing in their countries.

As a major offshore jurisdiction with tens of thousands of offshore enterprises already installed, including many trading companies, it is only a matter of time before Cyprus becomes a centre of e-commerce activity. The island’s geographical location, its good telecommunications links and its sophisticated business infrastructure add to the inevitability of an e-future for Cyprus.

The effective abolition of Cyprus’s offshore regime as a consequence of its entry to the EU, and the introduction of a uniform 10% rate of corporation tax may impact the attractions of Cyprus as an e-commerce base as compared with truly offshore jurisdictions. It remains to be seen whether the island’s EU connections, tax treaties and advanced infrastructure are enough to compensate for this effect.

Published by Lowtax.net