The Republic of Cyprus is a sovereign state island with a presidential government system located in the Eastern Mediterranean. On 1 May 2004 the Republic joined the European Union. Tourism is one of the main sources of income for the country.
An offshore regime for International Business Companies was operational in the Republic of Cyprus after 1 January 1977 but it ceased to exist the moment the Republic entered the EU on May 01, 2004.
Despite the fact that Cyprus is not now an offshore jurisdiction, Cypriot companies are very attractive for tax planning purposes, as the country has favourable tax laws. This is due to the fact that Cyprus has one the lowest rate of corporate taxation at 12,5% in EU. In addition, Cyprus has an extensive network of double taxation treaties with regard to such types of income as royalties, interest and dividends.