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NEXORACYPRUS

Industry Guide

Cyprus for Independent Consultants

Run your consultancy through a Cyprus management company — 12.5% CIT, IP Box on any software tools you develop, and a simple structure that works for solo operators and small firms.

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Key Advantages

Why Cyprus for Consultancies?

12.5% CIT on Consulting Fees

Consulting income, advisory retainers, and project fees received by a Cyprus company are taxed at 12.5% CIT — dramatically lower than personal income tax rates in most European countries.

IP Box on Proprietary Tools

If your consultancy develops proprietary software, frameworks, or analytics tools used in client delivery, qualifying income may attract the 2.5% IP Box rate.

0% Dividend SDC as Non-Dom

Consultants who establish Cyprus non-dom tax residency extract profits via dividends at 0% SDC — a highly efficient extraction mechanism for high-earning professionals.

Management Company Structure

A Cyprus management company can provide services to clients globally. With appropriate economic substance, management and consulting income qualifies for the 12.5% CIT rate.

50% Income Tax Exemption

Non-EU individuals taking Cyprus employment at over €55,000 salary may qualify for a 50% income tax exemption for up to 17 years — useful where drawing a salary alongside dividends.

Simple Structure, Low Overhead

A single Cyprus Ltd is all most consultants need. Minimal share capital, remote formation, and straightforward annual compliance at a low fixed cost.

At a Glance

Key Tax Numbers

12.5%
Corporate Income Tax
On consulting and advisory income
2.5%
IP Box Rate (Software Tools)
On qualifying IP income
0%
Dividend SDC (Non-Dom)
Profit extraction via dividends

The Process

How It Works

  1. Incorporate your Cyprus Ltd

    Form your management company with objects covering consulting, advisory, and IP licensing. Remote formation in 5–10 working days.

  2. Establish substance and banking

    Open a Cyprus corporate bank account and put management and control arrangements in place — key for supporting tax residency claims.

  3. Structure IP if applicable

    If you have proprietary tools, methodologies, or software, structure their ownership within the Cyprus company to access the IP Box regime.

  4. Ongoing compliance

    Annual audited accounts, CIT return, VAT (if applicable), and personal tax return if you are Cyprus tax-resident. Fixed-cost packages available.

FAQ

Frequently Asked Questions

Will HMRC or other tax authorities challenge a Cyprus consultancy structure?
A Cyprus company with genuine economic substance — real management and control exercised in Cyprus, local directors, board minutes, and a Cyprus bank account — is a legitimate structure. Substance requirements must be met; our team advises on this from the outset.
Do I need to charge VAT to my consulting clients?
If your clients are B2B and located outside Cyprus, the B2B reverse charge rule typically means VAT is not charged on cross-border services. B2C clients may require OSS registration. We review your client mix and advise on VAT obligations.
Can I use a Cyprus company if I am still tax-resident in the UK or Germany?
Yes, but the CIT benefit accrues at the company level. Personal tax obligations in your country of residence continue to apply to salaries and dividends you receive. Proper planning of your personal tax position is essential.
What is the minimum annual cost to run a Cyprus consultancy company?
Annual compliance (accounts, CIT return, company secretary, registered office) typically costs €2,500–€4,500 per year depending on complexity. Formation costs start from €1,150.

Related Services

Services relevant to Consultancies businesses

Company Formation →IP Box Advisory →

Ready to set up your Consultancy company in Cyprus?

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