Stefan Nolte notes rise in British companies relocating to Cyprus

There has been an increase in British companies inquiring about moving their UK-based businesses to Cyprus, mainly prompted by their country’s high tax burden and bad weather, according to Stefan Nolte, Managing Director of SHANDA CONSULT (Cyprus).

He also notes, however, that while Cyprus is already establishing itself as a hub for the IT sector - contributing over 8% to the country’s GDP - there is still work to be done in transitioning to a fully digital, streamlined e-government system.

SHANDA CONSULT is an international consulting firm based in Nicosia, with a wide network of trusted partners in the European Union, the Mediterranean, Middle East and Asia. 

Has there been an increase in British companies contacting Shanda Consult about relocating their headquarters to Cyprus?

Yes, particularly over the past two years, we have witnessed a significant rise in inquiries from UK-based businesses and individuals considering relocation to Cyprus. This trend includes UK companies moving their headquarters, British entrepreneurs establishing new businesses on the island, and UK nationals - especially retirees - choosing Cyprus or other Southern European destinations after living abroad for many years.

A key factor behind this migration is the desire to be closer to one's roots as people age. However, many of them opt against returning to the UK due to two primary reasons: the high tax burden and the less favourable climate.

Why do you believe this is happening? What makes Cyprus such an attractive relocation destination?

Cyprus offers a compelling combination of benefits for both businesses and individuals. From a corporate perspective, the country boasts a competitive corporate tax rate of just 12.5%, no capital gains tax on the disposal of securities, no withholding tax on dividend distributions to non-resident shareholders, and significant tax exemptions for individuals benefiting from the Cyprus non-domicile tax status. These factors create a highly attractive financial environment.

Beyond tax advantages, Cyprus provides an excellent quality of life. The island enjoys a low crime rate, a pleasant Mediterranean climate, a rich cultural heritage, and access to high-quality yet affordable local food. Additionally, real estate remains competitively priced compared to the UK and other European countries, making it an appealing destination for relocation.

What improvements could Cyprus make to attract and retain more businesses?

Although progress is being made, Cyprus must further enhance its digital infrastructure and governmental e-services to remain competitive. Bureaucracy remains a challenge, often causing delays in administrative processes. Key legislative aspects require modernisation, such as eliminating the reliance on wet-ink signatures and paper-based document submissions.

While Cyprus is already establishing itself as a hub for the IT sector - contributing over 8% to the country’s GDP - there is still work to be done in transitioning to a fully digital, streamlined e-government system. Addressing these issues would not only attract more businesses but also ensure that those already here can operate efficiently and continue to thrive.