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The economy in Cyprus
The Cypriot economy is a free-market economy mainly based on services and manufacturing. On an international level, Cyprus is promoted as a bridge between the East and the West and boasts an educated and skilled workforce and relatively low corporate costs. Cyprus is also among the most prosperous countries in the Mediterranean area. The success of the island’s economy relies on the market-oriented economic system and the flexible corporate legislation allowing foreign investors to set up companies in Cyprus.
Trading is very important for the economy and Cyprus’ main trading partner is the European Union. Cyprus exports packaged medicines and foodstuff to EU countries in principal and imports fuel, machinery and vehicles from its main trading partners.
Export and import regulations in Cyprus
Foreign companies exporting goods to Cyprus are applied the same regulations as in any other EU country. However, there are certain products that require import licenses or permission when imported to Cyprus. Products imported from non-EU countries for which import duties and taxes have been paid in another EU member state are not applied any customs duties when released on the Cypriot market. The only tax to be paid in Cyprus is the value added tax. Individuals or companies importing goods from other countries are required to register with the Customs Register for clearance procedures.
When arriving in Cyprus, the company or individual must submit an electronic declaration (a Single Administrative document) in the Theseas electronic import system. Other required documents when importing goods into Cyprus are invoices, licenses and certificates depending on the merchandise.
For complete information about import and export regulations you can rely on our lawyers in Cyprus.
Why choose Cyprus as a trading partner?
Cyprus is a regional trade and logistics network allowing Cypriot trading companies many benefits. Non-EU companies exporting goods through Cyprus in other EU member state are supplied with the Onward System Relief (OSR) that allows the VAT to be deferred in Cyprus. The Outward Processing Relief, on the other hand allows EU and Cypriot companies to export their goods to a non-EU country for a limited amount of time and claim duty relief when re-importing of the same goods. The Inward Processing Relief allows EU companies to obtain import duties and VAT relief when importing products from non-EU countries, if the products are intended for re-export to non-EU countries.
For more details about the advantages of trading activities in the island or need assistance in setting up a trading company please contact our law firm in Cyprus.