LOW TAX COUNTRIES
Andorra
Anguilla
Antigua & Barbuda
Aruba
Australia
Bahamas
Barbados
Belize
Bermuda
British Virgin Islands
Cayman Islands
Cook Islands
Costa Rica
Cyprus
Dominica
Dominican Republic
Gibraltar
Hong Kong
Isle of Man
Jersey & Guernsey
Liechtenstein
Luxembourg
Malta
Mauritius
Panama
Singapore
St.kitts & Nevis
Switzerland
Turks & Caicos
Vanuatu
Index of Articles
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CYPRUS
About Cyprus
The third largest island in the Mediterranean Sea (after Sicily and Sardinia),
Cyprus is geographically situated in the eastern Mediterranean and just south of the Anatolian peninsula (or Asia Minor) of the Asian mainland; thus, it is commonly included in the Middle East (see also Western Asia and Near East). Turkey is 75 kilometres (47 miles) north; other neighbouring countries include Syria and Lebanon to the east, Israel to the southeast, Egypt to the south, and Greece to the west-north-west.
Politically and culturally, however, it is closely aligned with Europe – particularly Greece and Turkey. Historically,
Cyprus has been at the crossroads between Europe, Western Asia, and Northern Africa, with lengthy periods of mainly Greek and intermittent Anatolian, Levantine, and British influences. Thus, it is generally considered a transcontinental island
A former British colony, Cyprus became independent in 1960 following years of resistance to British rule. Tensions between the Greek Cypriot majority and Turkish Cypriot minority came to a head in December 1963, when violence broke out in the capital of Nicosia. Despite the deployment of UN peacekeepers in 1964, sporadic intercommunal violence continued forcing most Turkish Cypriots into enclaves throughout the island.
In 1974, a Greek Government-sponsored attempt to seize control of Cyprus was met by military intervention from Turkey, which soon controlled more than a third of the island. In 1983, the Turkish-held area declared itself the "Turkish Republic of Northern Cyprus," but it is recognized only by Turkey. The latest two-year round of UN-brokered talks - between the leaders of the Greek Cypriot and Turkish Cypriot communities to reach an agreement to reunite the divided island - ended when the Greek Cypriots rejected the UN settlement plan in an April 2004 referendum.
The entire island entered the EU on 1 May 2004, although the EU acquis - the body of common rights and obligations - applies only to the areas under direct Republic of Cyprus control, and is suspended in the areas administered by Turkish Cypriots. At present, every Cypriot carrying a Cyprus passport has the status of a European citizen; however, EU laws do not apply to north Cyprus. Nicosia continues to oppose EU efforts to establish direct trade and economic links to north Cyprus as a way of encouraging the Turkish Cypriot community to continue to support reunification
| Cyprus |
|
| Capital |
Nicosia
35°08′N 33°28′E |
| Official languages |
Greek, Turkish |
| Area |
9,251 km² (167th)
3,572 sq mi |
| Population
|
835,000 (157th) |
| GDP (PPP)
|
$ 17.49 billion (115th) |
| per capita
|
$ 21,232 (32nd) |
| Currency |
Cyprus Pound (CYP) |
| Time zone |
(UTC+2) |
| Dialling code |
+357 |
CYPRUS ECONOMY
The Republic of Cyprus has a market economy dominated by the service sector, which accounts for 76% of GDP. Tourism and financial services are the most important sectors; erratic growth rates over the past decade reflect the economy's reliance on tourism, which often fluctuates with political instability in the region and economic conditions in Western Europe.
Nevertheless, the economy grew a healthy 3.7% per year in 2004 and 2005, well above the EU average. Cyprus joined the European Exchange Rate Mechanism (ERM2) in May 2005. The government has initiated an aggressive austerity program, which has cut the budget deficit to below 3% but continued fiscal discipline is necessary if Cyprus is to meet its goal of adopting the euro on 1 January 2008.
As in the area administered by Turkish Cypriots, water shortages are a perennial problem; a few desalination plants are now on line. After 10 years of drought, the country received substantial rainfall from 2001-03 alleviating immediate concerns. The Turkish Cypriot economy has roughly one-third of the per capita GDP of the south, and economic growth tends to be volatile, given north Cyprus's relative isolation, bloated public sector, reliance on the Turkish lira, and small market size.
The Turkish Cypriot economy grew 15.4% in 2004, fueled by growth in the construction and education sectors, as well as increased employment of Turkish Cypriots in the Republic of Cyprus. The Turkish Cypriots are heavily dependent on transfers from the Turkish Government. Under the 2003-06 economic protocol, Ankara plans to provide around $550 million to the "TRNC." Agriculture and services, together, employ more than half of the work force
Economic affairs in Cyprus are dominated by the division of the country due to the Turkish occupation of the north part of the island.
The Cypriot economy is prosperous and has diversified in recent years. Cyprus has been sought as a basis for several offshore businesses, due to its highly developed infrastructure. Economic policy of the Cyprus government has focused on meeting the criteria for admission to the European Union.
Recently, oil has been discovered in the sea South of Cyprus (between Cyprus and Egypt) and talks are under way with Egypt to reach an agreement as to the exploitation of these resources. The level of the oil field in terms of production (barrels per day) that the two countries will be able to produce is still a matter of speculation.
The economy of the Turkish Cypriot North is dominated by the services sector including the public sector, trade, tourism and education, with smaller agriculture and light manufacturing sectors. The economy operates on a free-market basis, although it continues to be handicapped by the political isolation of Turkish Cypriots, the lack of private and governmental investment, high freight costs, and shortages of skilled labor.
Despite these constraints, the Turkish Cypriot economy turned in an impressive performance in 2003 and 2004, with growth rates of 9.6% and 11.4%. Over the same period, per capita income almost doubled. This growth has been buoyed by the relative stability of the Turkish Lira and by a boom in the education and construction sectors
LOW TAX CYPRUS
The Republic of (Southern) Cyprus has been a favoured destination for those seeking a medium haul holiday in the sun for many years, but the government of Cyprus has been actively working to diversify its economic dependence on the tourism industry since it joined the EU back in 2004 and has been luring growing numbers of British and European retirees with the promise of a low tax lifestyle ever since.
Despite being a fully signed up member of the European Union, Cyprus has managed to retain strong control over the rates of tax it charges those who retire to Cyprus and what’s even more interesting is that inheritance tax has been abolished in Cyprus and capital gains tax is half what it is in the UK for example, meaning that you really can retire to Cyprus for a low tax lifestyle…but could all that be about to change?
Experts are warning that the success of the Cypriot policy of offering wealthy retirees an almost tax free haven in the sun could be about to explode as record numbers have taken up the open ‘invitation’, bought up all the property, pushed up prices and created an ever widening affordability gap that local buyers cannot bridge.
At the moment anyone retiring to Cyprus need only pay 5% tax on any of their pension income whether that be from a state pension or a private or company pension. Furthermore, those with a British pension are still entitled to take a certain percentage of their final sum tax free and any state pension that they are entitled to will benefit from annual inflation increases.
Other benefits that those retiring to Cyprus may profit from include the fact that inheritance tax has been abolished and therefore those who are successful in changing their domicile to Cyprus can avoid this unfair taxation, and the rate of capital gains tax is far lower in Cyprus than it is elsewhere in Europe and those who wait until they are fully eligible for Cypriot CGT before cashing in their assets will potentially make massive taxation savings.
But…experts in both the financial services and real estate businesses are warning people that all this could be too good to last because Cyprus is now awash with retirees and has enjoyed a property market that has been so successful that it is now far less affordable.
If certain actions are not put in place soon Cyprus could find it suffers the same problems as tax havens like Jersey where it is just too expensive to live for 99% of normal people. There have been no public announcements made by the government relating to action they may take, but advisers are recommending that retirees in Cyprus get a contingency plan in place to protect their future financial position.
~ Books About Cyprus~
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