Cryptocurrency Investments and Regulations in Cyprus

Simon Zenios & Co LLC provides extensive guidance on different areas of Blockchain technology business, with cryptocurrency and its regulations being one of the main ones on the present day. The specialized personnel will be proven adequate in aiding you to find cost-effective corporate solutions and assuring you are in compliance with all applicable laws and regulations.

According to the historical background, the European Union has always embraced cryptocurrencies.  Throughout the years, EU’s policies, recommendations and directives have been accepting towards cryptocurrencies, unlike other economic areas where there are bans and restrictions imposed. Based on that approach, EU continues to attract ICO organizers and cryptocurrency enthusiasts. As a member of the EU, Cyprus maintains the same approach. The buying and selling of cryptocurrencies are facilitated in Cyprus and this has made it a perfect place for blockchain business.

In addition, blockchain has finally given countries opportunities to compete with bigger nations. When it comes to digital currencies, the world’s most powerful countries may be imposing barriers and strict regulations but countries like Cyprus are taking it in stride and embracing the new technologies.

Cyprus is open to many types of innovative Blockchain projects relating to payment services, crypto- trading, securities and many more. The country is currently listed among the freest location for ICO organizers and crypto- enthusiasts. If you have a business that is located there, you do not have any reason to panic over legal issues with the government. This is because Cyprus policy makers and the government have never expressed opinions against cryptocurrencies.

Are cryptocurrencies legal in Cyprus?

Cryptocurrency has an impeccable legal record in Cyprus, and it is recognized as legal tender. The government has no plan to restrict merchants or ban the service. This improves the ability of consumers to trade goods and services for digital currencies.

Even though funds raised from an ICO are considered as taxable income in Cyprus, the country’s corporate income tax rate is at 12,5%, one of the lowest in Europe and further deductions may be applicable with careful tax optimization. Also, there’s a case to be made based on guidance coming from the European Court, that, at the time of issuance token, offerings fall within the scope of exchanges and not economic activity, thus at this stage, they are not subject to VAT.

For tax purposes, security tokens based on their qualifications may be regarded as equity or debt liability in the business books and therefore be excluded from corporate income tax and VAT.  In addition, capital gains from the sale of securities are tax exempted as well as dividends paid abroad, thereby making it an attractive place for foreign investors.

For project runners wishing to relocate, Cyprus provides many initiatives for foreigners moving their tax residency in Cyprus with discounts reaching 50% on employment income and exemptions from employment income deriving from abroad. There are also tax exemptions on profits deriving from the sale of securities such as shares, bonds and debentures with the exclusion of share value relating to immovable property.  

Cryptocurrency and ICO status in Cyprus

Cyprus has become one of the best countries that are considered for blockchain businesses and this is mostly because of the island’s attractive tax system. What is more, the country offers no danger to restrict or ban ICOs. Also, the fact that Cyprus has raised to 5.000.000 EUR calculated over a period of 12 months,  the threshold under which there is no obligation to publish a Prospectus for security offerings, is good news to investors and crowd sale organizers who do not want to limit themselves with a utility token.

If you plan to do business in Cyprus, it is important to note that there are many blockchain companies that will love to use cryptocurrencies for good business arrangements and freedom.

Crowdsale and investors can enjoy the freedom that this jurisdiction can offer. Most cryptocurrencies are already accessible through the market of classical currencies also known as forex. It has propelled them into the mainstream of investor’s conscience. The existing development in the digital currency sector will yield a more rewarding and transparent experience for investors as an outcome. 

Should you have any queries setting up your Blockchain project in Cyprus, Simon Zenios and Co LLC will be of great assistance before and throughout the process of materializing your plans, by providing the most fitting and cost-effective solutions which catch up with the rapidly increased interest towards cryptocurrencies and crypto-investments.

This article is only for informative purposes. Should you require expert guidance about this topic, please contact Simon Zenios & Co LLC below:

Email: [email protected]

Telephone: +357 24 023370

Published on: 16/09/19