Intellectual Property

Intellectual property (IP) and its tax benefits in Cyprus

What is intellectual property?

Intellectual property refers to creations of the mind such as inventions, literary and artistic works, designs and symbols, names and images used in commerce. It is a property whose owners have rights of ownership like any other kind of property such as ownership of land and buildings.

Why is it important?

Protection of intellectual property is important for creators and developers as it allows them to receive the benefit for the time, effort and money that individuals and enterprises spent on creating and developing their intellectual property rights. Intellectual property rights enjoy similar rights to other types of property and as a result of this, the protection of ownership rights over intellectual property also allows creators and investors to benefit from licensing and selling their intellectual property (for example a license to use a computer program in exchange for a subscription).

The benefits of protecting your intellectual property rights

The protection of intellectual property grants the owner the exclusive right to exploit that intellectual property including any reproduction, advertisement, sale, rental, distribution, copies, exhibition, television/radio transmission, broadcast, translation, adaption, communication to the public of such intellectual property.

What is a trademark?

A Trademark is a mark which consists of points based on graphic appearance. It may include words, including the name of a person, images, letters, numbers, the shape of the product or the package or any combination of these, which can distinguish the product or services of an enterprise from the corresponding ones of other enterprises, provided that the mark is used or is intended to be used for such distinction purposes.

What is a patent?

A Patent is a protection title, valid for 20 years (provided that the annual fees are paid) granted to the beneficiary for new inventions involving an inventive step and which are susceptible to industrial application. An invention is considered new if it’s not part of the state of the art and involves an inventive step – if, that is, at the discretion of an expert, it does not arise in an apparent manner from the current state of the art. It is susceptible to industrial application if it can be manufactured and used in any sector of the manufacturing process.

Cyprus IP Box for companies

Cyprus is an attractive destination for companies due to its business-friendly legal framework including its tax framework and the protection of intellectual property rights. Holding companies that manage intellectual property choose Cyprus as their place of registration/incorporation as Cyprus combines the protection provided under the European Union through a series of significant treaties and protocols signed by the government of Cyprus.

Cyprus also has one of the most favourable IP Box regimes. The IP Box is the tax regime provided under Cyprus tax laws which offers tax exemptions for the acquisition or development of intangible assets. The IP Box allows a tax exemption of 80% on qualifying profits which taken together with Cyprus’ 23,5% corporate tax, can result in an effective tax rate of 2,5%.

Qualifying profit (QP) is the amount that corresponds to the fraction of the qualifying expenditure (QE) plus the uplift expenditure (UE) over the overall expenditure (OE) multiplied by the income that derives from the qualified assets (QA):

QP = (QE+UE)/OE x QA

If you want to find out more information about the IP Box Cyprus, check out our article titled Tax deductions under the IP Box Cyprus.

How can CX Financia help you?

At CX Financia, we can help you with various aspects of intellectual property protection and other corporate matters including:

  • the protection of your intellectual property rights;
  • the registration of trademarks in Cyprus and the European Union;
  • the registration of patents in Cyprus;
  • the establishment of a business in Cyprus;
  • the incorporation or redomiciliation of a company in Cyprus;
  • claiming tax benefits under Cyprus’ IP BOX regime;
  • corporate re-structuring of your group of companies in a tax-efficient manner and other international tax planning aspects.;
  • maintaining your company’s records in good order through our secretarial services;

We will be happy to discuss your enquiries with you and assist you. If you have any additional questions, you can send us an email at [email protected].



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