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Cyprus IP Box Regime

Aug 30
2 min read

A competitive framework for innovation-led businesses


For businesses built around technology, software and innovation, intellectual property can be one of their most valuable assets — and where that IP is developed and exploited matters.

The Cyprus IP Box Regime provides an attractive framework for qualifying intellectual property, allowing an 80% deduction on qualifying IP profits. Following the 2026 increase in Cyprus corporate income tax to 15%, this can result in an effective tax rate as low as 3%.

What can qualify?

The regime is primarily designed for genuine innovation and R&D-driven activity. Qualifying assets may include:

  • patents and patented technology;

  • copyrighted computer software, including certain algorithms and embedded code; and

  • certain other legally protected innovative assets.

Marketing-related IP, such as trademarks, brands and business names, is excluded.

More than an effective 3% tax rate

The regime follows the modified nexus approach, meaning the benefit is linked to the R&D activity and expenditure behind the intellectual property.

This makes the structure important. Where development takes place, who bears the R&D costs and risks, how the IP is owned and how it generates income can all affect the available benefit.

For technology companies, SaaS businesses, developers and international groups, these are matters worth considering before the IP becomes valuable — not after.

Structuring for growth

For the right business, the Cyprus IP Box can form part of a wider structure combining EU establishment, IP ownership, R&D activity and international operations.

The real opportunity is therefore not simply accessing a favourable tax rate, but creating a structure that supports the development and commercialisation of the business's intellectual property as it grows.

If IP sits at the heart of your business, its structure should be part of the conversation from the outset.

This publication is provided for general information purposes only and does not constitute legal, or tax advice. Professional advice should be obtained in relation to individual circumstances.

 

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