Free Trade Zones

The country has two Free Trade Zones: the Larnaca Free Zone and the Free Ports of Larnaca and Limassol. The businesses that operate within their areas are subject to few custom formalities and can import machinery, equipment, and raw materials wholly duty-free. Their foreign employees are liable to only 50 % of the regular income tax rates.

Companies operating in the Cyprus free zones can import non-Community and Community goods into the country. Community goods are usually for export to other EU countries. Non-Community goods cannot be sold freely but are meant exclusively for sales and use in Cyprus. However, non-EU products in these zones are not subject to VAT, excise tax, or import duties.

Companies may operate in the FTZs in Cyprus per the Free Zone Law and the Free Zones Regulations, and the Free Zones Customs Regulations.

The Larnaca FTZ has the goal of attracting foreign investment, creating employment, increasing exports and the flow of foreign currency, and developing infrastructure in the area. It has a privileged location as it’s only 48 km away from Nicosia. It hosts 94 industrial sites with plenty of incentives such as one of the lowest rents for leasing lands in the EU (between 500-1000 euros per square meter per year) and free-of-charge installation of electrical power and telephone lines.

To obtain a permit to operate in the Larnaca FTZ, the individual must apply to the Ministry of Commerce to acquire a land plot in the area and submit an application with the Department of Customs and Excise, and the Director of the Larnaca Customs Office to be able to start doing business in the FTZ.

Want to exploit the potential of Cyprus’ FTZs? Contact our experts  for more information!