Cyprus · Tax regime
Intellectual Property Box Regime
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The structure is unchanged, but the effective rate moved from roughly 2.5% to roughly 3% on 1 January 2026. That is a mechanical consequence of the corporate rate rising from 12.5% to 15%. The 80% exemption and the OECD Modified Nexus Approach are untouched.
This is still one of the lowest effective IP rates in the EU, at roughly 3%. It is genuinely Nexus-compliant, not a legacy regime grandfathered in under old rules. The real trap is not the rate. It is the eligibility perimeter. Trademarks and marketing intangibles were excluded years ago, so brand-heavy businesses get nothing here.
Qualifying routes
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Qualifying patents
80% of qualifying profit is exempt
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Copyrighted software
80% of qualifying profit is exempt
The facts
- Total landed cost
- There is no entry cost. The real cost is the R&D substance that the Nexus Approach requires you to locate in Cyprus.
- Route type
- Tax regime, not a visa
- Physical presence
- This is a corporate test. The company must be Cyprus tax resident with genuine R&D activity.
- Family
- Not applicable. This is a corporate regime
- Permanent residency
- Not applicable
- Citizenship
- Not applicable
- Language test
- Not applicable
- Dual citizenship
- Permitted
- Requirements
- Cyprus tax resident companyqualifying intangible: patents or copyrighted software onlycompliance with the OECD Modified Nexus Approach linking benefit to Cyprus R&D spenddetailed books and records tracking qualifying expenditure per asset
What can go wrong
- Trademarks, brands and marketing-related IP do not qualify. This is a common and expensive misunderstanding.
- The Nexus Approach ties the benefit to R&D expenditure actually incurred by the Cyprus company. Acquired IP and R&D outsourced to a related party dilute the qualifying fraction.
- The corporate rate rise to 15% pushed the IP Box effective rate up to roughly 3%. Any model still built on 2.5% is now wrong.
- Cyprus's 15% corporate rate exists to satisfy the OECD global minimum. But Pillar Two's own rules can claw back the benefit of an approximately 3% effective rate for groups within its scope. For a large multinational, the IP Box may deliver far less than the headline suggests.
- Substance gets audited. A Cyprus company with no engineers is not an IP Box company.