{"id":1075,"date":"2021-07-19T12:22:00","date_gmt":"2021-07-19T12:22:00","guid":{"rendered":"https:\/\/aspentrust.com\/?p=1075"},"modified":"2023-01-04T15:53:29","modified_gmt":"2023-01-04T15:53:29","slug":"the-intellectual-property-law-of-cyprus-is-the-ideal-next-step-in-ip-protection","status":"publish","type":"post","link":"https:\/\/aspentrust.com\/the-intellectual-property-law-of-cyprus-is-the-ideal-next-step-in-ip-protection\/","title":{"rendered":"The Intellectual Property Law of Cyprus Is the Ideal Next Step in IP Protection"},"content":{"rendered":"\n<p><a href=\"https:\/\/aspentrust.com\/\">The Aspen Trust Group<\/a> explores the emergence of intellectual property rights and protections in a global context and how the Intellectual Property Law of Cyprus grants businesses the greatest security for not only IP protection measures but also financial advantages.<\/p>\n\n\n\n<p>Through the establishment of the<a href=\"http:\/\/www.legislation.gov.uk\/aep\/Ja1\/21\/3\/introduction\"> Statute of Monopolies<\/a> in 1624 and the<a href=\"https:\/\/www.theguardian.com\/technology\/2007\/aug\/06\/statuteofanne\"> Statute of Anne<\/a> in 1710, Intellectual property (IP) evolved into valuable assets to businesses, whereas previously they had been afforded little to no legal protection. The creation of the<a href=\"https:\/\/www.wipo.int\/about-wipo\/en\/\"> World Intellectual Property Organization (WIPO)<\/a> in 1967 cemented IP rights on an international level.<\/p>\n\n\n\n<p>Since then, given the rise in the number of digital assets and the boom in IT companies, international protection for IP has sought to find a balance between encouraging innovation and safeguarding strategic business intellectual goods that are both non-physical and cross-border.<\/p>\n\n\n\n<p>Cyprus continues to be<a href=\"https:\/\/aspentrust.com\/jurisdictions\/\"> an attractive location for business investment opportunities as well as tax planning advantages<\/a> within the framework of the <strong>Intellectual Property Law of Cyprus<\/strong>. The Cyprus IP Box regime, introduced in 2012 and then updated in 2016 to comply with the guidelines of the <a href=\"https:\/\/www.oecd.org\/\">Organization for Economic Co-operation and Development (OECD)<\/a>, distinguishes the country as the ideal destination for international investors to achieve IP protection and beneficial financial incentives.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">The Legal Framework<\/h2>\n\n\n\n<p>In Cyprus, IP ideas are covered by both Cypriot laws as well as international regulations. Here are a few key documents and conventions signed by Cyprus.<\/p>\n\n\n\n<p><em><u>Cyprus Jurisdiction<\/u><\/em><\/p>\n\n\n\n<p>The Intellectual Property Law of Cyprus<br>The Partnership and Trade Name Law<br>The Trademark Law<br>The Patent Law<br>The United Kingdom Designs Act<\/p>\n\n\n\n<p><em><u>EU and International Standards<\/u><\/em><\/p>\n\n\n\n<p>International Copyright Law<br>Paris Convention for the Protection of Industrial Property<br>Bern Convention for the Protection of Literary and Artistic Works<br>WIPO Performance and Phonograms Treaty<br>WIPO Beijing Treaty on Audiovisual Performances<\/p>\n\n\n\n<p><em><u>Types of IPR (Intellectual Property Rights)<\/u><\/em><\/p>\n\n\n\n<p><strong>Copyright<\/strong><\/p>\n\n\n\n<ul><li>Literary Works<\/li><li>Musical Works<\/li><li>Artistic Works<\/li><li>Scientific Works<\/li><li>Databases<\/li><li>Cinematography<\/li><li>Sound Recordings<\/li><li>Broadcasts, Radio and Television<\/li><li>Publications, including Previously Unpublished Works<\/li><\/ul>\n\n\n\n<p>Some of the advantages of copyright protection under the Intellectual Property Law of Cyprus include extended coverage for residents, legal structures, registered companies, and foreign residents of Cyprus as well as recognition for foreign innovations. Also, in most cases, copyright is maintained for the lifetime of the author and then extends 50 years after death.<\/p>\n\n\n\n<p><strong>Patent<\/strong><\/p>\n\n\n\n<ul><li>New Invention, detailing the nature of how it works, its purpose or product, the method, the materials, and the manufacturing aspects<\/li><\/ul>\n\n\n\n<p>Established through the Patent Law of Cyprus, the Patents Register of Cyprus is the governing body responsible for logging and publishing an IP patent in the Official Gazette of the Cyprus Republic. As long as the patent is renewed each year, protection is provided for 20 years.<\/p>\n\n\n\n<p><strong>Trademark<\/strong><\/p>\n\n\n\n<ul><li>Distinctive sign using words or pictures that identify: product, service, or enterprise<\/li><\/ul>\n\n\n\n<p>Under the Trademark Law, authentic Cypriot trademarks may be registered in the Trademark Registry by a lawyer. Protection is provided for 7 years after registration and then again for every 14 years.<\/p>\n\n\n\n<p><em><u>Note on Tax Changes<\/u><\/em><\/p>\n\n\n\n<p>In a 2012 decision, the Income Tax Law was adjusted to a tax rate of 2.5% and exempts taxation on dividends distributed from a resident Cyprus company to foreign shareholders in regards to IP rights. The new Cyprus IP Box regime makes the jurisdiction one of the most favorable for maximum IP protection with minimal taxation on IP income. Included in the new scheme are patents, copyrighted software programs, and useful, novel intangible assets. Trademarks and copyrights are not qualified under these measures.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">A Brief History of Intellectual Property Law and IP Box Regimes<\/h2>\n\n\n\n<p>First introduced in Ireland under<a href=\"http:\/\/www.irishstatutebook.ie\/eli\/1973\/act\/19\/section\/34\/enacted\/en\/html#sec34\"> section 34 of the 1973 Finance Act<\/a>, tax relief incentives were given to royalties and other income derived from licensed patents in the country, although the scheme was later withdrawn in 2010.<\/p>\n\n\n\n<p>In 2001, France took Ireland\u2019s example and reduced the tax rate on income gained from IP licensing and transferring of IP assets into a new company. This started a European trend of Intellectual Property Box regimes (IP Box regimes) in which countries establish financial advantages through taxation policies specifically for IP.<\/p>\n\n\n\n<p>The strategies for IP Box regimes can be divided into two groups.<\/p>\n\n\n\n<ol><li>Those who grant reduced rates of tax on qualifying income, (adopted by France, the United Kingdom, and the Netherlands)<\/li><\/ol>\n\n\n\n<ol start=\"2\"><li>Those who grant exemptions on a specified fraction of revenues, (implemented by Spain, Hungary, Belgium, Luxembourg, and Cyprus)<\/li><\/ol>\n\n\n\n<p>As IP refers to intangible goods, they can often be hard to protect. The establishment of IP Box regimes has found a way to give companies greater control over their IP while also acquiring financial benefits in doing so.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">The Principles of the Intellectual Property Law of Cyprus: The IP Box Regime<\/h2>\n\n\n\n<p>Cyprus remains the ideal location for establishing an IP Holding and Development company under the Intellectual Property Law of Cyprus. With an efficient taxation system, a healthy business environment, a diverse collection of international IP rights and taxation treaties, as well as compliance with EU, OECD, and WIPO standards, the Cyprus IP Box regime provides opportunities for international companies to gain immediate financial benefits and full international protection of valuable IP assets.<\/p>\n\n\n\n<p>The main feature of the Cyprus IP Box regime is the 80% deduction of revenue earned from the use of intangible assets. This four-fifths exemption from profits means that only 20% of IP income is taxed at the<a href=\"https:\/\/www.cyprusprofile.com\/en\/doing-business\/taxation\/\"> corporate tax rate of 12.5%<\/a>. After applying the calculations, Cyprus-resident companies can see an effective tax rate as low as 2.5%.<\/p>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter size-large\"><img fetchpriority=\"high\" decoding=\"async\" width=\"800\" height=\"533\" src=\"https:\/\/aspentrust.com\/wp-content\/uploads\/2020\/06\/cyprus-ip-box-regime.jpg\" alt=\"Cyprus IP Box Regime\" class=\"wp-image-1640\" srcset=\"https:\/\/aspentrust.com\/wp-content\/uploads\/2020\/06\/cyprus-ip-box-regime.jpg 800w, https:\/\/aspentrust.com\/wp-content\/uploads\/2020\/06\/cyprus-ip-box-regime-300x200.jpg 300w, https:\/\/aspentrust.com\/wp-content\/uploads\/2020\/06\/cyprus-ip-box-regime-768x512.jpg 768w\" sizes=\"(max-width: 800px) 100vw, 800px\" \/><\/figure><\/div>\n\n\n\n<p>Previously, any profit earned from the disposal of intangible assets was also exempt under the 80% deduction scheme of the old Cyprus IP Box regime, a notable amount when compared with similar IP Box regimes. Under the<a href=\"https:\/\/www.cyprusprofile.com\/en\/articles\/the-changes-to-the-cyprus-intellectual-property-box\/\"> 2016 update to the Intellectual Property Law of Cyprus<\/a>, the profits earned from the disposal of qualifying assets are not included in the nexus fraction and thus exempt from tax.<\/p>\n\n\n\n<p>Under the new Intellectual Property Law of Cyprus, qualifying assets include patents, copyrights software programs, and other intangible assets deemed non-obvious, useful and novel. Trademarks and copyrights do not qualify under the Cyprus IP Box regime. However, these may still benefit from other provisions of the Cyprus tax law, such as capital allowances or notional interest deduction, which will help reduce the overall effective tax rate of the company.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">A New IP Box Regime: The Nexus Approach<\/h2>\n\n\n\n<p>In October 2016,<a href=\"https:\/\/www.cyprusprofile.com\/en\/articles\/the-changes-to-the-cyprus-intellectual-property-box\/\"> the Cyprus House of Representatives amended the Income Tax Law<\/a> in an effort to meet the IP tax legislation provisions of the OECD. In some instances, the existing IP regime can be upheld for up to five years before applying the new tax regime policies.<\/p>\n\n\n\n<p>It introduced the nexus fraction to determine the amount of qualifying profits that will provide the relevant tax deductions.<\/p>\n\n\n\n<p>The nexus fraction factors in the overall income with qualifying expenditure, uplift expenditure, and overall expenditure in an additive approach that takes into account all expenditures being incurred directly by the taxpayer over the lifetime of the IP asset.<\/p>\n\n\n\n<p>Under the amended 2021 Cyprus IP Box Regime, three types of intellectual property will be considered qualifying assets by the Cyprus Inland Revenue Commissioner: patents, software, and innovative IP.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Managing IT Assets Under the Cyprus IP Box Regime<\/h2>\n\n\n\n<p><a href=\"https:\/\/www.cyprusprofile.com\/en\/sectors\/technology-start-ups\/\">The influx of IT companies, most notably those performing asset management<\/a>, has led to the rapid development of Cyprus\u2019 cities, such as Limassol. The business community has marked Limassol as distinguished for IT investments and infrastructure as Silicon Valley and other internationally competitive IT leaders in business have already established headquarters on the island.<\/p>\n\n\n\n<p>As a result, many IT companies have made the move to Cyprus and an entire market of independent analysis and investment strategy has emerged.<\/p>\n\n\n\n<p>The Intellectual Property Law of Cyprus and its IP Box regime are largely responsible for the growing interest in this jurisdiction. Digital goods are more valuable than ever and the favorable tax and business environments in Cyprus have made it a hub for digital business goods, IT software, and related intellectual property protection services.<\/p>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter size-large\"><img decoding=\"async\" width=\"800\" height=\"533\" src=\"https:\/\/aspentrust.com\/wp-content\/uploads\/2020\/06\/software-ip-protection-cyprus.jpg\" alt=\"Software IP Protection Cyprus\" class=\"wp-image-1641\" srcset=\"https:\/\/aspentrust.com\/wp-content\/uploads\/2020\/06\/software-ip-protection-cyprus.jpg 800w, https:\/\/aspentrust.com\/wp-content\/uploads\/2020\/06\/software-ip-protection-cyprus-300x200.jpg 300w, https:\/\/aspentrust.com\/wp-content\/uploads\/2020\/06\/software-ip-protection-cyprus-768x512.jpg 768w\" sizes=\"(max-width: 800px) 100vw, 800px\" \/><\/figure><\/div>\n\n\n\n<h3 class=\"wp-block-heading\"><em><u>Which IP Rights Can be Obtained for Software?<\/u><\/em><\/h3>\n\n\n\n<p>As Cyprus continues to become <a href=\"https:\/\/aspentrust.com\/taking-advantage-of-the-best-startup-hubs-in-europe\/\"><u>a leading start-up and IT hub for Europe<\/u><\/a>, the importance of protection for software and other computer-related IP is also growing.<\/p>\n\n\n\n<p><a href=\"https:\/\/aspentrust.com\/cyprus-the-best-place-to-live-as-a-digital-nomad\/\"><u>Digital nomads<\/u><\/a> are finding the jurisdiction an ideal place to generate new models of business and contribute innovative new digital ideas. Larger foreign investors are finding the developments surrounding key industrial parks such as the <a href=\"https:\/\/aspentrust.com\/limassol-marina-an-anchor-for-the-luxury-shipping-industry\/\"><u>\u201cWall Street\u201d and technology center emerging around the Limassol Marina<\/u><\/a> attractive new locations for investment and business prospects.<\/p>\n\n\n\n<p>Luckily, the Cyprus IB Box regime and the Intellectual Property Law of Cyprus have already made initiatives to provide better protections and incentives to IT and software rights than many other jurisdictions.<\/p>\n\n\n\n<p>When it comes to which IP rights can be obtained for software, Cyprus offers software codes and other IP products protection under copyright. While this provides the legal framework for the protection of digital goods and ideas, the jurisdiction has also ensured that the new Nexus approach to taxation applies to digital goods even though copyright, in general, is not covered under the equation.<\/p>\n\n\n\n<p>In other words, software and other digital goods are provided for under the category of copyright protection but are distinguished in the IP Box regime tax incentives, lowering the tax rate to 2.5% for income on these IP products.<\/p>\n\n\n\n<p>Contact<a href=\"https:\/\/aspentrust.com\/\"><u> The Aspen Trust Group<\/u><\/a> to learn more on how to protect software codes and other digital goods under copyright principles and establish evidence of copyright ownership.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">9 Advantages That Make the Intellectual Property Law of Cyprus an Ideal Business Solution<\/h2>\n\n\n\n<p>The Cyprus IP Box regime is an ideal solution for financial strategic planning and IP protection to the benefit of international companies. Nine distinct advantages set it apart from other IP Box regimes in Europe.<\/p>\n\n\n\n<p><em><strong>1. A Strategic Location<\/strong><\/em><\/p>\n\n\n\n<p>In-between Europe, Africa, and the Middle East, Cyprus is a destination for businesses looking to be connected across multiple continents and markets.<\/p>\n\n\n\n<p><em><strong>2. Higher Quality-of-Life<\/strong><\/em><\/p>\n\n\n\n<p>A high quality-of-life, affordable cost-of-living, low crime rates, and leading healthcare system make relocating a company\u2019s headquarters to Cyprus an ideal lifestyle for its employees.<\/p>\n\n\n\n<p><em><strong>3. Language Accessibility&nbsp;<\/strong><\/em><\/p>\n\n\n\n<p>English remains one of the major languages spoken around the island and, with so many international investors, doing business in Cyprus comes with no language barriers.<\/p>\n\n\n\n<p><em><strong>4. A Skilled Workforce<\/strong><\/em><\/p>\n\n\n\n<p>Over 20 public and private internationally-recognized universities and institutes of higher education ensure that graduates entering the workforce are some of the most highly-skilled, competitive employees to international companies establishing their operations in Cyprus.<\/p>\n\n\n\n<p><em><strong>5. Infrastructure Investments<\/strong><\/em><\/p>\n\n\n\n<p>Both government and privately-funded investments continue to rapidly develop Cyprus across many industries. Each year millions of Euros are being committed to further enhance the infrastructure of Cyprus and make it competitive on an international level. These investments have made Cyprus rank <a href=\"https:\/\/data.worldbank.org\/indicator\/IC.BUS.EASE.XQ?locations=CY\">54<sup>th<\/sup> for doing business<\/a> and<a href=\"http:\/\/www3.weforum.org\/docs\/WEF_TheGlobalCompetitivenessReport2019.pdf\"> 44<sup>th<\/sup> in global competitiveness<\/a>.<\/p>\n\n\n\n<p><em><strong>6. Attractive Tax System<\/strong><\/em><\/p>\n\n\n\n<p>The Intellectual Property Law of Cyprus provides a tax rate of 2.5%, almost half the rate of its closest competitors such as Belgium (3.8%) and Hungary (4.5%). Tax rates for other IP Box regimes range from 2.5% to 10%, with Cyprus offering the lowest tax rate in Europe.<\/p>\n\n\n\n<p><em><strong>7. Wider Range of Protection<\/strong><\/em><\/p>\n\n\n\n<p>The Intellectual Property Law of Cyprus also applies to a wider range of income than that of other IP Box regimes as most focus exclusively on income derived from patents and offer less exemptions on capital gains on the disposal of IP assets.<\/p>\n\n\n\n<p><em><strong>8. International Compliance<\/strong><\/em><\/p>\n\n\n\n<p>Cyprus continues to make every effort to stay compliant with international tax policies mandated from the EU, the OECD, and WIPO and has signed several treaties establishing effective tax policies that afford maximum IP protection and tax efficiency solutions.<\/p>\n\n\n\n<p><em><strong>9. An IT Hub<\/strong><\/em><\/p>\n\n\n\n<p>As discussed before, Cyprus is becoming a hub for IT services and the community of businesses in this industry are reshaping cities on the island. As a result, more policies and initiatives are put in place to protect and assist the development of the IT industry.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Taking the Necessary Steps Towards IP Protection<\/h2>\n\n\n\n<p>In order to get the utmost protection and financial benefits, international companies should explore relocation options. The Cyprus IP Box regime is one of the most prominent in Europe and relocating a company\u2019s headquarters to the island can come with significant gains.<\/p>\n\n\n\n<p><a href=\"https:\/\/aspentrust.com\/company\/\">The consultants at The Aspen Trust Group<\/a> can help you take advantage of the favourable Intellectual Property Law of Cyprus and will ensure that you get full protection of valuable IP assets and<a href=\"https:\/\/aspentrust.com\/5-benefits-of-tax-optimization\/\"> the maximum financial benefits<\/a> for your company through<a href=\"https:\/\/aspentrust.com\/local-services\/\"> the establishment and management of an IP Holding and Development company in Cyprus<\/a>.<\/p>\n\n\n\n<p><a href=\"https:\/\/aspentrust.com\/contact\/\">Contact us today<\/a> for your IP protection needs and start maximizing your benefits.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The Aspen Trust Group explores the emergence of intellectual property rights and protections in a global context and how the Intellectual Property Law of Cyprus grants businesses the greatest security for not only IP protection measures but also financial advantages. Through the establishment of the Statute of Monopolies in 1624 and the Statute of Anne &hellip;<\/p>\n<p class=\"read-more\"> <a class=\"\" href=\"https:\/\/aspentrust.com\/the-intellectual-property-law-of-cyprus-is-the-ideal-next-step-in-ip-protection\/\"> <span class=\"screen-reader-text\">The Intellectual Property Law of Cyprus Is the Ideal Next Step in IP Protection<\/span> Read More \u00bb<\/a><\/p>\n","protected":false},"author":1,"featured_media":1639,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"default","ast-site-content-layout":"","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","theme-transparent-header-meta":"default","adv-header-id-meta":"","stick-header-meta":"default","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""}},"footnotes":""},"categories":[6],"tags":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v22.5 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Intellectual Property Law Cyprus - Aspen Trust Group<\/title>\n<meta name=\"description\" content=\"The Intellectual Property Law of Cyprus is the most competitive financial solution for IP protection. 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