Romania and Cyprus signed a Double Tax Agreement on the 16th November 1981 which came into force on the 8th November 1982. The Agreement allocates taxing rights between the two states to prevent double taxation of a number of categories of income. The Agreement encourages trade and investment between the two states by preventing tax obstacles to business between them.
For example, where the right to tax the capital gains obtained from the sale of shares is allocated only to Cyprus pursuant to the finding of tax residence of the transferor in Cyprus, zero capital gain tax would apply in Romania. A feature of the agreement is the tax sparing credit in Romania in respect of Cyprus tax which would have been payable in Cyprus but for a tax incentive exemption or relief in Cyprus.
Mr. Mamas Koutsoyiannis, the President of the Bilateral Chamber of Commerce and Industry Romania-Cyprus recently addressed an International Tax Seminar Romania-Cyprus. The Chamber of Fiscal Consultants organized this seminar with the support of the Embassy of Cyprus in Romania, given the existing friendly relations and cooperation between Cyprus and Romania and the extent of trade and economic transactions between Romania and Cyprus in the recent years.
The commercial exchanges between these two countries have grown rapidly in the past few years, pushing for the need to have a solid base and a common ground for bilateral relations. A group of Cypriot and Romanian bold businessmen thus came up with the idea of creating a bilateral chamber of commerce and industry in 2004. The purpose of the Bilateral Chamber of Commerce and Industry Romania-Cyprus is to establish an economic and juridical framework and to promote the business relations between Romania and Cyprus and the relations between Romanian and Cypriot businessmen. The Chamber is established as a nongovernmental, public utility, autonomous and non-political organization. It offers guidance on possibilities of investments and assistance when opening a business in Romania.
The main objective of BCCIRC is to support, to mediate and to represent the interests of its members in the relation with Romanian and Cypriot authorities, with economic agents, with public institutions and non-governmental organisations. The purpose was to create a structure which would facilitate the commercial exchange between these two countries, acting as a “firm ground” for Romanian and Cypriot businessmen to consolidate their investments.
In addition, the Romanian-Cyprus Business Organization (ORCA) is a non-profit, apolitical and independent organization that promotes the economic and commercial interests of Cypriot investors in Romania, both locally and internationally. ORCA tries to bring into contact investors from Cyprus and Romania encouraging the networking between the two countries.
Cyprus is among the countries with high investment in Romania and in the meeting with Romanian Minister assured the Cypriot side that the Government is working to simplify the legal system and business environment in Romania for the convenience of foreign business investors in the country.
