Hong Kong Cyprus Tax Agreement Expands Investment Links

Hong Kong and Cyprus have signed a comprehensive avoidance of double taxation agreement aimed at strengthening bilateral trade, investment and cross-border business activity.

The Hong Kong Cyprus tax agreement is the city’s 58th such treaty and its third concluded this year.

Financial Services and Treasury Secretary Christopher Hui said the Hong Kong Cyprus tax agreement will clarify taxing rights between the two jurisdictions and help investors avoid double taxation.

Hong Kong residents will be able to claim tax credits on taxes paid in Cyprus, while withholding tax on royalties paid to Hong Kong residents will be reduced to 3% from rates of up to 10%.

The agreement still requires ratification by both jurisdictions before entering into force.

Officials said it supports Hong Kong’s strategy of expanding its international tax-treaty network, particularly among Belt and Road economies.

The pact is expected to improve certainty for businesses and investors operating between the two financial centres.