Cyprus has a highly developed insurance industry which is growing alongside the banking and investment funds business. The prevailing volatile economic environment, together with the new Solvency II regulatory compliance requirements and stricter regulatory oversight is putting a strain on capital needs and increased pressure on earnings. The new regulatory framework, requires insurers not only to maintain a sufficient level of risk-based regulatory capital, but also to establish a sound risk management and corporate governance system and deal with more onerous compliance and reporting requirements on an ongoing basis. Insurers who can anticipate and plan for change can create their own future.
Highlights
- Cyprus, being an EU member state, benefits from a sound legal and regulatory framework.
- Insurance/Reinsurance International companies can set up a Cyprus company following a transparent and straightforward application process.
- Insurance Companies set up in an EU member state can carry out insurance business in Cyprus under the freedom of establishment/services provisions.
- The corporate tax rate standing at 12,5% and the full exemption from taxation of profits on disposal of securities along with multiple additional appealing tax features, add to the competitive edge of Cyprus in attracting investors’ interest.
- Solvency II, which is live as from 1 January 2016 and has been transposed into local law in April 2016, represents the largest ever change to European Insurance solvency regulations and is expected to be reshaping the insurers’ business models and practices over the upcoming years.
- The move to a harmonised International Financial Reporting Standard (IFRS) for Insurance Contracts is gathering pace, with a new standard on the horizon, expected to fundamentally change the accounting for insurance contracts. Insurers are also facing a shake-up in other key areas of financial reporting, including the basis for financial instrument measurement.
How can PwC help you
PwC Cyprus has a dedicated team of professionals with deep insurance sector knowledge and expertise to assist you to face these new challenges and manage the risks of doing business in a highly volatile and uncertain economic environment. Our team of insurance industry professionals can assist companies in the insurance sector in their Solvency II and IFRS-related projects, engage in M&A activity and reengineer their internal processes, by providing the whole spectrum of consulting, regulatory, auditing and taxation services. When you team up with PwC you are teaming up with people who understand the big challenges facing your industry, bringing local perspectives coupled with the international expertise only an organization of our experience can deliver.
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