Official Certificate
Deputy Ministry of Research, Innovation & Digital Policy
Verified
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What This Means for Investors
Under the Cyprus Income Tax Law, investors (both natural and legal persons) who invest in certified innovative SMEs like Frojigo can deduct a percentage of their investment from taxable income. This framework is part of Cyprus's National Policy Statement for enhancing the entrepreneurial ecosystem.
Natural Persons
Category (i) Innovative SME
deductible from taxable income
50%
Category (ii) Innovative SME
deductible from taxable income
35%
Category (iii) Innovative SME
deductible from taxable income
20%
Max deduction€150,000/year
Annual cap50% of taxable income
Carry forward5 years
Investment typesEquity, quasi-equity, loans, guarantees
Legal Entities
Equity investments only
deductible from taxable income
30%
Max deduction€150,000/year
Carry forward5 years
Investment typesEquity investments only
Note: Natural persons may deduct qualifying investments from taxable income, subject to annual limits of €150,000 and 50% of taxable income, with unused amounts carried forward for up to five years. The total tax benefit is capped at 50% / 35% / 20% of the investment (depending on company category), with the actual benefit determined by the investor's marginal tax rate. Legal entities may deduct 30% of eligible equity investments (subject to €150,000/year and five-year carry-forward), without an additional category-based cap.
Key Highlights
Government Backed
Certified by the Deputy Ministry of Research, Innovation & Digital Policy
Up to 50% Deduction
Deduct up to 50% of investment from taxable income
Carry Forward
Unused deductions can be carried forward for 5 years
3-Year Hold Required
Shares must be held for minimum 3 years
Valid Until 2026
Framework active until December 31, 2026
Eligible Investment Types
The certification covers various forms of venture capital investments. Note that investment types differ by investor category:
Natural Persons
- • Equity investments — Direct capital for ownership shares
- • Quasi-equity investments — Hybrid debt, convertible instruments, preference shares
- • Loans — Including financial leases
- • Guarantees — Or a combination of the above
- • Follow-on investments — Additional rounds for existing investors
Legal Entities
- • Equity investments only — Direct capital for ownership shares
Interested in Investing?
Learn more about investment opportunities with Frojigo and how you can benefit from these tax incentives.
Official Resources
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