Cyprus.
 

Whats up with Cyprus? Why are so many adult business based there?

Tax haven

Tax and something to do Russian immigrants in particular, I can't remember exactly what...

They can get another passport than Russian and flee the money trade restrictions.
Gambling licenses, forex licenses, nice weather, good Greek and Turkish food, nice beaches, good connections.

Which side of Cyprus are you referring to, the Turkish occupied side (North Cyprus) or the Native Greek Cyprian side (South Cyprus) ?

Southern side is in the EU and uses Euro currency.

Tax haven + nice beaches :P

I wouldn't dare to incorporate there after bank fiasco.

depend on what you are doing.
a pure adult company will have a problem to find a bank account there but as cyprus is part of the EU you can have your bank account wherever you want.

but to answer the topic question:

cyprus is not really a tax heaven but there are many options to prevent taxes.
additionally cyprus gives you the option to become a cyprus citizen with cyprian passport because in some EU countries the country of origin principle applies in some tax cases.

just a few years ago most of the companies there were pure mailbox companies but here a lot has changed after the fabian thylmann case. today almost all of the companies i know have a real physical branch and employees there on site

for companies above 5 million yearly revenue it might make sense - for smaller companies it doesn't pay off because everything is very bureaucratic and you have to pay many "consultants" and "donations" which then reverses the tax advantage.