The Cyprus holding company structure has been widely used for holding, investing, financing, and other purposes. This structure allows businesses to benefit from Cyprus’s extensive treaty network and the many incentives the tax system offers, making it one of the most popular options.
Cyprus is an attractive business and travel destination that offers amongst others:
- Simple tax regime that is fully EU and OECD compliant
- Well drafted laws on Corporate and Commercial matters
- Easy access to international litigation and arbitration
- Advance infrastructure of services
- Excellent education infrastructure
- Cost of living
- Excellent Weather conditions
- Hospitality
The tax base of a Cyprus company is determined from where the Management and Control of the company is exercised. The Management and Control can be fulfilled when:
- The majority of the Board of Directors are Cypriot residents
- Board of Directors’ meetings take place in Cyprus
- Meeting minutes should be documented and kept at the company’s registered office in Cyprus
- General policy of company is formulated in Cyprus
- No general powers of attorney should be issued by the company to non-Cyprus tax resident persons
Holding Companies
Holding companies in Cyprus can be used for accumulation of capital and shareholder value, reinvestment of capital or income into new projects, distribution of profits to shareholders, asset protection.
Cyprus Holding Company Main Advantages
- Corporation tax of 12.5% on worldwide income. This is a flat rate that applies to the net income of the company form all activities worldwide.
- No Corporation tax on Dividends received from companies either in Cyprus or worldwide.
- No Defence Tax (applies to passive income) on the Dividend received provided that:
- More than 50% of the income of the dividend paying company is derived from trading activities and
- The profits of the dividend paying company has been effectively taxed at a rate of more than 6.25%.
- No tax on the disposal of shares and titles in general.
- Based on the extensive network of tax treaties there is no or minimal Withholding tax on Dividends received by Foreign companies.
- No Withholding tax on dividends paid to foreign shareholders either individuals or companies.
- Taking advantage, the Double Tax treaties we have in place with many countries.
- Easy access to European markets.
