The Cyprus Holding Company

Cyprus Holding Company Benefits

A Holding Company in Cyprus enjoys the same tax advantages as a Cyprus Limited Company, which includes:

• 12.5% of the net profits is payable as tax by the Cyprus Holding Company and any other Cyprus Limited Company (one of the lowest across European Union).
• Effective tax rate as low as 2.5% Corporate Tax on revenues from Intellectual Property Rights (IP Box Regime).
• Dividends received from other Cyprus tax resident companies are exempt from all taxes, subject to certain anti-avoidance provisions.
• 0% withholding tax on dividends received from EU subsidiaries by virtue of the EU Parent-Subsidiary Directive, provided that certain conditions are met (Under EU Parent-Subsidiary Directive, a company qualifies as a parent company if it holds at least 15% of the shares in the subsidiary company. The minimum shareholding as from 1^st January 2009 shall be 10%.)
• 0% tax on dividend income received from a subsidiary company from abroad (provided that the holding is at least 1% of the share capital in the overseas company). However, where the dividend is derived from abroad the exemption does not apply if both of the following conditions exist 1) where more than 50% of the activities of the overseas paying company result directly or indirectly in passive income (non – trading income), and 2) the tax burden on the foreign company income is significantly lower than the Cyprus corporate rate (i.e. less than 50% of the 12.5% Cyprus corporate tax rate).
• 0% withholding tax on dividends or interest or royalties paid by a Cyprus resident company to non-resident shareholders (certain conditions apply to royalties on rights used within Cyprus). This may be subject to double tax treaties between countries.
• 0% capital gains tax on profits arising from sale of securities, including debentures, bonds, shares and others.
• 0% withholding tax is applied on the distribution of profit, except those arising from the disposal of property in Cyprus or profits arising from the disposal of the shares of a company that owns real estate in Cyprus.
• 0% capital gains or income tax applied on liquidation of the company.
• It can be re-domiciled to a country in EU or a third country (provided is allowed by that country law).

• Double Tax Treaty network covering more than 60 countries.

• Cyprus legal system closely aligned with English common law system, which is credible, transparent and flexible for conducting business.
• Freedom of movement of foreign currency, with the possibility of opening and maintaining bank account in foreign currency inside or outside of Cyprus.
• A Cyprus company can carry forward losses and the amount of such losses is set off against the Cyprus Company’s taxable profit over the next five years.
• Loss of a Cyprus tax resident company can be set off against the profit of another company of the group which is also Cyprus tax resident.
• Current year tax losses within group of Cyprus tax resident companies can be surrendered provided that the group companies are members of the same group for the entire year.
• Low incorporation, administration and maintenance costs.

Our Legal Services

Paris Mavronichis & Co LLC can assist you in every step of the procedure:

• Provision of corporate legal advice and tax advice (in collaboration with our trusted associates).
• Provision of prompt and personal bespoke service by our attentive and responsive lawyers.
• Company formation, corporate administration, arrangement of office space and nominee services.
• Opening and maintaining bank account for the Company and provision of bank signatory services.

Please feel free to contact us if you have any question and to discuss how we can be of assistance to you.

DISCLAIMER:

PARIS MAVRONICHIS & CO LLC accept no duty of care or liability for any loss occasioned to any person acting or refraining from action as a result of any material in this publication.

The material contained herein is provided for informational purposes only and does not constitute legal advice nor is it a substitute for obtaining legal advice from an advocate.  Each situation is unique, and you should not act or rely on any information contained herein without seeking the advice of an experienced advocate. PARIS MAVRONICHIS & CO LLC will be glad to assist you in this respect.