Cyprus Holding Company
A Cyprus holding company is a limited liability company incorporated in Cyprus and its major objective is to participate wholly or partly in the ownership structure of companies both in Cyprus and overseas.
Holding companies incorporated and manage their operations through Cyprus enjoy a wealth of legal and tax advantages provided by Cyprus flexible legal framework, which have ranked the country as a prestigious business centre in Europe and highly preferred by businessman across the globe.
The major advantages of a Cyprus holding company is the legal framework which allows international business easy set up and management of operations via Cyprus of the subsidiaries and investments across the globe, and a tax system which provides substantial advantages in relation to other jurisdictions to both Companies and professionals managing the companies.
Cyprus is a preferred business centre located in the Mediterranean Sea neighbouring Greece, Egypt, Italy and Turkey, a full member of the European Union since 2004 with a multiskilling work force can provide to business a favourable environment for international successful expansion.
A holding company is a great tool for various business activities in Cyprus.
Why a Cyprus holding Company?
Cyprus holding companies ensures a reduction of risk for the owners and can simultaneously provide the possibility of ownership and control in more than one company overseas and in multiple jurisdictions.
Cyprus is one of the most favourable destinations for the incorporation and management of holding companies in Europe. Recent changes to the taxation of dividends using a Cypriot holding company offers significant economic advantages to investors or entrepreneurs operating or wishing to expand overseas.
Overseas Companies, whose shares are held by Cypriot holding company can distribute dividends to the parent with low or zero corporate tax rates based on a vast network of double tax treaties with more than 80 countries across the globe and advantages provided by EU Parent Subsidiary directive.
The parent company is considered tax resident of Cyprus and can benefit from the favourable tax regime of the island, where control and management is exercised from Cyprus. This means that should be fulfilled by any criteria for proving that the company headquarters and operating from Cyprus. A Cyprus Company which is managed and controlled through Cyprus, then it is taxed at the current tax rates on its global income.
A Cyprus holding Company is providing the following advantages to the owners:
- Corporate tax rate of 12, 5%.
- Total exemption from the scope of Corporate Tax of dividends receivable from subsidiaries;
- Exemption form tax of profits derived from Permanent Establishment abroad;
- Exemption from withholding tax on the repatriation of income anywhere in the world either in the form of dividends, interest and on all royalties (except when intellectual property is used in Cyprus).
- No capital gains tax is applied on profits arising from the sale of securities such as shares, bonds, exchange contracts etc;
- No capital gains or income tax is applied after the liquidation of the company;
- No 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;
- Tax allowances on the investment in Cyprus Companies share capital can be applied since 2016.
- Distribution of dividends to the owners of the Cyprus Companies is fully exempt from Cyprus withholding tax;
- Owners of the companies obtaining the Non-Dom status as Cyprus Tax residents are fully exempt from any withholding taxes on dividends or interest earned.