Holding companies are set up as an effective means of consolidating ownership of operating subsidiaries. The jurisdiction of the holding company is in most cases a tax-driven exercise. Cyprus has firmly placed itself on the map as one of the most efficient jurisdictions in the European Union, well-known for its low corporate income tax rate at 12.5%.
A Cyprus company can achieve low or zero withholding tax rates when extracting dividends from underlying subsidiaries by relying either on its double tax treaty network, or on the Parent / Subsidiary Directive. Where the investment is outside the EU, Cyprus can rely on its large network of double tax treaties, the rates of which are considered particularly advantageous.
There are no withholding taxes on dividend payments or interest payments to non- Cyprus tax residents regardless of the country of residence of the non- Cyprus tax resident shareholder or the existence or not of a double tax treaty with such country of residence.
Profit from the sale of shares or titles is exempt from taxation.
There is no capital gains tax in Cyprus other than on the disposal of immovable property situated in Cyprus or shares (with the exception of shares listed on a recognised stock market) representing immovable property situated in Cyprus where the rate is set at 20%.
With the transposition of the Merger Directive into national legislation, the transfer of assets and liabilities between companies can be effected without tax consequences within the framework of a reorganisation (merger, demerger, division, exchange of shares). The national legislation has extended the zero tax applicability to cross-border re-organisations with non EU member states.
Some of the services we may assist you with are:
- Company formation services
- Company administration and secretarial services
- Bank Account Management
Please contact us to find out about the other services we provide.