The Cyprus Holding Company
Cyprus as an international financial centre is an ideal tax efficient gateway for investments in EU as well as non EU companies. It is widely used as an ultimate or intermediary holding company in a number of structures including the holding of operating, financing, real estate, as well as shipping companies.
| Key features beneficial to the Cyprus Holding companies | |
| KEY CRITERIA | COMMENT |
| Incoming dividends | Extensive double tax treaties, unilateral reliefs and EU Directives |
| Dividend income | Generally non taxable |
| Outgoing dividends | No withholding tax to non-residents |
| Capital Gains | Full tax exemption of gains |
| Foreign PE profits | Exempt |
| Reorganization and Group Relief | Group relief is allowed and losses set off against future profits |
| Controlled Foreign company | No CFC legislation |
| Thin Capitalization | No provisions for debt to equity ratio |
| Transfer pricing | No TP rules. Arm’s length principle applies |
| Redomiciliation | Redomiciliation is permitted |
| Listing in international Stock Exchanges | Tax efficient and easy process |
| Interest income | Interest taxed only at 12,50 percent |
| Interest and Royalties Withholding | No withholding taxes, only for royalties (10%) for their use in Cyprus |
| VAT Registration | Holding activities are not obliged to register |
| Liquidation | Distribution of assets without any tax |
| Stamp Duty | Only for assets existing in Cyprus |