Holding Companies

Cyprus is an ideal place for holding company location.
The following factors are important when deciding the location of a holding company:

  1. Tax treatment of inward and outward dividends.
  2. Tax treatment of capital gains arising from sales of subsidiaries.
  3. Taxation of consolidated profit.
  4. Reputation of jurisdiction where the holding company was formed.
  5. Cost of incorporation and maintenance.
  6. Cost of audit of consolidated accounts.

Tax treatment of dividends

Dividends received from subsidiaries are exempt from profit tax.

Dividends paid to non-residents are exempt from withholding tax.

Tax treatment of capital gains

There is no tax liability when a holding company disposes shares in subsidiary or associated company.

Tax treatment of consolidated profit

There is no controlled foreign company rule. There is no income tax on consolidated profit in hands of a Cyprus holding company. This simply means that a profit centre could be in Singapore or Hong Kong (both jurisdictions are applying territorial taxation principle where non-Singapore or non-Hong Kong source income is not a subject to income tax in Singapore or Hong Kong), or even a “tax haven” like Belize where all profit is earned but consolidated in the hand of Cyprus company and show in consolidated profit a loss account and balance sheet without incurring any tax liability in Cyprus.

Reputation of jurisdiction

Cyprus officially joined the European Union from the 1st of May, 2004.

Cost of incorporation and maintenance

Cost of incorporation is relatively low, please, find it here. 

Annual audit cost

Annual audit cost of a Cyprus holding company is 25%-30% lower than in continental Europe.

Take the next step, we are here to help.

Register a Cyprus company.
Open a Cyprus bank account.

  Resources:

Notional Interest Deduction: A Useful Tool for Cyprus Companies

Notional Interest Deduction: A Useful Tool for Cyprus Companies

The corporate income tax rate of a Cyprus-resident company is 12.5% on its global taxable revenue, with unilateral credit for related foreign tax suffered. Moreover, non-Cyprus residents are not liable to pay Cyprus withholding taxes on payments. Frequently, the effective corporate tax rate is much lower, or even as low as nil, due to various tax exemptions and allowances.

How Cyprus is Retaining its Competitive Edge as a Favourable EU Jurisdiction for Tax Purposes

How Cyprus is Retaining its Competitive Edge as a Favourable EU Jurisdiction for Tax Purposes

The recent implementation and increasingly stringent tax developments globally can affect companies with offices in different countries; rendering them non-viable if certain factors are not carefully considered.

The Legal Consequences of the Unlawful Transfer of Personal Client Data to Third Parties: UK Case Study

The Legal Consequences of the Unlawful Transfer of Personal Client Data to Third Parties: UK Case Study

As per English common law, banks are liable to both criminal and civil proceedings. According to the case of Bank of Scotland v A, banks have an ability to choose between criminal and civil liability in litigation with their customer. Nevertheless, ‘the last bit’ of this choice has to be decided by the court.

Dormant Companies: A Definition by the Cyprus Inland Revenue Dept

Dormant Companies: A Definition by the Cyprus Inland Revenue Dept

Following Circulars No.2011/11 and No.2011/5, this article will explain what a "dormant company" is, its symptoms and consequent requirements. The following is an extract from PART 1.7 of the "Company Income Statement" form (EP 4), whereby a definition of a dormant company is considered to be a company that meets the following conditions:

How to Effectively Use Software to Improve the Purchasing Process Within your Company

How to Effectively Use Software to Improve the Purchasing Process Within your Company

Companies all over the world rely on controls over expenditure at the point of logging a supplier invoice or receipt, which over time can cause difficulties in producing timely and reliable account management.

Information Security & Factors that Contribute to Data Leakage in the Ukrainian & UK Banking Sector

Information Security & Factors that Contribute to Data Leakage in the Ukrainian & UK Banking Sector

One of the most important regulatory banking documents on information security is the Regulation on bank secrecy and confidential information, which exists in every bank. This document entered into legal force by the banking sector’s order.

Troika Lenders Visit Cyprus Following Withdrawal From Bailout Programme

Troika Lenders Visit Cyprus Following Withdrawal From Bailout Programme

Representatives from the troika of Cyprus’ international lenders, the International Monetary Fund, European Commission and the European Central Bank, recently visited Cyprus for conducting their 4th post-scheme investigation following the islands recent withdrawal from the economic adjustment programme as agreed with the terms of the bailout.

The EC's Plans to Reduce NPLs in Europe May be Beneficial for Cyprus

The EC's Plans to Reduce NPLs in Europe May be Beneficial for Cyprus

Last month, the European Commission proposed an ambitious and comprehensive package of measures to tackle non-performing loans (NPLs) in Europe, making the most out of the promising progress already made in reducing risks in the banking sector.