Cyprus is an ideal place for holding company location.
The following factors are important when deciding the location of a holding company:
- Tax treatment of inward and outward dividends.
- Tax treatment of capital gains arising from sales of subsidiaries.
- Taxation of consolidated profit.
- Reputation of jurisdiction where the holding company was formed.
- Cost of incorporation and maintenance.
- 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. Registration of a Cyprus holding company is only €1,500, including registered office, Secretary, incorporation set including apostille and all registration fees. Nominee service is available at additional cost.
Annual audit cost
Annual audit cost of a Cyprus holding company is 25%-30% lower than in continental Europe.
Russian citizens can gain Cyprus tax residency by staying only 60 days on island, whats the catch?
Cyprus is once again working to improve its economic desirability and will be able to increase its alternative business base for Russians with good creditworthiness.
Cyprus tax department releases new guidance on CRS deadlines and the online portal
The Cyprus Tax Department has released a notification to all Cyprus based Financial Institutions & Service Providers of the new guidance notes on the Automatic Exchange of Financial Account Information and other information relating to the Common Reporting Standard (CRS).
Hong Kong establishes AEOI agreement with Indonesia
Last week, Hong Kong finalised and signed an agreement with Indonesia to allow for the automatic exchange of financial information (AEOI) regarding all tax matters.
New requirement for Scottish LPs to disclose all PSC information to the Companies House
The legislation for Scottish Limited Partnerships have changed regarding the disclosure of information. Going forward, Scottish LPs will have to register all information about PSCs and Business Owners with the UK Companies House from July 24th 2017.
Key amendments to the Singapore Companies Act
Significant changes to the commercial and company law in Singapore have come into effect. The changes to the Singapore Companies Act will hopefully make business entities more transparent as well as mitigating the risks of money laundering and terrorist financing.
Panama Law 52: Updated legislation for all legal entities
Last month the Government in Panama officially approved Law Number 52; legislation which creates the regulatory framework for the implementation regarding automatically exchanging tax information, in a further attempt to comply with global regulations for tax transparency, and to be fully in line with all supervisory and compliance matters.
Important 2016 reporting deadlines for BVI Financial Institutions
Officials from the British Virgin Islands have come together to clarify various filing deadlines as per the automatic exchange of information systems in a press release.
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