Cyprus Holding Company Advantages

A Cyprus Holding Company is gaining international accreditation and is chosen by many entrepreneurs and multinational groups, for all or any of the following reasons and tax benefits offered. A Cyprus Holding Company is a power tool in the hands of the diligent interpreneur giving him the power to reduce his taxes in many cases to zero.

Quick Points for a Cyprus Holding Company:

  • A Cyprus Holding Company can be incorporated in your absence by email, fax and courier.
  • It can be incorporated in four to five working days after approval of the name by the Registrar.
  • You can operate a Cyprus Holding Company from your office in your country. No need to pay social security or pay personal taxes in Cyprus.
  • You can have full confidentiality by using a nominee Director and a nominee Shareholder.
  • A Cyprus Holding Company pays 0% taxes on dividends paid in, for shares, held in other companies.

  • We offer client friendly and reasonable fees. There are no hidden costs. Low yearly maintenance fees.
  • Free legal and financial advice for its operation. Free Holding Company Structures on request.
  • Accounting, audit and vat services for your Cyprus Holding Company through, our highly qualified and professional associate accounting firms.
  • We offer Double Taxation Treaty advice by qualified professionals. Cyprus has over 65 DTTs with as many countries.
  • A Cyprus Holding Company pays 0% Taxes on all dividends paid out to the Shareholders or the Real Owners of the company.

Frequently Asked Questions

One of the great advantages of the Cyprus Holding Company is that it is fully exempted from paying any taxes on the dividends paid out to the Real Owners of the Company. This is what makes it so sought after by international enterpreneurs. If a Cyprus Holding Company carries out trade within Cyprus, then the company will pay full taxes on the profits at 30%, but again not taxes on the dividends paid out to the foreign enterpreneur.
The Minimum capital allowed is €1 and their is no maximum. There is a small tax paid only once on the capital of a Cyprus Holding Company. That is 0.6%. It is paid at the time of the company incorporation to the Registrar of Companies. The Capital of a Cyprus Holding company does not have to be paid in cash to the Company. The responsibility of a Shareholder or Real Owner to the Creditors of the company is limited to his participation in the capital of the company. That is why it is a Limited liability company. The Capital can be in any currency and it can be split in any type of shares such as ordinary voting shares or ordinary non voting shares etc. It is up to you to define the class and the limitations of the share.
If your company is indeed going to be only a Holding company and will not carry out any other operations, investments in real estate, consulting, sales of commodities etc from which profits or other revenue might be generated, then Yes No Vat Registration is necessary. Vat declarations in Cyprus have to be filed every three months.
Our Firm has since 1979 been offering banking services to international client and opening bank accounts for them in Cyprus and in many other countries with great success. Our rate of success is over 98%. Our Firm is official introducer and associate with a large number of international Banks. Regarding the time required for opening your Bank Account the first perquisite is for your full and timely cooperation and response. For a Cyprus Bank account we normally require about 10-12 working days. We can open faster bank account in other countries!
Yes a Cyprus Holding Company can own shares in any other company in any country. There are no restrictions, except those imposed by the EU in the form of embargoes, or by the country in which the other company is registered. A company in Cyprus is a legal person exactly like any other physical person. It can own shares, a car, a house or a ship etc. No restrictions whatsoever.
The formalities required for the incorporation of a Cyprus holding company, are minimal. A copy of the passport, a utility bill or bank statement and to fill in a questionnaire and a CV form which is furnished to you by our Firm. At the stage of opening your company Bank Account however the Bank may request some other documents mostly proof the your income is legitimate.

Client Testimonials

The reason I am using E R Team Global Consultants for 4 years now, for all my offshore business is that they are professionals; they offer great services at very reasonable fees and always on a personal context. I am very happy with them. I fully recommend them.

Peter Johansen,
Sweden

E R Team Global Consultants were recommended to me by the CEO of a large company which trades in electronic goods in the EU, who is a friend of mine about three years ago. They have been handling all my legal and corporate matters since. They are quick and professional and also offer great fees for all their services.

Abraham Goldstein,
Israel

Cyprus Holding Company 

It is well known in the international financial circles that the Cyprus holding company offers a great many tax advantages which make it a simple but powerful tool for international tax planning. We make the Cyprus Holding Company registration simple for you. Usually 5 working days are enough for the company registration. The procedure for the incorporation of a Cyprus holding company is fairly simple, fast and fuss free. Your presence is not necessary. Everything can be done through fax, email and courier. A Cyprus holding company registration, also allows for the use of nominee directors and shareholders for full confidentiality and tax residency of the company in Cyprus. Our firm can offer you full nominee services of directors, shareholders and secretaries if you require. In about 5 of days we can register your Cyprus Holding Company, with the Tax Authorities for your TIC number and in 2 days the vat registration number if required will also be secured. A Cyprus company is usually called a Cyprus IBC which means Cyprus International Company. For more details on how to register a Cyprus IBC follow the link. A Cyprus Holding company requires no special license to operate in Cyprus and worldwide in its capacity as a holding company.

Analysis of the Cyprus Holding Company Registration and its Advantages

One of the major advantages of a Cyprus holding company registration,is that distribution of dividends to non-tax resident beneficiaries (UBOs) is done without the need for cutting back withholding tax, irrespective of whether the beneficiaries hold their shares directly as shareholders or just as beneficiaries through nominee shareholders thus securing their anonymity. This is also true irrespective of whether the beneficiaries or shareholders are real persons or corporations.Another big advantage of the Cyprus Holding Company registration, is that where the shareholders or beneficiaries are not tax resident here, deemed distribution is also not applied, and again this is true for real persons and or corporations.A third very important advantage of the Cyprus holding company registration, is that if a tax resident company pays out dividends to another tax resident company no withholding tax applies except for indirect dividends paid after four years from the end of the tax year in which the profits arose. These provisions are valid for real persons or corporations.

The legislation for the special defense contribution tax provides for the deemed distribution of dividends to real persons or corporations every two years. See more information for the Cyprus holding company registration to understand how simple it is to register a company. A Cyprus holding company is just another Cyprus IBC and therefore its incorporation follows the same procedures and formalities. The only difference is that in the memorandum of association in the section for the activities of the company the first paragraph states that the company will carry out holding activities. See more on Cyprus Company registration.

 Some Of The Tax Benefits Of A Cyprus  Holding Company

  1. It can distribute the profits to their non-resident shareholders entirely tax free. This is one of its major advantages making the corporate tax rate of 12.5% a power tool and a foundation block in your international drive for tax management.
  2. A Cyprus Holding Company pays zero tax on the revenues from the sale of securities. This too is a major tax advantage as in many countries this revenue is heavily taxed.
  3. Receives dividends at very low or even zero withholding tax rate!
  4. No taxes on dividends which it receives as shareholder of other subsidiary companies from abroad!
  5. Zero tax on their profits from a permanent establishment abroad.
  6. Only 2% corporate tax on their revenues from intellectual property rights.
  7. No defence contribution tax which is 30%, on interest income!
  8. Many other tax incentives and advantages.

 No Tax on Revenues From Trading in Securities

  1. According to the law the term securities includes shares, bonds, debentures, options, futures, binaries, collective investment schemes which can be open-ended or closed-ended and repos on titles.
  2. According to the tax department bills of exchange, currency trading, and promissory notes are not securities (titles) and therefore revenue from these sources will be taxable at 12.5%.
  3. In case a holding company is tax resident and it is the owner of immovable property in Cyprus, if all its shares are sold to a third party, it will be considered as sale of that property too, and 20% capital gains tax will be levied on the value of the property as estimated by the IRD.

Dividends Received By A Cyprus Holding Company Are Not Taxable

Any dividends received by a Cyprus holding company, which is tax resident or non-tax resident which maintains a permanent establishment it the country, are not taxable! There are some exceptions to this rule however:
So if the foreign company paying the dividends engages its activities in more than 50% in investments and the dividends paid are of income of more than 50% from such investments such dividends will be taxable provided that the tax paid on such income abroad, is substantially lower than the Cyprus corporate tax which is 12.5% and is lower than that of many other countries in the EU and outside. If you want to do some reading on the subject and on tax planning just follow this link: Cyprus Tax Planning-Cyprus Taxes.

So if that income is taxed for example at 5% abroad, such income will be taxed under the special defence contribution law. This tax hike however can be compressed in two ways. First by taking refuge in the provisions of the double tax treaty of the third country in question. Tax credit is usually given for any foreign tax paid on the profits of the company which is making the dividend pay-out. Secondly the application of a unilateral tax credit relief, such as tax credit which can be given by Cyprus on any third country withholding tax paid on the dividends paid out. Tax is not paid on any dividends paid out to a tax resident company by some other tax resident company. However dividends paid indirectly after four years from the end of the tax year in which the revenue accrued by the dividend paying company. No special defense contribution tax is paid on dividends coming from dividends on which such tax has already been paid. If you need more technical material on Cyprus Company Incorporation its procedures, costs and other advice follow that link.

 Dividends at Very Low or Even Zero Tax

  1. A rich network of double tax treaties with third countries enables a Cyprus Holding Company to receive dividends from other legal entities local or foreign without having to pay tax on those dividends in respect of the same company or even physical person.
  2. The parent-subsidiary directive of the European Union exempts the withholding tax deduction on the dividends and other revenues distributed in the EU by a subsidiary company to the holding company and so it eliminates the double taxation of dividends of the parent companies.
  3. A unilateral tax relief is given for any withholding tax paid on the specific revenue abroad, and so the tax bill is lessened.

Other Advantages Of The Cyprus Holding Company

  1. It pays no withholding taxes on interest income or revenues from intellectual property (royalties).
  2. It can be re-domiciled to a third country, provided the law of that country also allows re-domiciliation of companies from other countries.
  3. Our laws allow flexible re-organization, group relief, and the luxury of losses being carried forward indefinitely.
  4. It can be listed in any foreign stock exchange.
  5. There are no thin capitalization rules.
  6. There are also no controlled foreign company rules.
  7. It can be incorporated and maintained at lower cost schedules than other jurisdictions.
  8. Excellent infrastructures and accounting, legal and banking services.
  9. Corporate tax at only 12.5%, one of the lowest tax rates in the EU

 

 

 

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