Cyprus offers important possibilities for international tax planning. One such possibility which has proved to be very beneficial for international businesses is the use of a Cyprus Holding Company.
Tax Advantages of forming a Cyprus Holding Company
- Income from dividends is tax free (with minor exceptions)
- Gains on the sale of shares are tax free in Cyprus
- Capital gains on disposals of capital assets are tax free in Cyprus (except only on real estate situated in Cyprus)
- Proceeds from the liquidation of subsidiaries abroad are tax free in Cyprus
- Profits from activities of a Permanent Establishment abroad are tax free in Cyprus
- Lower or zero withholding tax rates in other countries on remittances of income from dividends, royalties or interest due to wider applicability of Treaties for the Avoidance of Double Taxation and / or due to the EU Parent-Subsidiary Directive
- Distributions by Cyprus Holding Companies to their non-resident shareholders are free of tax in Cyprus
Cyprus may well be the best location within the EU for the establishment of a Holding Company.
International businesses may derive very important tax (and other) benefits from using a Cyprus Holding company. This is mainly due to the combination of completely tax-free income from dividends and the reduced (or eliminated) withholding taxes from Cyprus' extensive network of Double Tax Treaties for the Avoidance of Double Taxation.
Registration form for Cyprus Companies - English