The Cyprus holding company is defined as per it is purpose. Typically, the Cyprus holding company doesn´t sell or offer services or products, construct or manufacture products, or business operations. However, holding companies own shares and exerting control over the stock in other companies normally engage in trading activities.
Cyprus is a very attractive jurisdiction in which to establish a holding company due to its different advantages.
Main Advantages
- There is no Corporate tax on Dividends received from companies in Cyprus or worldwide. Dividends received by a Cyprus holding company from its subsidiaries are exempt from corporate tax.
- There is no Withholding tax on dividends paid to foreign shareholders, whether individuals or companies.
- No Special Defence Tax (applies to passive income) on the Dividend received provided that:
- More than 50% of the income of the Dividend paying company is derived from trading activities and
- There is no tax on the disposal of shares and other securities.
- They are taking advantage of the Double Tax treaties Cyprus has in place with many countries. Cyprus has an extensive network of double tax treaties with more than 60 countries, including major economies. These treaties will eliminate or minimize double taxation on income a Cyprus holding company and its subsidiaries earn.
- EU Membership and Regulatory Framework, Cyprus has been a member of the European Union (EU) since 2004, benefiting from the freedoms of movement, capital, and services within the EU market.
