Holding Companies

A Cyprus holding company can be effectively utilised for international tax planning purposes, and at the same time enjoy the status of being located at a reputable business centre. In summary, a Cyprus holding company offers the following advantages in relation to the major tax considerations:

  • No withholding tax on dividend income received from subsidiary companies abroad.
  • Double tax treaties with over 45 countries, enabling lower withholding tax rates on dividend or other income received from subsidiaries abroad.
  • Being an EU member state, holding companies registered in Cyprus may also enjoy no withholding tax on dividends received from EU subsidiaries.
  • No withholding tax on capital gains and income on the disposal of neither the shares of the subsidiary's share capital nor the shares of the Cyprus holding company.
  • No tax on capital gains or income on the liquidation of the Cyprus holding company.
  • No withholding tax on distribution of profits, subject to conditions.
  • Outward dividends by the Cyprus holding company to its non-resident shareholders are exempt from any withholding taxes.
  • Profits earned from a permanent establishment abroad are fully exempt from Cypriot tax, subject to certain conditions.
  • A diversified group of Cyprus companies belonging to a Cyprus holding company can set off Group relief for the utilisation of tax losses.
  • No minimum holding period.