Cyprus Holding Company
Cyprus implemented a new tax reform in 2003 as a step towards its entry into the European Union in 2004. The new domestic tax regulations combined with the implementation of European directives have made Cyprus a highly attractive location for holding/intermediary companies.
Cypriot legislation does not offer a specific regime or provisions for holding companies, but tax legislation contains features that make the jurisdiction a favourable holding jurisdiction.
Cyprus is commonly used as an intermediate holding jurisdiction in the following circumstances:
- By international or local groups, companies or private investors who are investing outside of Cyprus, aiming to stream dividends cheaply and easily.
- For holding subsidiaries, which hold significant values and may be sold off in the future.
- To benefit from the favourable tax provisions of the Double Taxation Treaty network, as well as from EU directives.
- Where it may be important to achieve a tax-exempt winding-up of the holding company in the future.
Share Capital and Capital Duty
There are no legal requirements regarding the minimum or maximum share capital of a Cypriot company.
Capital duty is payable upon registration as a fixed amount of CYP 60 plus 0.6% on the nominal value of the authorised share capital. There is no capital duty on the share premium. Therefore the capital duty may be minimised by having a small authorised share capital and a high share premium.
Corporate Tax Rate
The corporate income tax rate for a Cypriot resident company is 10%. The taxable income under the income tax law is calculated based on the accounting profits as defined by the International Financial Reporting Standards (with some adjustments)
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