A holding company in Cyprus does not produce goods or services itself, but manages or owns other companies’ outstanding stock. Holding companies allow their owners to control more than one company. This type of company in Cyprus enjoys all the benefits of the favourable tax regime and it may be involved in various business activities.
A holding company in Cyprus can take two business forms: as a private limited company or a public limited company. The private limited liability company is the most popular business form chosen for holding companies and it may be set up by at least one individual and a maximum of 50 individuals. Every shareholder in liable to the extent of the amount invested in the company’s share capital. No minimum share capital applies for private limited companies.
Any resident holding companies in Cyprus are subject to the normal taxation rate on their worldwide income. Companies are considered residents in Cyprus if their management and control offices are located in Cyprus. Non-resident companies are only taxed on their income produced in Cyprus. The corporate tax rate in Cyprus is 12.5%.
Cypriot holding companies are not subject to any special taxation regime, however, the dividends and capital gains are usually exempt from tax. Dividends received by a company residing in Cyprus are exempt from corporate tax.
Please watch a short presentation on the holding company in Cyprus:
Advantages of a holding company in Cyprus
Holding companies in Cyprus benefit from an exemption from the withholding tax on payment of dividends, interest and royalties. Cyprus has signed more than 45 double tax treaties with other countries.
Cyprus is an important business hub and a business destination that enjoys a favourable tax regime and legal system. The country is one of the most sought after holding companies destinations.