What are the benefits of a Cyprus Holding Company?

Cyprus is one of Europe’s most attractive jurisdictions for holding companies. Its strategic location, favorable tax system, and strong legal framework make it ideal for international investors, entrepreneurs, and multinational corporations.

1. Tax Efficiency

• Standard corporate income tax is 12.5%. For MNE or large domestic groups with consolidated revenue ≥ €750m, Cyprus applies the EU Pillar Two rules (IIR/UTPR and a domestic top-up tax) to ensure a 15% minimum effective tax rate.
• Dividend income received by a Cyprus company is generally exempt from corporate income tax; a 17% Special Defence Contribution (SDC) may apply to passive dividends when the payer mainly earns investment income and faces a significantly lower foreign tax burden.
• Profits of foreign permanent establishments are exempt by default, but a taxation election is available so the company can claim foreign tax credits.
• Highly suitable for international tax planning.

2. Extensive Double Tax Treaties

• Over 60 treaties to prevent double taxation.
• Reduced withholding taxes on cross-border transactions.
• Simplifies management of global investments.

3. EU Membership Advantages

• Full access to the European market.
• Legal protections under EU directives.
• Compliant with international standards, boosting investor confidence.

4. Flexible Corporate Structure

• Incorporation is possible with just one director and one shareholder.
• Operational work can be done remotely, but to maintain Cyprus tax residence, you should ensure management & control (e.g., board meetings and key decisions) take place in Cyprus. Since 31 Dec 2022, a Cyprus-incorporated company is deemed a Cyprus tax resident unless it is tax-resident elsewhere.

5. Asset Protection & Confidentiality

• Solid legal protection for both shareholders and what the company owns.
• Cyprus provides commercial confidentiality within a strict AML/KYC framework. The UBO Register’s public access is suspended (since 23 Nov 2022), yet competent authorities and obliged entities retain access.

6. Efficient Profit Repatriation

• Dividends to non-resident shareholders are generally paid without Cyprus WHT.
• Exceptions apply: payments to entities in EU-listed non-cooperative jurisdictions (currently 17% on dividends; interest 17% from 2024; royalties 10%), and from 1 Jan 2026, a 17% WHT will also apply on dividends to associated companies in ‘low-tax jurisdictions’ (LTJ), while interest and royalties to LTJ become non-deductible.

7. Strategic Location

• Positioned between Europe, the Middle East, and Africa.
• Serves as a hub for business in the area.

With Offshore Company Services, getting your Cyprus holding company efficiently incorporated and fully compliant with regulations, plus it's set up to save you money on taxes. Our team takes care of getting you incorporated, walks you through the rules, and sets up your company structure, so you can focus on expanding your business.