Uses of Cypriot Company

Cypriot Investment Holding Company

Below there is a few of the reasons why a  Cypriot Investment Holding Company is the ideal gateway to the European Union’s market.

  • Paying and receiving dividends with no withholding tax liability
  • Cyprus has a of 65 Double Tax Treaties with countries
  • There is no capital gains tax on the disposal of the shares of the subsidiaries, unless the subsidiaries hold real estate property that is located in Cyprus
  • EU Parent Subsidiary Directive apply

Financing and/or Treasury Company in Cyprus

A Cypriot Financing Company is used to provide interest bearing loans to its subsidiaries and result in a beneficial accumulation of interest income.

The main benefits of using Cypriot Financing and/or Treasury Company are:

  • There is no withholding tax regards to receiving of interest from intra-group lending (12,5%)
  • The fact that there are no thin capitalization rules / no debt-to-equity requirements
  • Cyprus’s legislation is in full compliance with the OECD directives
  • Interest paid to nonresident creditors is not subject to any withholding taxes
  • The EU Interest and Royalty Directive applies

Import – Export Company in Cyprus

A Cypriot Import – Export Company can be used for the invoicing and re-invoicing of goods and services, as well as for the receipt of trading commissions, from any country to any destination.

Main Benefits of using a Cypriot Company for Import – export business:

  • Access to the European market of 500 million consumers
  • Access to Grants and Incentives from the Cypriot Government and the EU
  • One of the Lowest Tax rates in the EU, only 12,5% with easy to understand rules
  • Access to a deep pool of talent to work for the company as Cyprus has many graduates from the top Universities of the UK

Cypriot IP Holding Company

A Cypriot Intellectual Property Holding Company is mostly used for developing and managing of intellectual property.

The new legislation introduced in Cyprus regarding income for intellectual property rights make Cyprus one of the best Jurisdictions in the world and probably the most favored in EU for establishing an Intellectual Property Holding Company.

The main benefits derived from the introduction of the new legislation know as ‘IP box’ are:

  • Five year amortization period
  • 80% exemption of profits from exploitation of IP rights
  • Exemption of profits on disposal of IP rights or full exemption from tax if  the assets are hold in a separate company and the shares of that company are disposed instead of the assets themselves
  • Net royalty profits are consider as operating profits and are taxed at 12,5% but the effective tax rate in many cases is as low as 2,5%, one of the lowest in EU
  • Cyprus’s legislation is in full compliance with the OECD directives

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