Think strategically...
 Holding
Companies
The Cyprus tax policy positions Cyprus as an ideal jurisdiction for Holding
Companies. In summary, a Cyprus Holding Company offers the following tax
advantages:
-
lowest corporate tax rate in the European
Union at 10 per cent
-
one of the lowest top statutory personal
income tax rate at 30%
-
extensive double tax treaties network with
over 40 countries
-
enabling lower withholding tax rates on
dividend or other income received from the subsidiaries abroad
-
no withholding tax on dividend income
received from subsidiary companies abroad under certain conditions
-
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
-
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
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act wisely...
Private
Funds
Cyprus offers a unique opportunity for experienced
individuals or financial companies that can quickly incorporate and operate a
private fund with minimum expenses.
Private funds are registered under the Central Bank of Cyprus. The Fund can
offer its units to a maximum of 100 experienced investors. The fact that Private
Funds are registered through the Cyprus Central Bank resolves to a much simpler
procedure rather than going through the SEC. This process is actually a vetting
procedure of the Fund Directors as well as having the required functions in
place (Fund Manager, Administrators, Auditors, Custodian etc).
A Private Fund is basically a company with 2 classes of shares. Management
shares have voting rights and are owned by the Fund Directors and Participating
shares are issued to the experienced investors at a premium price. This
minimizes the capital duty.
Just as any other Cyprus company, the fund's income will be taxed in Cyprus at
10% (tax credit is provided against any tax paid abroad) and dividends will be
distributed to the unitholders at 0% withholding tax based on the Local Income
Tax Law. Furthermore, the fund can exploit the extensive Double tax Treaty
network in order to attract dividends, interest and royalties from its operating
countries at lower rates than normal. For example, a fund investing in e.g. UK,
Russia or Ukraine will attract a 0% WHT on the profits paid to the Cyprus Fund
after invoking the DTT between Cyprus and the respective countries.
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Redomiciliation
of a Foreign Company to Cyprus