Cyprus Holding Company
Opening a Holding Company in Cyprus
It takes about 7-10 working days to complete a Cyprus Holding Company Formation procedure. The various aspects of the procedure are explained below:
The process starts with choosing the name of the Company. The applicant is expected to submit three different Company names, either in Latin or Greek characters. Providing multiple alternative Company names eliminates any possible synonymity with existing company names. The company names submitted must have the word “Limited” or “Ltd” at the end of each.
Once the Company name has been approved, the next step is to submit a detailed record of the Company’s activities, the amount of the share capital, the internal Company regulations, and other requirements. The applicant shall submit these documents to the lawyer, who will prepare the Memorandum of Articles and Associations on their behalf.
According to the law of Cyprus, each Company should appoint at least one Shareholder, which can be a legal entity or a physical person.
The Cyprus Company must have a Registered Office at any address located in Cyprus.
Every Cyprus Limited Company must appoint at least one Director and a Secretary. It is best to have Cypriot Residents, or foreigners staying permanently in the country as majority of Directors. This ensures that the management and control take place in Cyprus, giving the Company a tax advantage of a low tax rate of 12.5%. Also, it is recommended to have a Cypriot resident as a Secretary – this ensures prompt signing of the main Company documents.
Cyprus Holding Company Benefits
A Holding Company in Cyprus enjoys the same tax advantages as a Cyprus Limited Company, which includes:
- Only 12.5% of the net profits is payable as tax by the Cyprus Holding Company and any other Cyprus Limited Company. This rate is one of the lowest in the EU.
- The Cyprus legal framework runs on the principles of the English common law, which is well-known for being credible and transparent in business practices.
- The opportunity to enjoy multiple double taxation treaties with other countries.
- Absolute freedom of movement of foreign currency, making it possible to maintain a bank account in foreign currency in any country of the world.
- The option to transfer Company losses to the following year and the choice to claim a group relief.
Revenues from the sale of securities, including debentures, bonds, shares, and others, are not taxable.
Dividends received as a shareholder for other subsidiary Companies are not taxable. But certain conditions apply in the case of dividends from abroad.
Royalties or Dividends (except intellectual property used in Cyprus) paid by a Cyprus Company to non-resident shareholders shall be effected without any withholding tax. But this is subject to double tax treaties between countries.