CYPRUS HOLDING COMPANY
The Cyprus holding company is a preferred vehicle used by international investors seeking to protect and optimize their assets in a tax efficient way. We can explain exactly how a Cyprus holding company can benefit your business. We provide one stop shop service, including incorporation, a local office address, professional directors and secretaries, accounting and tax services, ongoing compliance and general transaction services.
Benefits & concept
A Cyprus holding company provides the perfect gateway to the European Union. Investors can benefit from a strong legal system based on English common law and a tax regime engineered to promote Cyprus as an international business centre. Cyprus has double tax treaties with over 40 countries including Russia, Ukraine, Iran and China.
A Cyprus holding company can own foreign subsidiaries and engage in financing and licensing activities with minimal or no tax on income received. Foreign shareholders can receive dividends without deduction of withholding tax. If a Cyprus holding company trades in securities (including shares, bonds, or repos), gains on disposal of such securities are exempt from tax in Cyprus.
Recent laws provide for a notional interest deduction not less than 6% for companies capitalized by new equity rather than debt. This puts companies financed by equity on a level playing field with those financed by debt as it allows companies with interest yielding assets to reduce their tax exposure in a simple way without additional leverage.
A Cyprus holding company must have a local registered office and company secretary. It is common practice for directors to be Cypriot residents for tax purposes. The company is required to maintain accounting records and prepare audited financial statements in accordance with International Financial Reporting Standards (IFRS). It must perform yearly tax compliance and limited statutory compliance.
Cyprus is the most commonly used platform for investment into Russia. Namely, a third of all capital investment into Russia flows through Cyprus. Despite the newly introduced Russian CFC rules, Cyprus remains the jurisdiction of choice for investments into Russia. Cyprus has a common law judicial system based on the UK model and follows international accounting rules. These systems, as well as a favorable tax treaty between the two countries, updated only recently, provide protection and peace of mind for Russian investors.
To anyone that visits Cyprus, the affinity between Russia and Cyprus is clearly not only a matter of tax and commerce. The links between the two countries are cultural and social, as well as financial.