Cyprus

Company Formation & Holding Structures

‍Cyprus is one of Europe's leading jurisdictions for international holding companies. Benefits include 12.5% corporate tax (one of the lowest in the EU), 0% withholding tax on dividend payments to non-residents, full participation exemption on dividends and capital gains from qualifying subsidiaries, and extensive double tax treaty network covering major economies. Substance requirements are manageable, local directors, office space, and economic activity required but achievable. Popular for software licensing, IP holding, e-commerce headquarters and investment holding platforms.

Residency by Investment
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• Cyprus Permanent Residency: €300,000 real estate investment + €30,000 deposit in Cyprus bank. Grants permanent residency for investor, spouse, and dependent children under 18. No physical residence requirement to maintain status. Processing takes 2-4 months.
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• Benefits: Visa-free travel within Schengen for 90 days per 180-day period, path to Cyprus and EU tax residency with proper planning, access to Cyprus healthcare and education systems
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• Does not grant citizenship or EU passport (separate citizenship by investment program suspended indefinitely as of 2020)

Tax Benefits
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• 12.5% corporate income tax on trading profits
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• 0% withholding tax on dividends paid to non-resident shareholders
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• 0% capital gains tax on sale of shares (with exceptions)
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• IP Box regime: 80% deduction on qualifying IP income (effective 2.5% tax rate)
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• Non-domiciled residents exempt from Special Defense Contribution (SDC) on dividends, interest and rental income for 17 years
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• Extensive treaty network prevents double taxation

Banking & Substance
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• Full EU banking access and SEPA payment integration
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• Corporate banking with major Cypriot and international banks
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• Substance requirements: local directors, registered office, annual audits, tax filings
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• English common law legal system (predictable, business-friendly)
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• Strong regulatory framework (EU standards, Central Bank of Cyprus oversight)
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• Popular for fintech, e-commerce, consulting, software and holding company operations