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Cyprus has become the most popular holding company jurisdiction in Europe and amongst the most popular in the world. A Cypriot holding company enjoys the following tax advantages:
Full exemption from tax on dividend income received from participations
No withholding tax on distributions of profits irrespective of the country of residence of the recipient or the existence of a double tax treaty.
Full exemption from capital gains tax and income tax on the disposal of securities;
Using a Cyprus company as a holding company of companies in the EU e.g. Germany or of companies with zero tax e.g. Belize, would result in zero taxation on profit distributions from the operating locations to the ultimate investor.
Similarly in the case where a Cypriot company holds subsidiaries in double tax treaty countries e.g. Belarus, Russia, the use of a Cyprus holding company will result in a minimal withholding tax on dividend distributions all the way to the investor.
