A Cypriot holding company receives dividends from its subsidiaries tax-free, sells shares without capital gains tax, and distributes abroad without withholding tax.
The corporate tax rate on own profit is 15%, and with non-dom status, as a shareholder you pay 0% on your dividend, with only 2.65% GeSY capped at €4,770 per year.
Setting up a Cyprus holding company takes approximately fourteen working days. Below is how the structure works, where the conditions lie that most sites conceal, and exactly what we arrange.
Because there are four fiscal pillars that reinforce each other, plus EU membership and a network of treaties covering more than 65 countries.
The combination is what counts, because low corporate tax alone can be found in several countries such as Bulgaria, Malta, …
What makes Cyprus unique is that profits are also exited tax-free: no withholding tax on distributions abroad, and 0% for the shareholder if they reside on the island as a non-resident.
| Pillar | Rate | Condition |
|---|---|---|
| Dividends received from subsidiaries | 0% | Participation exemption. No minimum interest, but an anti-abuse test |
| Profit on the sale of shares | 0% | No holding period, no maximum. Exception: real estate-rich companies (≥20% Cypriot real estate) |
| Distribution to foreign shareholder | 0% | No withholding tax, no treaty required. Exceptions for low-tax and blacklist jurisdictions |
| Distribution to non-dom shareholder | 0% | Only 2.65% GeSY, capped at €4,770/year. Valid for 17 years |
| Holding company's own operating profit | 15% | Reducible via NID (to 3%) or IP Box (to ~2.5%) |
Ready to protect your capital and benefit from 0% dividend tax?
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From subsidiary to holding to you personally, with taxation at every level.
On a dividend of €500,000 from an EU subsidiary, €500,000 is received by the holding company (0% withholding tax under the Parent-Subsidiary Directive), €500,000 remains (participation exemption), and as a non-domiciled shareholder, you are left with €495,230 net.
The only levy in the entire chain is the €4,770 healthcare contribution.
Will you sell your subsidiary later? The profit on the sale of those shares is taxed at 0% in Cyprus, with no holding period and no maximum.
That is the exit pillar, and for many entrepreneurs, the strongest argument.
| Step | Levy | What remains |
|---|---|---|
| Subsidiary pays out to Cyprus holding | €0 | €500.000 |
| Holding receives (participation exemption) | €0 | €500.000 |
| Holding pays out to you | €0 | €500.000 |
| You as a non-dom (GeSY 2.65%, capped) | €4.770 | €495.230 |
| Net income in private | €4.770 | €495.230 |
Without a real presence in Cyprus, you lose exactly what you are looking for: treaty access and tax residency.
This is the point where cheap startup packages fall short.
Since 2023, a company incorporated in Cyprus is a resident by default, unless a treaty assigns residency elsewhere.
However, residency on paper is not sufficient: foreign tax authorities and treaty partners verify whether the management is actually located there.
What you minimally need as substance for a holding company in Cyprus:
We review your structure, treaty positions, and substance plan before we set anything up.
Not a standard package, but a structure that holds up.
Cyprus does not win on the headline rate, but on what remains at the bottom line.
| Corporate Income Tax | Withholding tax | Shareholder | |
|---|---|---|---|
| Cyprus | 15% | 0% | 0% as non-dom |
| The Netherlands | 25,8% | 15% without treaty | 24.5–31% box 2 |
| Luxembourg | ~24% | 15%, reducible | depending on country of residence |
| Ireland | 12.5% / 25% passive | 25% | up to 40% |
| Malta | 35% with refund | 0% | depending on refund mechanism |
We design and help you brainstorm, and only then do we focus on:
Relevant information
Any questions? Feel free to ask us!
A holding company is a company that does not manufacture products or provide services itself, but is established solely to own and manage shares, valuable assets (such as real estate or patents), and profits of other companies (the operating companies).
It acts as a financial vault: by safely transferring profits from the operating company to the holding company, you shield this capital against operational and business risks such as bankruptcy.
Moreover, a holding structure, especially in combination with a jurisdiction like Cyprus, offers enormous tax advantages, as dividends can often be received and reinvested tax-free.
A Cyprus holding company is a regular Cypriot private limited company (Limited Liability Company) whose primary purpose is to own and manage shares, assets, or intellectual property of other (subsidiary) companies. It is used as a secure, tax-optimized vault to centralize profits.
The biggest advantages of a holding company in Cyprus are the tax exemptions.
The holding company pays 0% tax on incoming dividends from subsidiaries, 0% tax on profits from the sale of shares and crypto (Capital Gains Tax), and 0% withholding tax on outgoing dividends to shareholders.
A successful Cyprus holding company formation requires more than just filling out an online form. You must register the entity with the Department of Registrar of Companies, draft a Memorandum and Articles of Association, and, very importantly, demonstrate local 'substance' (such as an office address and management) to pass the strict bank compliance checks for your business account. Cyprus-Consult handles this complete A-to-Z process starting from €1,650.
0% on dividends received under the participation exemption, 0% on profit from the sale of shares and securities, and 15% corporate income tax on its own operating profit.
No, 0% to non-residents, regardless of treaty or percentage of interest. Exceptions apply to affiliated companies in low-tax (5%) and blacklisted jurisdictions (17%).
Over 65, including all EU member states and many emerging markets. Treaty access does require that your holding company qualifies as a Cypriot tax resident, with the corresponding substance.
Yes. Every Cyprus Ltd is subject to audit, regardless of size. Expect annual compliance costs of €2,500 to €5,000.
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