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Cyprus Holding Company Registration

CYPRUS COMPANY / Cyprus Holding Companies

A Cyprus holding company is generally set up as an ordinary company resident in Cyprus which, besides participating in domestic and/or foreign companies, may also have other activities such as trading, manufacturing, financing. There are no restrictions on its activities.
The Companies Law of Cyprus provides for private and public companies. The registration procedure is simple and straightforward and is effected by filing with the Registrar of Companies the company’s Memorandum and Articles of Association and pertinent particulars.
The conversion from a private company into a public company can be done through a simple filing procedure prior to listing. 

A private company is a company which by its Articles of Association specifically:

  • restricts the right to transfer its shares
  • limits the number of its shareholders to 50
  • prohibits any invitation to the public to subscribe for its shares or debentures
  • prohibits the issue of bearer shares

A public company must adhere to the following:

  • a minimum of 7 shareholders
  • a minimum of 2 directors
  • hold a statutory meeting and the directors make a statutory report to its shareholders
  • may issue share warrants
  • before issuing shares or debentures to the public it must issue a prospectus or a statement in lieu of a prospectus

  • For a group that is relocating to a new jurisdiction or on formation of a new publicly-traded corporation with international operations
  • For groups, international or domestic investing outside Cyprus, aiming at dividend income streams. Such dividend in most cases is tax exempt in Cyprus
  • To hold subsidiaries that have scope for significant capital appreciation, that may be spun off or sold in the future. Profits arising from disposals are not taxable in Cyprus
  • To benefit from the favourable withholding tax provisions of the Cypriot double tax treaties network, the EU Parent Subsidiary Directive and other EU Directives
  • To avail of the favourable repatriation provisions under Cypriot tax law which allows payment of dividend, interest and royalties, in most cases, without payment of withholding tax
  • Suitable for any fund or investment vehicle, as there is no tax on transactions in securities even if this is the trading activity of the entity
  • Where it may be important to unwind the holding company structure at some stage in the future in a tax free manner. No capital gains tax on disposal of shares, dividends exempt from taxation subject to easily met conditions, no taxes on liquidation or capital reduction to non Cyprus resident shareholders.
  • To hold real estate companies for a tax free disposal of property. Since Cyprus imposes no tax on the disposal of shares (with the exception of gains derived from real estate situated in Cyprus) a Cyprus company offers an ideal way of holding a subsidiary real estate company. By selling the shares in the subsidiary real estate Company to a prospective buyer effectively allows for the tax free disposal of the property
  • To hold IP companies for a tax free exit route. Since Cyprus imposes no tax on the disposal of shares, a Cyprus company offers an ideal way of holding a subsidiary IP company. By selling the shares in the subsidiary IP company to a prospective investor effectively allows for the tax free disposal of the intangible assets

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