Structural optimization
Protect your assets and eliminate withholding taxes.
A Cyprus Holding Company is the gold standard for entrepreneurs looking for a tax-efficient exit or profit reinvestment strategy.
Most founders in Europe hit a “tax wall” when their business grows. You likely face these three critical bottlenecks:
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The 2026 framework is designed to protect international investors from double taxation while ensuring full compliance with OECD “Pillar Two” global minimum tax standards.
| Feature | Pre-2026 Rules | 2026 Voted Rules |
| Incoming Foreign Dividends | 0% (subject to conditions) | 0% (Guaranteed) |
| Capital Gains (on Shares) | 0% | 0% |
| Corporate Tax Rate | 12.5% | 15% |
| Deemed Dividend Distribution | Mandatory after 2 years | PERMANENTLY ABOLISHED |
| Withholding Tax (Outbound) | 0% | 0% (to White-Listed jurisdictions) |
Here’s the practical “tax benefit map” that matters for real-world holding companies.
A Cyprus holding structure acts as a tax-neutral “money box.” It allows you to collect, hold, and reinvest global profits without the constant drag of local corporate or dividend taxes.
EU or non-EU founders who want a Cyprus LTD fast and fully online
Freelancers, agencies, consultants, e-commerce founders, holding structures
Founders who value transparent fixed pricing and a clear workflow
Teams that want legal + accounting-backed execution, not a “blog guide”
A holding company in Cyprus acts as an intermediary “layer” between operating subsidiaries and the ultimate beneficial owner (UBO).
Dividends paid from your operating companies (in the EU or worldwide) can flow into the Cyprus holding company with 0% tax in most cases. This allows you to accumulate capital for reinvestment without losing 20-30% to immediate taxation.
If the Cyprus holding company sells the shares of a subsidiary, the profit is 100% exempt from Cyprus tax (provided the subsidiary does not own significant real estate in Cyprus). This makes it the ideal vehicle for tech startups and private equity exits.
With the abolition of Deemed Dividend Distribution (DDD) in late 2025, companies are no longer forced to pay out dividends and pay tax every two years. You have total freedom to retain profits inside the company for expansion.
| Feature | Traditional EU Holding (BE/NL/DE) | Cyprus Holding Structure |
| Tax on Dividends Received | Often subject to “leakage” or complex rules | 0% (Participation Exemption) |
| Tax on Sale of Subsidiaries | High Capital Gains Tax | 0% Tax on Disposal |
| Outbound Dividend Tax | 15% – 30% WHT | 0% (Non-resident/Non-dom) |
| Maintenance Costs | Very High | Lean & Digital-First |
| Substance Requirements | Strict & Expensive | Pragmatic & Scalable |
The point of a holding company isn’t just to store money; it’s to give you flexibility. Whether you are reinvesting in a new startup, buying real estate, or funding your lifestyle in Cyprus, the structure allows for:
Stop losing 30% of your growth to outdated structures. [Book a Strategic Consult] or [Begin your Holding Setup Online].
Combine with the IP Box regime to reduce corporate tax on royalties and software sales down to 2.5%.
Hold international real estate assets under a stable, UK-based legal framework while optimizing rental income flows.
Consolidate family wealth, manage multi-generational inheritance, and reinvest profits globally without immediate tax friction.
The point is to centralize ownership, reduce the tax burden on cross-border profits, and provide a tax-neutral layer for reinvesting capital. It separates the “operating” risk from the “asset” ownership, protecting the founder’s wealth from local liabilities.
A holding company only pays the 12.5% corporate tax on “active” trading income. Passive income, such as dividends and gains from share sales, is generally exempt. If the company earns interest not related to its ordinary business, it may be subject to SDC tax, though exemptions apply for non-resident and non-dom structures.
The main benefit is the Parent-Subsidiary Directive, which allows for the tax-free movement of dividends between EU subsidiaries and the Cyprus parent. For Belgian or Dutch founders, it eliminates the “dividend tax leak” that occurs when moving money between high-tax countries.
Yes. A Cyprus company can hold assets and engage in active trade simultaneously. Both activities will be subject to the standard 15% Corporate Tax on net profits, with the 0% dividend/CGT exemptions still applying to those specific income streams.
An operating company sells products or services and has employees and day-to-day overhead. A holding company exists primarily to own other companies, intellectual property, or real estate. In Cyprus, a single company can technically do both, but for asset protection, it is better to separate them.
Dividend income is 100% exempt from corporate income tax. It is also exempt from the Special Defence Contribution (SDC) unless the subsidiary is engaging in more than 50% passive activities AND the foreign tax burden is significantly lower than the Cyprus rate (typically less than 6.25%). These conditions are easily met by most active businesses.
Generally, there is no minimum holding period or percentage required for the corporate tax exemption on dividends received from abroad, provided the paying company is not a “low-tax” shell.
Structure setup
Starting price
€1,200 all-in • 100% Online • Legal Backing
