Trading Company Structures
Companies trading in securities
Any profits from the disposal of securities, irrespective of whether the profits arise from the company’s trading activities or are of a capital nature, are exempt from tax in Cyprus. Hence, security trading companies can structure their operations via Cyprus and achieve nil taxation and at the same time enjoy EU identity and regulations. In accordance with the tax legislation “Securities” are defined as shares, debentures, Government Bonds, founder’s shares or other shares of companies or other legal entities which have been incorporated in Cyprus or abroad and any kind of options thereon.
Companies trading in goods and services
Cyprus companies can be used efficiently in trading activities either in the form of purchasing and selling goods or receiving and providing services. Any profit realised by the Cypriot company would be taxable at the rate of 12.5% with no further corporate tax implications. In addition, the profits accumulated in the Cypriot company can be expatriated to the holding company with no withholding taxes irrespective of the country of residence of the recipient or the existence of a double tax treaty. The Cypriot company conducting the trading activities would be able to obtain a VAT registration number but the physical delivery of the goods in Cyprus is not a requirement.
