Finance Company

Finance company

Taxation in Cyprus:

  • The investor will lend money to the Cyprus Company 1. No withholding tax on the interest payment to the Investor
  • Cyprus Company 1 will use the funds of the loan to proceed to capital contribution to Cyprus Company 2. Minimal Capital Duty
  • Subsequently Cyprus Company 2 will lend money to the foreign entity
  • The interest income of Cyprus Company 2 will be set off with the interest expense of Cyprus Company 2 using group loss relief. Only the margin will be left to be taxed
  • The interest expense of Cyprus Company 1 will be tax allowable provided the shareholdings of the subsidiaries are 100%
  • No withholding tax on dividend distribution to Cyprus Company 1