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Groups investing outside Cyprus may flow-through income
streams, which will generally be tax exempt in Cyprus and not attract
withholding tax as they leave; |
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Subsidiaries that have scope for significant capital appreciation
may be held in Cyprus and sold without any liability to tax on the
gain; |
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Assets (including, in certain circumstances, foreign real estate)
that have scope for significant capital appreciation may be placed
in a Cypriot corporate wrapper and sold without any liability to tax
on the gain; |
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Cyprus’s double tax treaty network and the EU
Parent/Subsidiary Directive offer a number of other tax planning
opportunities; |
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Cyprus offers a favourable exit strategy under Cyprus law which allows
payment of dividend, interest and royalties without payment of withholding
tax; |
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Cyprus can also be used as the location for the ultimate holding
company, for instance in a group that is relocating to a new jurisdiction
or on formation of a new publicly traded corporation with international
operations; |
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It is particularly suitable for any fund or investment vehicle since there is no tax on transactions in securities as defined, even if this is the entity’s main trading activity. It has recently enacted legislation to implement the European Council SE Regulation, and has already implemented the EU Mergers Directive, allowing companies from other member states to re-form in Cyprus without any tax cost. |
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