A holding structure via Cyprus can bundle shareholdings tax-efficiently – thanks to the participation exemption, a broad tax-treaty network and EU law.
Cyprus is one of the most popular holding locations in the EU. A Cyprus holding holds shares in subsidiaries and bundles their income. This is attractive for several reasons: dividends from holdings are tax-exempt under certain conditions, gains from selling shares (with securities character) are generally tax-free, and Cyprus has a broad network of double taxation treaties.
Combined with the owner's non-dom status, a very efficient overall structure can be built – provided the holding has genuine substance and is actually managed from Cyprus.
Dividends from subsidiaries tax-free under conditions.
Sale of shares with securities character generally without tax.
A broad treaty network reduces withholding taxes internationally.
As with any Cyprus structure: without genuine economic substance there is a risk of recognition problems and German CFC taxation. A holding therefore needs to be planned, staffed and documented cleanly.
Note: not tax or legal advice. A tax saving requires a properly set up structure with genuine economic substance. Figures as of 2026.
Mainly if you hold several shareholdings, want to bundle international income or prepare a later sale tax-efficiently.
For the full effect (esp. non-dom on distributions) yes. The holding itself must also have genuine substance in Cyprus.
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