Evaluating Holding Structure Setups: A Comparative Overview by Zitadelle AG

When planning an international holding structure, selecting the right jurisdiction is critical to optimize tax efficiency, compliance requirements, and operational costs. At Zitadelle AG, we specialize in advising clients on setting up holding companies in strategic jurisdictions to align with their business objectives. Below is a comparative evaluation of popular holding jurisdictions including BVI, Isle of Man, Guernsey, Gibraltar, Mauritius, Labuan (Malaysia), Cyprus, and Dubai DMCC.

Corporate Income Tax

• BVI, Isle of Man, Guernsey, Gibraltar, Labuan, Dubai DMCC: These jurisdictions offer 0% corporate income tax, making them highly attractive for holding companies.

• Mauritius: Standard corporate tax rate is 15%, which can be reduced to 3% under the Corporate and Investment Governance Act (CIGA) through partial exemption.

• Cyprus: Has a corporate tax rate of 12.5%, one of the lowest in the EU, with favorable tax treaties and exemptions available for holding companies.

Tax on Dividends and Interest Income

• Dividend Income:

  • All jurisdictions impose 0% tax on dividend income received by holding companies, with Mauritius and Labuan requiring economic substance compliance for tax benefits.

  • Cyprus also provides 0% tax on dividends received by holding companies, subject to certain conditions, including substance requirements and anti-avoidance rules.

• Interest Income:

  • BVI, Isle of Man, Guernsey, Labuan, Dubai DMCC, and Cyprus generally apply 0% tax on interest income.

  • Gibraltar applies 12.5%.

  • Mauritius taxes international interest income at 15%, with local interest generally not taxed.

Withholding Tax on Dividends and Interest

• No Withholding Tax:

  • BVI, Isle of Man, Guernsey, Gibraltar, Mauritius, Labuan, Cyprus, and Dubai DMCC typically do not impose withholding tax on dividends and interest paid by holding companies.

  • However, repatriation of dividends to shareholders’ home countries may be subject to tax based on local laws and applicable tax treaties.

Capital Gains Tax

• Capital Gains on Disposal of Shares:

  • BVI, Isle of Man, Guernsey, Gibraltar, Cyprus, and Labuan do not impose capital gains tax on disposal of shares in holding or subsidiary companies.

  • Mauritius maintains tax neutrality on capital gains.

  • Dubai DMCC does not impose capital gains tax.

Economic Substance and Compliance Requirements

• Economic Substance:

  • BVI, Isle of Man, Guernsey require compliance with corporate law plus maintaining adequate employees and premises—relatively low thresholds.

  • Mauritius, Labuan, and Cyprus require economic substance or compliance with local substance rules to benefit from preferential tax regimes and avoid blacklisting.

  • Dubai DMCC mandates compliance with the UAE Economic Substance Regulations, including local management and physical presence requirements.

  • Gibraltar does not currently enforce economic substance for holding companies.

• Ultimate Beneficial Ownership (UBO) Disclosure:

  • Most jurisdictions record UBO information confidentially. Gibraltar and Cyprus maintain public or semi-public UBO registers per local transparency laws. Dubai DMCC collects UBO information but it is not publicly available.

Financial Reporting and Audit

• Financial Statements:

  • BVI and Isle of Man require financial statements but generally do not require audits.

  • Guernsey, Gibraltar, Mauritius, Labuan, Cyprus, and Dubai DMCC require audited financial statements annually.

  • Mauritius requires filing audited financials with the FSC within six months of the balance sheet date.

European Union (EU) Membership

• Cyprus: The only EU member among these jurisdictions, offering access to EU tax directives and treaties, making it a strategic hub for holding companies targeting Europe.

• The other jurisdictions (BVI, Isle of Man, Guernsey, Gibraltar, Mauritius, Labuan, Dubai DMCC) are not part of the EU.

Why Choose Zitadelle AG for Your Holding Structure?

Selecting the ideal holding jurisdiction involves balancing tax efficiency, compliance burden, operational costs, and strategic fit for your business model. Zitadelle AG’s experienced consultants provide bespoke advisory services tailored to your goals. Whether you prioritize low tax rates, economic substance flexibility, EU market access, or reporting transparency, we guide you through the regulatory landscape of these key jurisdictions.

Contact Zitadelle AG today to discuss your holding structure needs and benefit from expert insights into BVI, Isle of Man, Guernsey, Gibraltar, Mauritius, Labuan, Cyprus, and Dubai DMCC jurisdictions.