Treaty Companies

Substance Requirements

A Dutch treaty company must demonstrate genuine economic substance including at least half of the board resident in the Netherlands, decision making occurring in the Netherlands, and adequate staff and office facilities.

Entity Types

The most common structures are the Besloten Vennootschap (BV, a private limited company) and the Naamloze Vennootschap (NV, a public limited company). The BV requires a minimum share capital of EUR 0.01.

Principal Purpose Test

Following OECD BEPS guidance, treaty benefits are denied where the principal purpose of an arrangement is to obtain those benefits. Genuine commercial activity and economic substance must be demonstrated.

Tax Framework

Corporate income tax applies at a rate of 15% on the first EUR 200,000 of profits and 25.8% thereafter. The participation exemption fully shields qualifying dividend and capital gain income from corporate tax.

Participation Exemption

Dividends and capital gains from qualifying participations (at least 10% ownership or EUR 1.2 million acquisition cost, held for at least 12 months) are fully exempt from Luxembourg corporate and municipal business tax.

Minimum Capital

The SA requires minimum share capital of EUR 30,000 fully paid up. The Sarl requires a minimum of EUR 12,000. Both allow multiple share classes to facilitate flexible ownership and profit distribution structures.

Substance and Governance

Genuine substance is required for treaty access, including Luxembourg resident directors, board meetings held in Luxembourg, and decision making exercised within the jurisdiction.

Tax Rate

The combined corporate income tax and solidarity surcharge rate is approximately 17% to 18%, with no withholding tax on outbound dividends to qualifying treaty partners under many arrangements.

Corporate Tax Rate

Trading income is taxed at 12.5%, one of the lowest rates in the EU. Passive income including dividends and interest earned outside trading is taxed at 25%.

Holding Company Exemptions

Ireland's participation exemption covers dividends from EU and tax treaty resident subsidiaries. The capital gains exemption applies to disposals of qualifying substantial shareholdings held for at least 12 months.

IP Holding Box

The Knowledge Development Box allows a 6.25% effective tax rate on income derived from patents, copyrighted software, and other qualifying intellectual property assets that were developed in Ireland.

Substance Requirements

Treaty residence requires that the company's central management and control is exercised in Ireland. Directors should be Irish resident, and board decisions should be made within the jurisdiction.

Cantonal Tax Rates

Combined federal, cantonal, and municipal tax rates vary from approximately 11.8% in Zug to 19% in Zurich, with the canton of incorporation being a key planning consideration for effective tax rate management.

Participation Exemption

A participation deduction reduces Swiss tax on dividends and capital gains from qualifying shareholdings of at least 10% or CHF 1 million in value, effectively providing near full relief on such income.

Entity Types

The Gesellschaft mit beschrankter Haftung (GmbH) and the Aktiengesellschaft (AG) are the most commonly used structures. The AG requires minimum share capital of CHF 100,000 and the GmbH requires CHF 20,000.

Substance Requirements

Swiss treaty residence requires a majority of directors to be Swiss resident, all significant decisions to be made in Switzerland, and adequate physical presence including office space and operational staff.

Dividend Exemption

Dividends received from overseas subsidiaries are generally fully exempt from corporation tax in Cyprus provided the paying company is not primarily engaged in investment activities and is not liable to tax at less than 6.25% in its home jurisdiction.

Capital Gains Exemption

Profits on disposal of shares and other securities are fully exempt from corporation tax in Cyprus, with no capital gains tax applying except where the underlying asset includes immovable property located in Cyprus.

Notional Interest Deduction

Cyprus allows a notional interest deduction on new equity contributed to the company, calculated at a reference interest rate plus a 3% margin, further reducing the effective tax rate on equity funded structures.

Substance and Residency

Central management and control must be in Cyprus. A majority of directors should be Cyprus resident, and board meetings should be held and minuted in Cyprus to qualify as tax resident.

Shareholder Refund Mechanism

Non-resident shareholders of a Maltese company are entitled to claim a refund of six sevenths of the tax paid on trading income, reducing the effective tax to approximately 5% of the pre-tax profit.

Participation Exemption

Malta's participation exemption applies to dividends and capital gains from qualifying shareholdings of at least 5% held for at least 183 days, provided the subsidiary is resident in a treaty country or pays tax at a rate of at least 15%.

No Withholding Tax

Malta does not levy withholding tax on dividends, interest, or royalties paid to non-resident shareholders or lenders, making it efficient for upstreaming profits to ultimate holding entities.

Formation Requirements

A private limited liability company (Ltd) in Malta requires a minimum of EUR 1,165 in share capital, at least one director and one shareholder, and a registered office in Malta.

Corporate Tax Rate

Singapore's headline corporate tax rate is 17%, with an effective rate significantly lower for many companies due to the partial tax exemption on the first SGD 200,000 of chargeable income.

Foreign Sourced Income Exemption

Dividends, branch profits, and service income from foreign sources are exempt from Singapore tax when remitted to Singapore provided the foreign jurisdiction's headline tax rate is at least 15% and the income was subject to tax in that jurisdiction.

Substance Requirements

Singapore treaty residence requires the company to be incorporated in Singapore or have its management and control exercised in Singapore. In practice, a majority of directors should be Singapore resident and board decisions made in Singapore.

Formation Requirements

A Singapore private limited company (Pte Ltd) requires at least one director who is a Singapore resident, a company secretary, a registered office, and minimum paid up capital of SGD 1.

Profits Tax Rate

Hong Kong profits tax is 8.25% on the first HKD 2 million of assessable profits and 16.5% on the remainder, applicable only to profits arising in or derived from Hong Kong. Offshore profits are exempt.

China Access via CEPA

Hong Kong companies holding qualifying subsidiaries in China can access reduced withholding tax rates of 5% (instead of the standard 10%) on dividends from Chinese subsidiaries under the China-Hong Kong comprehensive arrangement.

No Withholding Taxes

Hong Kong imposes no withholding tax on dividends paid to non-residents, no withholding on interest, and no withholding on royalties paid offshore, making outbound cash flows fully flexible.

Formation Requirements

A Hong Kong private limited company requires at least one director (any nationality), one shareholder, a company secretary who is Hong Kong resident, and a registered office address in Hong Kong.

Tax Rate

The standard corporate tax rate in Mauritius is 15%. However, a GBC can benefit from a foreign tax credit of up to 80% of Mauritius tax on foreign source income, reducing the effective tax rate to as low as 3%.

African Treaty Access

Mauritius treaties with African countries including Kenya, Rwanda, Uganda, Zimbabwe, Mozambique, and Madagascar provide significantly reduced withholding tax rates, making Mauritius the leading holding platform for Africa investments.

GBC Substance Requirements

A GBC must maintain at least two Mauritius resident directors, hold board meetings in Mauritius, maintain its principal bank account in Mauritius, maintain its accounting records in Mauritius, and meet the FSC's enhanced substance test.

Regulatory Oversight

The FSC regulates all GBCs. Annual renewal of the GBC licence, annual financial statements, and compliance with the AML/CFT framework are mandatory. Neptune Fiduciaries Group manages all FSC compliance obligations on behalf of clients.

Corporate Tax Rate

A 9% corporate tax rate applies to taxable income above AED 375,000. Qualifying free zone entities maintaining the Qualifying Free Zone Person conditions are taxed at 0% on qualifying income and 9% on non-qualifying income.

Extensive Treaty Network

With over 130 treaties in force, the UAE provides reduced withholding tax access into jurisdictions across Africa, Asia, Europe, and the Americas, making it increasingly competitive with traditional treaty hubs.

No Withholding Taxes

The UAE imposes no withholding tax on dividends, interest, or royalties paid to non-residents. The participation exemption applies to dividends and capital gains from qualifying foreign shareholdings of at least 5% held for at least 12 months.

Substance Requirements

The UAE's Economic Substance Regulations require entities undertaking relevant activities (holding, finance, IP, headquarter activities) to demonstrate adequate physical presence, qualified employees, and decision making in the UAE.