French Consultant Reduces Tax Burden to 12.5% via Cyprus Management Company

A French independent consultant generating significant consulting income faced France's 25% corporate income tax rate and substantial social security contributions on consulting fees, resulting in an effective tax burden exceeding 50% on gross income. His adviser had suggested exploring an offshore structure, but the consultant was concerned about compliance risks and reputational exposure. He needed a transparent, fully compliant EU-based solution.

Nexora structured a Cyprus management company to receive consulting fees for services rendered outside France. The structure was designed to comply with both Cyprus tax law and the France-Cyprus double tax treaty, ensuring that profits genuinely attributable to Cypriot management activities were subject to Cyprus CIT at 12.5%. Nexora coordinated with a French tax adviser to assess the impact on the consultant's French residency obligations and personal tax position.

Consulting income attributable to work performed through the Cyprus management company became subject to Cyprus CIT at 12.5% rather than French CIT at 25%, representing a halving of the corporate tax burden on qualifying income. French social charges on this portion of income were eliminated. The consultant subsequently relocated to Cyprus on a permanent basis under the Non-Dom regime, achieving a further reduction in personal tax exposure through the 50% personal income tax exemption on employment income under the Cyprus expatriate rule.