Cyprus founder buyout · MBO / LBO · 0% exit
Founders + management teams executing MBOs (Management Buy-Outs) or LBOs (Leveraged Buy-Outs) via Cyprus HoldCo benefit from: 0% Article 9(1)(g) titles exemption on subsequent exit, NID (Notional Interest Deduction) on equity tranche, Section 11(7) framework on debt-side interest, and post-2026 stamp-duty repeal.
Free 30-min consultation. Reply within 24h.
— WHAT YOU GET
Cyprus Ltd Business tier (€3,699 + VAT) as MBO / LBO acquisition vehicle. Common-law-aligned Companies Law Cap. 113 + EU member-state status + Cyprus Bar / ICPAC-led documentation. Lender + investor familiarity with Cyprus structures.
Cyprus NID (Article 9B ITL): notional-interest deduction on new equity at 10-yr bond + 5% premium (~8-9% currently). For €40M equity tranche: ~€3.2-3.6M annual NID deduction → ~€480-540k annual CIT saving (at 15%). 80% taxable-profit cap.
Section 11(7) ITL — interest deductible if wholly + exclusively for production of taxable income. Article 11A thin-cap rule applies (30% EBITDA cap / €3M de minimis). Group-ratio override for larger leveraged structures.
Subsequent exit via M&A or IPO: 0% Article 9(1)(g) titles exemption on share sale. Post-2026 stamp-duty repeal (Law 239(I)/2025): €0 transaction friction. Clean structural outcome end-to-end.
— EVERYTHING INCLUDED
— PROCESS
Define buy-out scope (full MBO vs partial founder secondary), valuation methodology, financing structure (equity vs senior debt vs mezzanine), governance post-acquisition. Coordinate with lender + investor counsel.
Cyprus Ltd Business tier formation. Equity tranche (founder / investor / mezzanine), bank debt facility (UK / Cyprus / EU bank). Cyprus Bar advocate-led SPA + facility documentation. Optional ATR on tax-neutrality of structure.
Cyprus HoldCo acquires target shares. Cyprus Bar-led completion mechanics: SPA execution, regulatory clearances (CySEC / Competition where applicable), share-transfer HE57 filing, UBO Register update.
Cyprus HoldCo operational substance + governance. Annual NID claim + IR4 corporate return. Interest deductibility monitored against Article 11A cap. Periodic structure review for any subsequent secondary / exit events.
We deliver Cyprus HoldCo MBO / LBO structures that satisfy senior lender + sponsor + Cyprus Tax Department review. If a successful Tax Department challenge invalidates the structure purely because of our own error, we redo the work at no cost.
— COMMON QUESTIONS
Yes — major EU + UK + US senior lenders routinely accept Cyprus HoldCo as acquisition vehicle. Common-law-aligned Companies Law + EU regulatory framework + Cyprus Bar-led documentation. Standard market structure.
Section 11(7) ITL framework: interest deductible if wholly + exclusively for taxable-income production. Acquisition of participation-exempt subsidiary: anti-abuse review (see /articles/cyprus-holding-company-interest-deductibility-2026). Mixed-funding (equity + NID + modest debt) is the optimised structure.
NID (Article 9B ITL) provides notional-interest deduction on new equity. For €40M equity tranche: ~€3.2-3.6M annual NID at ~8-9% rate. Substantial CIT saving (~€480-540k/yr). 80% taxable-profit cap; stacks with IP Box where applicable.
30% EBITDA cap on net deductible interest (or €3M de minimis, whichever higher). Cyprus HoldCo with high interest spend + low EBITDA: thin-cap restriction may apply. Group-ratio override available where group ratio >30%. See /articles/cyprus-thin-capitalization-rules-2026.
Positively. Stamp duty abolished (Law 239(I)/2025) — €0 stamp duty on SPA + share-transfer documents. 20% R&D super-deduction (where applicable). 7-year loss carry-forward (raised from 5). All favorable for buy-out structures.
Cyprus founder / investor share-sale at subsequent secondary or exit: 0% Article 9(1)(g) titles exemption. Substantial founder-side outcome. See /articles/cyprus-secondary-share-sales-founder-liquidity-2026.
Reply within 24 hours from a senior adviser. No obligation, no upfront fee.