Cyprus IP migration · 3% effective · OECD nexus
Cyprus IP Box (Article 9(1)(l) ITL 118(I)/2002) exempts 80% of qualifying intangible-asset profit. At 15% CIT, that's ~3% effective on the qualifying slice. Combined with OECD-compliant Modified Nexus Approach + transfer-pricing-supported royalty + post-2026 stamp-duty repeal, Cyprus IP HoldCo is the EU's structurally cleanest IP base.
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— WHAT YOU GET
Cyprus IP Box covers copyrighted software (SaaS / platforms / game engines / ML models), patented inventions, qualifying utility models, plant variety rights. Marketing intangibles (trademarks, brand) explicitly EXCLUDED. Original copyrighted software (with R&D ledger + protection evidence): typically qualifies.
Moving IP from UK / US / DE / FR / IL parent triggers source-country exit-charge analysis. UK: deemed disposal at market value under TCGA 1992 + Part 8 CTA 2009. US: §367 / §954 transfer pricing. DE: §6 AStG hidden-reserve realisation. We coordinate with source-jurisdiction tax advisers on the entire migration.
Arm's-length royalty rate from Cyprus IP HoldCo to operating subsidiaries. CUT / DCF / Relief-from-Royalty methodologies. ICPAC-audit-firm signoff. Optional ATR (Advance Tax Ruling) for binding Cyprus Tax Department pre-clearance on the royalty rate.
OECD Modified Nexus Approach requires Cyprus-resident R&D activity to support the IP Box deduction. Cyprus office, Cyprus-resident engineering team, contemporaneous R&D ledger. Pure 'letterbox' IP HoldCos fail nexus. We build the substance baseline alongside the IP transfer.
— EVERYTHING INCLUDED
— PROCESS
Identify qualifying IP, source-country exit-tax exposure, target Cyprus IP Box effective rate, R&D footprint requirements for OECD nexus. Quantify migration economics + ongoing tax savings.
Cyprus Ltd Business tier (10 working days), Cyprus-resident director, Cyprus office, first Cyprus-resident R&D hire. Initial board meeting authorising IP acquisition.
Transfer-pricing study (CUT / DCF / Relief-from-Royalty). Source-country counsel handles their side: exit-charge calculation, settlement, deed of assignment. IP assigned to Cyprus IP HoldCo at TP-supported value.
Legal opinion on qualifying-IP characterisation. Nexus methodology document. Expense-attribution model. Optional ATR (€4,000-€5,500 + VAT pro fee + €1,000/€2,000 gov fee). Operational from Day 90.
We deliver written IP Box methodology + transfer-pricing-compliant royalty structure + OECD-nexus-compliant Cyprus R&D footprint. If a successful Cyprus Tax Department challenge invalidates the methodology purely because of our own error, we redo the work at no cost.
— COMMON QUESTIONS
Yes for qualifying SaaS / software / patented inventions with strong nexus (in-house Cyprus R&D + unrelated-third-party contractors). Cyprus IP Box: 80% exemption on qualifying profit at 15% CIT = ~3% effective. Some structures achieve 2.5-2.8% with optimal nexus + expense attribution.
Pre-Series A or low-revenue stage — IP valuation is lowest, source-country exit-charge minimised. Post-Series-A / post-PMF moves workable but materially larger exit-tax bite. Best timing: as part of EU-structure-establishment before scaling.
UK: deemed disposal at market value (UK CGT). US: §367 hidden-reserve realisation. DE: §6 AStG. FR: Article 167 bis. IT: Article 166 TUIR. Each jurisdiction-specific. We coordinate with source-country tax advisers. For EU/EEA destinations (Cyprus is EU), ATAD I deferral typically applies.
OECD Modified Nexus Approach incentivises Cyprus-resident R&D. Practical target: ≥70% Cyprus-resident engineering headcount for nexus near 1.0. Full team migration not always needed — a Cyprus-resident technical lead + remote contractor support is workable.
Yes — but US §367 outbound transfer rules + §954 CFC rules create friction. Some IP types are favoured (manufacturing intangibles); software IP transfers are scrutinised. Coordinate with US tax counsel on the cost. Cyprus-side: ~3% effective on the migrated IP.
Joint-IP arrangements require careful nexus + transfer-pricing analysis per co-owner. Cyprus IP Box deduction applies to the Cyprus-attributable slice. Joint ownership workable but less optimal than full transfer to Cyprus.
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