The Challenge
The founder had built a B2B SaaS product over five years and reached £2.3M ARR. At the UK's 25% corporate tax rate, his company was paying over £300k per year in corporation tax on profits almost entirely derived from proprietary software. The cost of doing business in the UK was becoming unsustainable, and his CFO flagged that a tax restructuring exercise was overdue before a potential exit.
The Solution
Nexora structured a Cyprus operating company to own the qualifying IP under the Cyprus IP Box regime, which taxes qualifying IP income at an effective rate of approximately 3.7% (2.5% / 80% nexus fraction). A transitional IP transfer agreement was prepared in compliance with OECD transfer pricing guidelines, and the founder relocated to Cyprus to establish tax residency under the Non-Dom scheme.
The Outcome
The restructuring reduced the effective tax rate on IP profits from 25% to approximately 3.7%, representing annual tax savings of over €250,000 at current profit levels. The founder also qualified for Cyprus Non-Dom status, meaning any future dividend distributions from the Cyprus company are entirely exempt from Special Defence Contribution. With a planned exit within three years, the projected total saving over the holding period exceeds €1.2M.
“The combination of the IP Box and Non-Dom status completely changed the economics of our exit. Nexora explained the structure clearly, managed the whole process remotely, and everything was done in under six weeks.”
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