Category: Uncategorized

Family businesses, like all enterprises, must navigate ongoing challenges as part of their natural evolution. While change is an inevitable part of business life, one issue that often proves difficult for families to address is generational change and succession planning.

A recurring challenge is that successive generations may not have the aptitude for, or interest in, running the family business. Left unaddressed, this can lead to an erosion of wealth and reinforces the long-standing adage of “rags to rags in three generations”.

Why then, do some families succeed in intergenerational planning while another family may not? This is a question Dixcart Guernsey works closely with families to address by examining the frameworks and structures that are built to support long-term stability and stewardship.

Family Governance

Family governance is critical to successful succession planning. Dixcart Guernsey work closely with families, and in some cases, their advisers, to create and record a governance process that works effectively for the family. Governance ultimately determines how, when and by whom decisions are made, and clear, transparent decision making reduces the risk of family disputes, which in turn preserves wealth across generations.

Educating Family Members

Establishing shared values and clear behavioural expectations enables family members to express differing views without damaging relationships or business continuity.

Agreeing dispute-resolution mechanisms from the outset can also further safeguard families. Where certain family members have specific skills or interests, responsibilities such as investment oversight or business involvement can be aligned accordingly, to strengthen overall decision-making. In addition, aged or vulnerable family members should also be taken into consideration as part of this process to ensure appropriate protections are in place.

Involve the Younger Generations Early

Engaging the next generation at an early stage promotes transparency around family wealth and how it is to be managed. Learning about decision making on complex wealth issues and exposing younger members over time is a great way to see and evaluate the effects of those decisions coming to fruition and for them to understand long-term impact of strategic choices.

Where family structures include trusts, early interaction with trustees helps build trust and understanding between the family and the professional fiduciaries.

Using Appropriate Structures

In a world of increasing global mobility and tax transparency, wealth structures are rarely permanent. Individual arrangements might evolve but these structures can become outdated if not carefully managed. However, their core benefits and underlying purpose remains enduring and succession planning, investment management, and the protection of vulnerable individuals continue to justify the use of such well-considered structures.

Trusts and Companies

Trusts and companies remain central to long-term wealth planning. At Dixcart Guernsey, we regularly see assets such as real estate, investment portfolios, art collections, and other assets held within company structures owned by trusts. This approach provides asset segregation and helps derisk the performance of the trust assets.

Foundations

Foundations are particularly suited to individuals from civil law jurisdictions where the concept of foundations is familiar. they provide the family with a degree of control, as both the council members and the enforcers which govern the foundation, can include family members or close trusted advisers.

Private Trust Companies (PTCs)

PTCs operate in a similar way to foundations and allow  family members and advisers to sit on the board of the company that runs the underlying trust and company structures. They are often regarded as the premium governance solution for families who wish to have enhanced control.

Private Investment Funds (PIFs)

Using a fund vehicle for asset management purposes is becoming increasingly popular for families. They typically follow a corporate structure, which is easy to understand and govern, but have the advantage of being created for the sole purpose of running a family’s assets. As such, they are not regulated in the same way a commercial fund might be which is open to third party investors.

However, should the opportunities present themselves with other families or family offices wishing to also invest, the foundations of fund corporate governance will already be in place and track record generated which aids in making the step up to a fully regulated fund vehicle easier, which many have successfully done.

Addressing Potential Gaps

Gaps can arise in a family structure where trustee or director roles are required. These roles can be fulfilled by experienced professionals and help families with their continuity. Dixcart Guernsey offers a full suite of fiduciary services and are happy to discuss family requirements and succession planning as they arise.

Get in Touch

At Dixcart Guernsey, we combine long‑standing local experience with international insight to support families and businesses with effective structuring and governance when succession planning.

If you or your clients would benefit from tailored guidance on Guernsey trusts, foundations, PTCs, or wider fiduciary services, please contact our team at advice.guernsey@dixcart.com.

­The Isle of Man presents three options for those wishing to establish a simplified structure as an alternative to a Private Limited Company; which can be overly complex and/or onerous depending on the activity, scale and purpose of the undertaking.

Below, we have examined two of the most commonly used structures to provide a brief introduction.

Limited Partnership

Limited Partnerships are a more formalised trading structure than General Partnerships, providing limited liability to Limited Partners who give up a degree of management and control. Features include:

• Governed by the Partnership Act 1909
• 2 – 20 Partners – ­ere must be a minimum of one General Partner (can be a corporate entity) and one Limited Partner (exemptions apply on the total number of partners, depending on the nature of activity)
• At least one Partner must be an Isle of Man resident
• Must register with the Isle of Man Companies Registry
• Limited Partnerships can elect to have separate legal personality under the Limited Partnership Act 2011
• The Limited Partner’s liability is fixed at outset and restricted to the capital or property contributed
• The Limited Partner cannot participate in the day-to-day management of the Limited Partnership – If in default, the Limited Partner will be considered a General Partner
• The General Partner has unlimited liability and is engaged in the day-to day management
• Annual declaration required
• Gains are realised on the Partner’s personal rates of taxation (e.g. income tax, Inheritance Tax etc.)

Limited Liability Company

Limited Liability Companies (LLCs) are a more modern and formalised structure, and are comparable to a Limited Liability Partnership. ­is hybrid entity combines some of the features of a Limited Company with the flexibility of a Partnership. Features include:

• Governed by the Limited Liability Companies Act 1996
• There must be two or more members, and there is no limit to the number of members
• Members’ liability is limited to the capital or property contributed
• The management powers vested in a member is proportionate to their contributions
• Members share profits in proportion to their contributions
• The LLC has Separate legal personality, therefore can enter into contracts, sue and be sued in its own right
• A LLC’s Constitutional documents include the Articles of Organisation (publicly available) and Operating Agreement (private)
• No requirement for Directors, or separation between management and ownership.
• Certificate of Organisation issued on registration
• Isle of Man Registered Office and Registered Agent required
• Annual Return required
• Accounting records must be maintained
• No requirement for annual meetings
• Gains are realised on the Partner’s personal rates of taxation (e.g. income tax, Inheritance Tax etc.)

Common Uses for a Limited Partnership

Apart from flexibility, many of the benefits of Limited Partnerships relate to the structure’s separation between management and ownership. ­is gives the entity the ability to raise capital without giving up control. Uses of this feature include:

• Investments, such as Hedge Funds, Exempt Funds or even direct trading into securities and other assets
• Commercial and residential property
• Luxury/depreciating assets
• Provides operational and tax transparency – paying personal rates of taxation rather than corporate rates

Common Uses for a Limited Liability Company

LLCs benefit from the same simplified requirements as Partnerships whilst also gaining the limited liability of a Limited Company without giving up control. Uses of these features include:

• Asset protection
• Start-ups and new ventures, ring-fencing certain activities or pursuits
• Where the investors want to participate in the management of the venture
• Provides operational and tax transparency – paying personal rates of taxation rather than corporate rates

Working with Dixcart

At Dixcart, we have been providing Corporate Services and guidance for over 45 years; assisting clients with the effective structuring and efficient administration of Companies tailored to their individual objectives.

Our in-house experts and senior employees are professionally qualified, with a wealth of experience; this means we are well placed to support and take responsibility for different roles, including acting as General Partner, Limited Partner or Member and providing specialist consultancy services where appropriate. If required, our qualified professionals can also assist entities with any substance issues.

From pre-incorporation planning and advice to the day-to-day management of the Company and troubleshooting issues, we can support your goals at every stage.

Get in Touch

If you require further information regarding the establishment of an Isle of Man Limited Partnership or LLC, please feel free to get in touch with the team at Dixcart: advice.iom@dixcart.com.

Dixcart Management (IOM) Limited is licensed by the Isle of Man Financial Services Authority.

Switzerland continues to attract internationally mobile professionals, entrepreneurs, and investors, drawn by its political stability, strong legal framework, and favourable tax environment. Immigration to Switzerland, however, is highly regulated and closely linked to employment status, business activity, and tax residence. Early and coordinated structuring is essential to ensure compliance and long-term efficiency.

Residence and Work Permits

Foreign nationals wishing to live and/or work in Switzerland generally require a residence permit, often combined with a work permit. The applicable regime depends primarily on nationality.

• EU and EFTA nationals benefit from the Agreement on the Free Movement of Persons. While permits remain necessary, the application process is comparatively streamlined.
• Non-EU and non-EFTA nationals are subject to more restrictive admission criteria and annual quotas. Permits are typically granted only when there is demonstrated economic interest, and where the individual possesses recognised qualifications, senior expertise, or entrepreneurial value.

In most cases, permits are issued for a specific role, employer, and canton, making precise structuring from the outset particularly important for both compliance and continuity.

Employment, Immigration and Social Security

Swiss immigration rules are closely interlinked with employment law and social security obligations.

• Where an individual is employed through a Swiss company or a Swiss branch of a foreign company, the local entity assumes responsibility for payroll, tax withholding, and social security compliance. This structure is generally the most robust from both an immigration and compliance perspective.
• Where no Swiss entity exists, individuals may be treated as self-employed for Swiss purposes. This approach can complicate immigration status and social security coverage, and foreign employment contracts are generally not recognised for Swiss unemployment insurance.

Establishing a Swiss Presence

For entrepreneurs and international groups, establishing a Swiss company or branch can play a decisive role in supporting immigration objectives. Swiss authorities will assess whether the business demonstrates genuine economic substance, including adequate capitalisation, commercial activity, and local presence.

Once established, a Swiss entity may sponsor residence and work permits for directors or key employees, subject to cantonal approval and ongoing compliance.

Tax Residence and Ongoing Obligations

Individuals who become resident in Switzerland are generally taxed on their worldwide income and net wealth, subject to applicable double tax treaties. By contrast, capital gains and inheritance or gift taxation are often more favourable than in other jurisdictions. Tax rates and administrative practice vary by canton.

Swiss social security operates under a mandatory three-pillar system, and registration is required from the commencement of Swiss employment or self-employment.

Residence Permits and Alternative Tax Regimes

Swiss residence permits may be issued on a temporary basis or permanent basis, depending on nationality, length of stay, and integration criteria. Permit status can influence employment rights, mobility within Switzerland, and the applicable method of taxation.

In addition, certain cantons offer alternative tax regimes for individuals taking up residence without local employment. In these cases, taxation may be assessed on the basis of living expenses rather than actual income. Such arrangements are subject to detailed conditions and are not available in all cantons, making advance planning and professional advice essential.

Cantonal Differences and Planning

Immigration, tax rates, and administrative procedures vary significantly between cantons. Permit timelines, documentation requirements, and tax outcomes may differ depending on the chosen canton of residence and employment. Cantonal choice is therefore a strategic decision, not a purely administrative one.

Conclusion

Swiss immigration should never be approached in isolation. It intersects with employment structuring, company formation, tax residence, and social security planning. Coordinated legal and tax advice at an early stage helps ensure compliance, reduce risk, and support long-term personal and business objectives.

Get in Touch

At Dixcart Switzerland, we combine deep local knowledge with international expertise to provide discreet, precision-driven guidance on immigration, tax structuring, and corporate planning. If you or your clients are considering relocating to Switzerland, or require tailored advice on residence, work permits, or tax planning, please contact our team at advice.switzerland@dixcart.com.

For high-net-worth individuals (HNWIs) and family offices, the choice of jurisdiction is no longer purely a technical or tax-driven exercise. In a global environment shaped by increased regulatory scrutiny, transparency initiatives, and rising reputational considerations, the legal and governance framework underpinning wealth structures has become a central strategic factor.

Advisers must look beyond short-term efficiencies and prioritise jurisdictions that deliver long-term stability, credibility, and resilience. While headline advantages may appear attractive, sustainable success depends on jurisdictions that combine robust regulation, strong corporate governance and international respect.

The Isle of Man stands out in this regard. It offers a stable, well-regulated, and professionally governed environment that meets the expectations of sophisticated HNWIs, family offices, and their advisers. Its framework supports complex wealth planning, adheres to global standards, and remains resilient under external scrutiny.

In an increasingly complex and transparent world, the quality of a jurisdictional quality is no longer optional, it is essential. The Isle of Man exemplifies a principled, forward-thinking approach to regulation and governance, making it a compelling choice for advisers seeking durable, credible solutions for their clients.

A Respected and Proportionate Regulatory Framework

The Isle of Man is known for its robust yet pragmatic regulatory environment. Financial services are overseen by an independent regulator with a strong track record of effective supervision, enforcement, and international cooperation. Crucially, regulation in the Isle of Man is proportionate, upholding high standards without constraining legitimate private wealth planning or investment activity.

This careful balance is particularly appealing to family offices, offering both full compliance and the operational flexibility needed to manage complex wealth structures effectively.

Strong Corporate Governance Culture

Corporate governance is deeply embedded in the Isle of Man’s financial services ecosystem. Directors, Trustees, and Fiduciaries are subject to clear duties, fit-and-proper requirements, and ongoing oversight. This governance culture aligns closely with the expectations of sophisticated families, who increasingly demand institutional-grade standards for their private structures.

For advisers, this provides confidence that entities established on the island benefit from genuine substance, professional accountability, and a governance environment built for longevity.

Legal Certainty and Political Stability

As a self-governing Crown Dependency with its own legal system, the Isle of Man offers political stability, an independent judiciary, and a common-law framework familiar to international advisers. Property rights are well protected, legislation is consultative and predictable, and legal changes are implemented with a long-term prospective rather than short-term political expediency.

Internationally Cooperative and Well-Regarded

The Isle of Man is internationally recognised as a cooperative and transparent jurisdiction, consistently meeting global standards for tax transparency, AML/CFT, and regulatory cooperation. This ensures that structures established on the island are sustainable, defensible, and aligned with the expectations of an increasingly interconnected world.

This international standing is particularly valuable for families with global footprints, cross-border investments, and multi-jurisdictional beneficiaries.

Get in Touch

At Dixcart Isle of Man, we combine decades of experience with a forward-thinking approach to structuring solutions.  If you or your client would like further information on Isle of Man holding structures, please contact Paul Harvey at: advice.iom@dixcart.com to discuss how we can assist.

Dixcart Management (IOM) Limited is Licensed by the Isle of Man Financial Services Authority

Mr Mario Rossi is an Italian entrepreneur who has invested in several companies across Europe in different sectors. He owns 70% of a German manufacturing company, 60% of a Czech software company, and 80% of a Spanish distribution company. He has also invested €1.5 million in a listed multinational American corporation.

Mr Rossi is now seeking an effective way to centralise his investments and manage his profits more efficiently. He is seeking a tax-efficient solution that would also provide flexibility, in case of dividend distributions to the holding company and a potential future exit. The creation of a holding company would be an ideal solution to achieve these objectives. The next crucial decision will be selecting the jurisdiction in which the holding will be established.

Why Malta?

Following his initial research, Mr Rossi shortlisted a number of potential jurisdictions, including Malta. Malta quickly emerged as a compelling option: it is a member of both the European Union and the OECD, geographically close to Italy, and easily accessible via direct flights. Its economy has demonstrated consistent growth for over two decades and continues to rank among the strongest growth forecasts within the European Union.

Mr Rossi also noted that English is one of Malta’s official languages, allowing him to review legislation directly and communicate seamlessly with local professionals. In addition, Malta benefits from an extensive network of Double Tax Agreements, which can reduce or eliminate withholding taxes on dividends from non-EU subsidiaries and support future expansion or further investment beyond Europe.

The Participation Exemption Regime

After approaching the Dixcart office in Malta, Mr Rossi was provided by our advisers with a comprehensive overview of the Maltese tax system the compliance requirements for incorporating a company in Malta, and the practical operation of a Maltese holding company.

In particular, Mr Rossi expressed strong interest in the fiscal treatment for participating holdings and Malta’s participation exemption regime. Introduced in 2007, this regime allows for tax-free dividends and capital gains derived from qualifying participating holdings in subsidiary companies. 

The participation exemption is optional. A company may elect to declare the relevant income or gains and be taxed at the standard corporate rate of 35%, followed by an application for a full tax refund, or to claim the participation exemption. Where the exemption is applied, the relevant income or gains are not declared for tax purposes and are instead allocated to the Untaxed Account.

During his consultation with Dixcart, Mr Rossi learned that, for a Maltese holding company to qualify as a participating holding, certain conditions must be met. Specifically, at least one of the following criteria must be satisfied:

• The company directly holds at least 5% of the equity shares in a company not resident in Malta; or
• The company is an equity shareholder in a company not resident in Malta and is entitled, at its option, to call for and acquire the entire balance of the equity shares; or
• The company is an equity shareholder in a company not resident in Malta and is entitled to a right of first refusal in the event of a proposed disposal, redemption, or cancellation of all equity shares; or
• The company is an equity shareholder in a company not resident in Malta and is entitled to appoint a director to, or sit on the Board of that company; or
• The company is an equity shareholder that has invested at least €1,164,000 in a company not resident in Malta, with the investment held for an uninterrupted period of not less than 183 days; or
• The company is an equity shareholder in a company not resident in Malta, and the holding is not held as trading stock for the purpose of a trade.

In addition to meeting one of the above conditions, an anti-abuse test must also be satisfied in relation to the non-resident company. This requires at least one of the following applies:

• The non-resident company is resident in, or incorporated in, a Member State of the European Union; or
• The non-resident company is subject to foreign tax of a rate of at least 15%; or
• No more than 50% of the non-resident company’s income is derived from passive interest or royalties.

Mr Rossi’s Considerations

Mr Rossi’s investments meet the criteria outlined above, confirming that Malta is a highly suitable jurisdiction for his holding structure. His Malta holding company will be effectively tax-neutral, benefiting from the absence of withholding taxes and full eligibility under the participation exemption regime.

He is further reassured that, should he decide to sell any of his investments to a strategic buyer, the resulting capital gains would arise at the level of the Malta holding company and would be fully exempt from tax in Malta. This allows him to reinvest the profits in their entirety, without any tax leakage. The structure also provides flexibility and control over personal taxation, as dividends can be distributed selectively, according to his needs.

Setting up a Holding Company in Malta

Mr Rossi therefore entrusts Dixcart Malta to assist with the incorporation and ongoing management of his Maltese holding company. Dixcart provides a comprehensive end-to-end service including name reservation, company incorporation, drafting of the Memorandum and Articles of Association, directorship services, and day-to-day administration.

This service also covers the filing and submission of all necessary documents to ensure full compliance with local requirements, including maintaining accounting records, filing tax returns, and adhering to anti-money laundering regulations. 

Get in Touch

Planning your next business move requires a clear understanding of your options to make informed decisions. At Dixcart Malta, our team combines deep expertise in corporate structuring and taxation, with a hands-on, multidisciplinary approach, guiding clients through every step of the process.

For further information, please contact Jonathan Vassallo: advice.malta@dixcart.com.

Two Families with different lifestyles, One Destination

Mr Liao Wang is a successful Chinese businessman who lives in Beijing with his wife. At 55, family remains central to his life. Their two children study in Europe, one in Amsterdam and the other in Madrid, and the couple visits them every six to eight weeks. Since both children have finished school and have continued their studies abroad, the Wangs are considering a move of residence. For them, Malta is an attractive destination due to the direct flights to Europe and its warm Mediterranean climate.

James and Corinne Martin, originally from Canada, come from prominent families and have inherited substantial wealth, which they have invested in a well-diversified manner. After several years in the United Kingdom under the previous non-dom regime, they are now seeking a new, tax-efficient jurisdiction. For them, Malta’s climate and lifestyle are equally appealing. Both enjoy swimming and envision a home near the beach, where the sea is just a short stroll away.

What are the Residence Routes available to the Wang and Martin families?

Clarity on requirements, costs and benefits is essential when evaluating the Malta Permanent Residence Programme (MPRP) and the Malta Global Residence Programme (GRP). Each programme is designed to meet different priorities, and understanding these distinctions enables informed decisions.

Malta Permanent Residence Programme (MPRP)

The MPRP involves higher initial costs in the first year. The application process requires approximately €100,000, which includes administrative fees of €60,000, a contribution of €37,000 and a €2,000 donation to a local charity. An additional €7,500 applies for each adult dependant included in the application.

From the second year onwards, the main expense relates to property. The minimum annual rent is €14,000, while the minimum purchase price is €375,000.

Malta Global Residence Programme (GRP)

The GRP offers significantly lower initial costs, with an administrative fee of €6,000. However, an annual minimum tax of €15,000 is required to maintain eligibility, in addition to property costs. The minimum annual rent is €9,600, and the minimum purchase price is €275,000.

Benefits of Each Programme

The MPRP provides greater flexibility. It grants permanent residence, allows applicants to let or sublet their property when not in Malta and offers the option of obtaining a temporary residency card during the application stage.

The GRP focuses on tax efficiency. It confers a special tax status and is renewed annually, making it an attractive solution for individuals prioritising fiscal advantages.

The Decision of the Wang and Martin families

Mr Wang’s plans are long term. His children are likely to continue living abroad, and he is not seeking a special tax status in Malta. Given that both Mr Wang and his wife travel regularly to Europe for business, the ability to move freely within the Schengen area is an additional advantage. For these reasons, he chooses the Malta Permanent Residence Programme, which offers enduring security and flexibility.

James and Corinne Martin prioritise tax status at the centre of their decision. Having previously relocated to the United Kingdom for fiscal reasons, they now seek another jurisdiction that provides similar benefits. The Malta Global Residence Programme meets their objectives, offering a favourable tax position alongside visa-free travel within the Schengen area.

How Dixcart Can Assist?

Selecting the right programme requires clarity, confidence and understanding. Each option carries distinct requirements, costs and benefits. At Dixcart Malta, our team has extensive experience with these programmes and can guide clients on the route that best suits their needs and lifestyle. We can coordinate the application process on behalf of applicants and ensure a smooth transition to Malta.

For further information, please contact Jonathan Vassallo: advice.malta@dixcart.com.

Introduction

During 2025, the Cyprus Government undertook a comprehensive review of the country’s tax framework, with reforms approved on 22 December 2025 and effective from 1 January 2026. The changes aim to align Cyprus with international tax standards while preserving its long-standing competitiveness.

This article summarises the key elements of the reform most relevant to companies, investors, and individuals with Cyprus tax exposure. While the legislation includes additional measures, we have focused on those most likely to impact our client base.

Corporate Income Tax Rate

As expected, the Cyprus corporate income tax rate will increase from 12.5% to 15%. This change aligns Cyprus with the OECD’s Pillar Two minimum tax framework and reflects broader international developments, while still maintaining a competitive headline rate for businesses operating in Cyprus. Importantly, the reform does not affect the long-standing 0% tax treatment on dividend income, capital gains arising from the disposal of shares, or most interest income, which remains unchanged and continues to support Cyprus’ attractiveness as a holding and investment jurisdiction.

Dividend Taxation and Special Defence Contribution

A significant and welcome development is the abolition of deemed dividend distribution on profits generated from 1 January 2026 onwards. This long-standing requirement has often created administrative complexity for Cyprus companies.

In parallel, the Special Defence Contribution (SDC) on actual dividend distributions to ordinary tax residents will be reduced from 17% to 5%, and SDC on rental income will be removed entirely. These changes improve cash flow flexibility and simplify tax planning for both companies and shareholders.

Other Corporate Measures and Incentives

Several additional measures have been introduced to support business activity. The loss carry-forward period will be extended from five to seven years, providing greater flexibility in managing taxable profits. Allowable entertainment expenses will increase to €30,000, and the 120% super-deduction for qualifying research and development expenditure on intangible assets will be extended until 2030.

Certain types of income will also receive specific tax treatment. Cryptocurrency profits included in taxable income will be taxed at a flat 8% rate, while stock options granted under approved employer schemes will also be taxed at 8%. One-off gratuity payments will be taxed at 20%, and a tax-free amount of €200,000 will be allowed in cases where the gratuity payments were made upon termination of employment.

Changes Affecting Individuals

While the reform includes a wide range of measures, several changes will have a direct and tangible impact on individuals and households.

The tax-free income threshold will increase from €19,500 to €22,000, providing immediate relief for lower and middle-income earners. In addition, the personal income tax brackets are being adjusted to create a more progressive structure:

• Income from €22,001 to €32,000 will be taxed at 20%
• Income from €32,001 to €42,000 at 25%
• Income from €42,001 to €72,000 at 30%
• Income above €72,001 at 35%

Families with children will also benefit from enhanced tax relief (subject to annual family income thresholds).

The reform further introduces new deductions aimed at easing everyday living costs.

Strengthened Compliance and Anti-Evasion Measures

The reform introduces enhanced compliance obligations and expanded enforcement powers for the Cyprus Tax Department. From 2026, all individuals aged 25 and over will be required to submit an annual tax return, even if no taxable income is earned.

In addition, rental payments exceeding €500 must be made via bank transfer or electronic payment, effective on 1 July 2026. This measure is designed to improve transparency and reduce undeclared rental income.

Tax authorities will also be granted broader powers to request banking information, as well as asset and liability statements covering a six-year period. Taxpayers will be required to retain supporting documentation for the same duration. In cases of repeated non-compliance, inspectors may temporarily seal businesses or freeze company shares where tax debts exceed €100,000, subject to the taxpayer’s right to challenge such actions through the courts.

What This Means Going Forward

Overall, the reform simplifies several long-standing areas of concern for businesses. The removal of deemed dividend distribution, lower withholding tax on dividends, abolition of stamp duty, expanded capital gains tax exemptions, and more favourable treatment of share-based remuneration all contribute to a more streamlined and transparent tax environment.

While the increase in the corporate tax rate reflects international trends, Cyprus remains an attractive jurisdiction when viewed alongside its extensive double tax treaty network and stable regulatory framework.

Conclusion and Next Steps

The Cyprus tax reform represents a balanced shift towards greater transparency, enhanced compliance, and improved clarity for both companies and individuals. Early review and planning will be essential to ensure existing structures remain efficient and compliant under the new rules.

At Dixcart Cyprus, we support clients in navigating legislative changes, reviewing structures, and implementing practical solutions tailored to their specific circumstances. If you would like to discuss how the 2026 tax reforms may affect you or your business, our team would be pleased to assist: advice.cyprus@dixcart.com.

In Portugal, the rules for a company to deduct Value-Added Tax (VAT) on vehicle acquisitions are quite specific, mainly depending on the type of vehicle and its use. Understanding these regulations is crucial for businesses aiming to optimise their tax position.

The General Rule: No VAT Deduction for Passenger Cars

As a fundamental principle, the Portuguese VAT Code generally prohibits the deduction of VAT on the purchase, leasing, or use of passenger cars. This includes associated costs like maintenance, repairs, and fuel. This is the most important rule for businesses to remember.

Exceptions: When VAT Deduction is Possible

Fortunately, there are specific exceptions to this rule, primarily tied to the vehicle’s function within a company’s core business operations or to government incentives for greener transport.

Vehicles for Specific Business Activities

Full VAT deduction is permitted for vehicles that are the primary object of a company’s business activity. This applies to:

• Taxis and vehicles for public transport.
• Vehicles used by car rental companies (for example, rent-a-car).
• Vehicles that are part of a car dealer’s stock-in-trade.
• Vehicles used in other activities where income is directly generated from their operation, such as in driving schools or by tour operators.

Electric and Plug-in Hybrid Vehicles

Portugal provides significant tax incentives for electric and plug-in hybrid vehicles to encourage the adoption of greener transportation.

• Electric Vehicles (EVs): An 100% VAT deduction is possible on the acquisition of EVs, provided the cost (excluding VAT) does not exceed €62,500.
• Plug-in Hybrid Vehicles (PHEVs): A 100% VAT deduction is also possible, but the acquisition cost (excluding VAT) must not exceed €50,000.

For both EVs and PHEVs, the VAT on electricity for charging is fully deductible.

Other Important Considerations

Depreciation

Even if VAT is not deductible, the cost of the vehicle can generally be depreciated as a business expense, which helps to reduce corporate tax (IRC) liability. However, there are limits on the value that can be depreciated.

• For a traditional passenger car, the maximum tax-deductible depreciation is capped at an acquisition cost of approximately €25,000.
• This cap is higher for EVs (€62,500) and PHEVs (€50,000), aligning with the VAT deduction rules.

Autonomous Taxation (Tributação Autónoma)

Companies in Portugal that provide cars for the private use of their employees may be subject to “Autonomous Taxation” (Tributação Autónoma), an additional tax on certain company expenses. The tax rate depends on the vehicle’s cost and environmental characteristics. The autonomous taxation on expenses with vehicles can be summarised as follows:

Cost of acquisition/type of vehicle	Plug-in-Hybrids*	VNG	Other
Acquisition cost lower than €37,500	2.5%	2.5%	8%
Acquisition cost between €37,500 and €45,000	7.5%	7.5%	25%
Acquisition cost equal or higher than €45,000	15%	15%	32%

*Which battery can be charged using a connection to the power grid, having a minimum electric autonomy of 50k, e official emissions of less than 50gCO2/km.

• EVs are exempt from autonomous taxation if their cost is less than €62,500.
• PHEVs and other fuel types are subject to specific rates.

Invoice Requirements

To claim any applicable VAT deductions, the purchase invoice must be in the company’s name, include its VAT number, and comply with all legal requirements.

Contact Us

For more information, please contact Dixcart Portugal: advice.portugal@dixcart.com.

Note that this is not tax advice and is for discussion purposes only.

Introduction

Throughout 2025, we have explored a range of topics highlighting why Cyprus continues to be an attractive destination for individuals, entrepreneurs, and businesses alike. From tax residency benefits and retirement advantages to corporate structures and investment opportunities, our articles this year have provided clear, practical guidance for those considering relocation to or investment in Cyprus.

In this year-end wrap-up, we summarise the key insights from 2025 and provide links to our detailed articles for those looking for more information.

Individuals

Cyprus Tax Residency for Individuals

Cyprus continues to be a highly competitive location for individuals seeking favourable tax residency. Whether you are considering moving to Cyprus for work, retirement, or investment purposes, the rules are clear and accessible, as there are only two rules to remember: the 183-day rule and the 60-day rule.

The 60-day tax residency rule allows you to establish tax residency after spending only 60 days in Cyprus each year, provided certain conditions are met. For a full explanation of both the 183-day rule and 60-day rule, see our detailed guide on Cyprus tax residency.

The Cyprus Non-Domicile Regime

Cyprus has a highly competitive Non-Domicile Regime which taxes an individual on their worldwide income at preferential rates. This means you can remit your income to Cyprus and use it, rather than keeping it ring-fenced in a separate jurisdiction.

The special rates include 0% income tax on most dividends, interest, capital gains, and royalties. In addition, there is no wealth or inheritance tax in Cyprus. The Non-Dom Regime is available for 17 years within the first 20 years of tax residency and does not have a cost of participation, unlike many others across Europe.

If you are considering moving to Cyprus and benefitting from the Non-Dom Regime, you can learn more in our guide to moving to Cyprus and Non-Domicile regime article here.

Moving to Cyprus

Moving to Cyprus is becoming increasingly popular, with expats making up roughly 20% of the population. There are a number of different routes to residency  each tailored to different needs.

Many individuals employed or running their own business relocate to Cyprus to take advantage of the Non-Domicile regime mentioned above. A growing number of founders and entrepreneurs are taking advantage of the exciting changes to the Startup Visa Options, while those making the most of Cyprus as the Perfect Retirement Destination with fantastic Tax Benefits for those with an overseas pension  have been retiring to Cyprus for years.

For skilled professionals from outside the EU, the EU Blue Card  offers a pathway to work and live in the country, providing a streamlined route to residency.

Corporates

Cyprus as a Corporate Hub

Provided that a company has sufficient Economic Substance in Cyprus, it is considered a Cyprus Tax Resident, and as a result, can make the most of the fantastic Corporate Tax Regime available.

Our article on incorporating a Cyprus company  breaks down the fundamentals of incorporation, outlining the practical steps and highlighting the benefits available.

Cyprus’s competitive corporate tax rates, absence of withholding taxes on dividends, and access to an extensive network of double tax treaties mean companies can benefit from holding structures, family offices, and other tax-efficient investment vehicles.

As a result, Cyprus companies can be effectively used for cross-border investments, including stock market participation and asset management through family offices. Using a Cyprus company for investment in the stock market  and setting up a Cyprus family office  are popular structuring options that are being utilised more and more each year.

In recent years, Cyprus companies have become particularly attractive to individuals from countries outside the European Union, such as India, South Africa, and the Middle East. Many Indian families and NRIs are benefiting from Cyprus holding companies, and they are also using Cyprus as a Gateway for Indian Cross Border Transactions  for their for global financial planning.

Trusts

In addition to the excellent personal and corporate benefits of establishing a presence in Cyprus, there are also well-established, tested, and beneficial trust laws. The Cyprus International Trust  offers another layer of protection for wealth management and succession planning, ensuring your legacy is preserved for the next generation.

How can Dixcart Cyprus Help?

With over 50 years of experience in the sector, Dixcart have a wealth of knowledge in assisting families, and our teams offer in-depth expert knowledge on the local regulatory framework along with the backing of our international group of offices to help us find the perfect solution for you.

At Dixcart we know that every individual’s needs are different, and we treat them as such. We work very closely with our clients and have an in-depth understanding of their needs. This means we can offer the most bespoke services possible, propose the most appropriate structures, and support your specific requirements every step of the way.

We offer services raging all the way from company incorporation, Management and accounting services, and company secretarial services all the way to providing a serviced office for your Cypriot company.

If you are interested in discussing your options and how using Cyprus to manage your wealth could help you, please contact us at advice.cyprus@dixcart.com. We will be happy to answer any questions you have and assist in any way we can.

For international tax and legal advisers, selecting the right jurisdiction for a client’s holding company is a balance of commercial flexibility, fiscal efficiency, reputation, and regulatory integrity. The environment for cross-border structuring has evolved sharply in recent years, yet the Isle of Man continues to stand strong as a jurisdiction of choice.

Regulatory Credibility and Professional Depth

Advisers today seek jurisdictions that align with OECD standards, FATF expectations, and BEPS-era substance requirements.

The Isle of Man offers a well-regulated environment backed by a transparent and internationally respected legal framework. Importantly for practitioners, this is reinforced by a mature and diverse advisory network, ensuring local compliance and substance support are readily available. For clients who demand both efficiency and integrity, the Isle of Man stands out as a trusted choice.

Tax Neutrality Without Reputational Risk

The island’s 0% corporate income tax rate (in most cases) remains one of its most compelling features. Combined with no capital gains, inheritance, or stamp duties, and no withholding tax on dividends, an Isle of Man holding structure delivers genuine tax neutrality.

In November 2024, thee Isle of Man adopted the Pillar Two Global Minimum Tax regime as part of the Organisation for Economic Co‑operation and Development (OECD) framework, introducing a 15% Domestic Top-up Tax (DTUT) for multinational enterprise (MNE) groups with consolidated revenues of €750 million or more in their ultimate parent entity’s accounts.

For advisers, this means clients can consolidate international investments without triggering unnecessary tax leakage, while maintaining full compliance with global transparency frameworks.

Structuring Flexibility Under the Companies Act 2006

The Isle of Man’s Companies Act 2006 provides a modern, streamlined approach to corporate governance:

• Distributions based on solvency, not accounting profits.
• Shares without par value and simplified capital maintenance.
• Continuation and re-domiciliation in or out of the jurisdiction.

For group reorganisations, investment platforms, or acquisition vehicles, these features reduce administrative friction and offer advisers greater structural flexibility than traditional common-law company codes.

Substance that Matches the Client Profile

Economic substance requirements have shifted the conversation from “where is it incorporated?” to “what happens there?”

For pure equity holding companies, the Isle of Man applies proportionate standards that include maintaining qualified directors, adequate records, and demonstrating local oversight of strategic decisions.

A Safe Regulatory Reputation for Institutional Acceptance

One of the practical tests for any jurisdiction is whether institutional investors and counterparties will readily transact with an entity incorporated there. The Isle of Man passes that test comfortably. Its global reputation, supported by consistent cooperation with international standards, means an Isle of Man company rarely faces stakeholder concerns.

Get in Touch

At Dixcart Isle of Man, we combine decades of experience with a forward-thinking approach to structuring solutions.  If you or your client would like additional information on Isle of Man holding structures, please contact Paul Harvey at: advice.iom@dixcart.com to discuss how we can assist.

Dixcart Management (IOM) Limited is Licensed by the Isle of Man Financial Services Authority