Intellectual Property

TAX PLANNING / Intellectual Property
Intellectual Property (IP) Holding

Most companies hold Intellectual Property Rights (IPRs) of some sort. They might have been acquired or development internally. When they might consider licensing the use its IPR to external parties or companies within the group, an IP holding company can be set up to centrally manage these activities. If the IPRs are transferred to a company that is based in a beneficial tax regime, the tax burden can significantly be reduced.
 
So when you structure the ownership of your IPRs adequately and when you channel your license payments, it can lead to significant tax benefits.

A number of other benefits that an IP holding company can have for you are by placing your IP in one entity you are able to streamline the internal processes for inter-group licensing. Cross-jurisdictional tax issues become simpler as you will be regularly licensing IP between the same jurisdictions.

You can justify staffing that entity with people who have the skills to manage the same so protecting valuable assets of the company further, simplifying the licensing process. Assets can be valued due to the income stream that accrues for the benefit of the IP holding company.
 
The value of the shares in the entity can be included into the accounts which will benefit the shareholders of the holding company.
 
Cyprus: Ideal IP location
 
IP can be one of the most valuable assets of an organization. Choosing the right location for the centralization and management of IP is a very important strategic business decision. The ideal location to establish an IP structure is one that can serve the organization’s business strategies/model, safeguard and protect its IP and contribute to its tax optimization.
 
Cyprus offers an efficient IP tax regime coupled with the protection afforded by EU member states and by the signatories of all major IP treaties and protocols.
 
BA number of other benefits that an IP holding company can have for you:
 
  • By placing your IP in one entity you are able to streamline the internal processes for inter-group licensing.
  • Cross-jurisdictional tax issues become simpler as you will be regularly licensing IP between the same jurisdictions.
  • You can justify staffing that entity with people who have the skills to manage the same so protecting valuable assets of the company further, simplifying the licensing process.
  • Assets can be valued due to the income stream that accrues for the benefit of the IP holding company.
  • The value of the shares in the entity can be included into the accounts which will benefit the shareholders of the holding company.
 
Low Tax Jurisdiction Cyprus

Our holding jurisdiction of choice is Cyprus because of its accession to the European Union and its friendly tax regime.

Cyprus offers you the following characteristics:

  • Lowest corporation tax rate in Europe (12.5%). There is a tax exemption for IP holding companies of 80% on incoming royalties, leading to an effective tax of only 2%, the lowest in the EU.
  • As a member of the EU royalty payments can be received from group companies in EU member states without withholding taxes (as per the EU interest and royalty directive).
  • Access to the European Union and an extensive network of double-tax treaties.
  • No withholding taxes on outgoing royalties, irrespective of the jurisdiction where the recipient is based.

Do not hesitate to Contact Us for a tailor made FREE CONSULTATION that will analyse how tax planning and the use of a holding company can protect your assets and help you start saving taxes.
 
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