IP Advisory
IP Holding Company
Ownership, licensing and assignment of intellectual property through a Cyprus entity.
What we do
We build the two entity structure software and brand owners use in Cyprus, and we keep the record that supports it. One company owns the intellectual property and licenses it out. A second company holds the customer contracts, the billing and the support, and pays a royalty for the licence.
That royalty is deductible to the operating company and is income of the owning company, where the Cyprus intellectual property regime gives an effective rate of roughly 3 percent on qualifying profits at full nexus. The structure also does what founders want commercially: the most valuable asset sits outside the entity carrying trading risk, it can be licensed to more than one operating company as the group opens markets, and an acquirer can value it on its own.
What you get
- A review of what is owned today, who built it and who paid for it
- The structure itself: the owning company, and the licence into each operating company
- A complete assignment chain, from founders, employees and contractors into the owning company
- Nexus modelling for each ownership option, run before anything is implemented rather than after
- Intragroup licensing agreements on arm's length terms
- Transfer pricing documentation supporting the royalty rate
- Independent valuation coordinated where an asset is being transferred in
- Registration of the asset where registration is available and worth having
- Qualifying and overall expenditure tracked per asset as the year runs, and the nexus fraction computed in the tax return
How it works
Which entity pays the engineers decides the size of the benefit. The nexus fraction rewards development expenditure the owning company itself incurred, whether through its own technical staff or through unrelated research partners. Geography is not the constraint. The contractual relationship is, and contracting the development from the owning company is straightforward to arrange at the outset.
Where the operating company funded the development instead, that spending is related party expenditure. It enters overall expenditure without entering the qualifying side, and the fraction compresses. Moving the development contracts into the owning company lifts it again from that point, and because the measure is cumulative it recovers as qualifying expenditure builds. We set out that trajectory before you decide.
Ownership itself is the other gap we find. Code a founder wrote personally vests in the founder until it is assigned, and many contractor agreements grant a licence rather than transfer copyright. Both are ordinary, and both surface during diligence on a sale.
Working with us
Four steps, and the first one is a conversation
A call
What the group owns, who built it, and which entity paid for it. No charge for it.
A proposal in writing
Fixed fees, not estimates: what year one costs, and what every year after it costs.
You accept
Engagement letter signed, then onboarding. Neither takes long.
The structure is in place and documented
Ownership assigned, licences signed, and the expenditure record running from the first month rather than being reconstructed at the year end.
Common questions
Does software qualify for the Cyprus IP Box?
Copyrighted software is a qualifying asset. Marketing intangibles such as brands, trademarks and image rights are not. What decides the size of the benefit is not whether the asset qualifies, but how much of the development the owning company paid for itself.
What is the effective tax rate?
Roughly 3 percent on qualifying profits at full nexus. The 2.5 percent figure still widely quoted was correct while corporation tax was 12.5 percent, and corporation tax has been 15 percent since 1 January 2026. Below full nexus the effective rate rises in proportion.
Our developers are not in Cyprus. Does that break the structure?
No. The fraction follows expenditure rather than location, so development the owning company contracts from unrelated parties counts wherever those parties are. What compresses it is development funded by a related party, and the cost of buying an asset in.
We already own the intellectual property elsewhere. Can it be moved to Cyprus?
Usually. Moving it is a disposal in the country it leaves, which is a question for your advisers there. On the Cyprus side we coordinate the valuation, draft the assignment or contribution agreement and make the filings. The acquisition cost enters overall expenditure without improving the qualifying side, so we model what that does to the fraction over the following years before anything moves.
What follows
The IP Box position is claimed in your tax return and has to be supported by records. Accounting and tax compliance keeps the accounts, coordinates the audit and files the return.
Where the owning company's technical and commercial decisions need to be visibly taken in Cyprus, economic substance is what carries that, and resident directors are how most groups arrange it.
| Standard structure | Cyprus IP holding company owning the IP, separate operating company under licence |
|---|---|
| How the operating company pays | A royalty, deductible to the payer and IP Box income to the recipient |
| How nexus is maintained | The IP company funds development through its own staff or unrelated R&D partners |
| Needs careful structuring | Development funded by a related party, which enters overall expenditure |
| Additional benefits | Asset protection, licensing to multiple operating entities, a cleaner acquisition perimeter |
| Required documentation | Assignment chain, licensing terms and transfer pricing support |
Also in IP Advisory
- Cyprus IP Box StructuringQualification analysis, nexus modelling and the deduction position under BEPS Action 5.
- Transfer PricingIntercompany pricing, local file preparation and valuation coordination.
- IP MigrationMoving existing intellectual property into Cyprus with valuation and assignment support.
Find out whether Cyprus fits your plans
It starts with three questions: where your revenue comes from, what you own, and where you are tax resident. From there, the conversation is about what you are building and where you want to take it. After the call, you receive a written proposal covering the recommended structure, the implementation roadmap, and a fixed fee quote.