Case Study: Relocation from Portugal to Cyprus and Dividend Tax Optimization

Case Study

The client owned an operating company in Portugal, was a tax resident of the country, and annually paid substantial amounts of tax on dividends.

The client’s request was to retain the Portuguese business, relocate to Cyprus with the family, obtain Cyprus tax residency with non-dom status, and legally minimize the tax burden on dividends.

Feod Group Solution

We handled the project comprehensively – with one team of international lawyers, tax advisors, and immigration specialists.

For the client, we developed and implemented a turnkey structure:

1. a Cyprus holding company was registered, becoming the 100% shareholder of the Portuguese business;
2. a full substance structure was established in Cyprus, including a director, corporate administration, and a bank account;
3. the EU Parent–Subsidiary Directive mechanism was applied for efficient dividend distributions within the EU;
4. the structure was built in compliance with European requirements for genuine business presence (beneficial ownership) and international tax compliance rules;
5. the family’s relocation to Cyprus and obtaining Permanent Residency through investment starting from €300,000 were organized.

Result for the Client

As a result, the client retained the operating business in Portugal, successfully relocated the family to Cyprus, and obtained Cyprus tax residency with non-dom status.

Thanks to the established international structure, the client:

• continued operating within the EU through the existing Portuguese company;
• obtained Cyprus Permanent Residency for the entire family with the first residence card issued for 10 years;
• legally optimized dividend taxation. As a non-dom resident, the client does not pay Special Defence Contribution (SDC) on dividends and only pays the GESY contribution – 2.65% on dividends up to the €180,000 threshold. The maximum tax burden is approximately €4,770 per year – even with dividends exceeding €1 million.

Feod Group – One Team for International Solutions

We bring together lawyers, tax advisors, and immigration specialists to provide clients with comprehensive support: from business structuring and tax planning to family relocation and obtaining temporary or permanent residence permits.

When all project elements are implemented by one team, the client receives the key advantages:

• a coordinated strategy
• reduced risks
• time efficiency
• and a result that works effectively in the long term.

If you are considering relocation, international business structuring, or tax optimization, Feod Group specialists will help you find a solution tailored to your situation.

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