Cyprus vs France: Tax Comparison for Founders

Founders often compare France and Cyprus on the corporate tax rate alone. What actually decides how much you keep is the full path from company profit to money in your hand. France taxes profit at 25%, then applies the 30% flat tax when you distribute it. Cyprus charges 15% corporate tax and, for non-domiciled residents, nothing further on dividends beyond a small capped contribution. Here is the comparison for a founder.

France vs Cyprus: the headline numbers

How France taxes company profit

A French company pays 25% corporate tax on its profit. That is the first layer.

When profit is distributed, the dividend is subject to the prelevement forfaitaire unique (PFU), a 30% flat tax made up of 12.8% income tax and 17.2% social charges. A founder can elect for the progressive scale instead, but for most distributions the 30% flat tax is the relevant rate.

So a euro of profit is taxed at 25% inside the company, then the remainder is taxed again at 30% on the way out.

How Cyprus taxes the same profit

A Cyprus company pays 15% corporate tax. After that:

• Ordinary dividends paid to non-residents generally carry nil Cyprus withholding, subject to statutory defensive measures and recipient-country tax.
• A non-domiciled Cyprus tax resident pays no income tax or Special Defence Contribution on dividends.
• The only charge is the General Healthcare System contribution at 2.65%, capped at 180,000 euros of annual income.

There is no Cyprus capital gains tax on a share sale unless the company holds immovable property in Cyprus, and there is no wealth tax.

What actually changes the outcome

A Cyprus company does not help a founder who stays French tax resident, and French CFC rules can tax a low-taxed foreign company in the owner's hands. France's exit tax can also apply to unrealised gains on substantial shareholdings when a person leaves France.

The result depends on genuinely becoming Cyprus tax resident, ending French tax residence cleanly, and building real substance in Cyprus. To understand the Cyprus side in detail, see our guide to Cyprus tax residency and non-dom status, or contact us to discuss your situation.