As global tax rules tighten and anti-abuse scrutiny rises, many advisers will tell you that international low-tax trading structures are a thing of the past. They aren’t. But success today depends on one factor above all others: implementation.
At Savva & Associates, we are not just international tax specialists advising on jurisdiction selection and structuring. We also operate a dedicated fiduciary team that oversees the practical implementation of trading structures — where most international tax plans fall apart in real life.
Whether your goal is to pay zero tax through a transparent vehicle or 2.5%–5% effective corporate tax, properly implemented structures with genuine management and control are still achievable. This article outlines how.
The Modern Options for Low-Tax Trading Structures
Cyprus International Trading Trust (0% Tax)
A Cyprus International Trading Trust involves a Cyprus tax resident corporate trustee conducting trading activities (purchase and sale of goods or services globally). Both the settlor and beneficiaries are non-Cyprus residents. Income accrues directly to the non-resident beneficiaries and is fully exempt from Cyprus tax, provided the income is foreign-sourced.
Key benefit: Transparent structure. Zero Cyprus tax on trading profits. The Cypriot trustee only pays 12.5% corporate tax on trustee service fees.
Cyprus Trading Company (Effective Rate as Low as 2.5%)
A classic Cyprus company benefits from a 12.5% corporate income tax. Further reductions are available using the Notional Interest Deduction (NID) regime, potentially lowering the effective rate to 2.5% if equity financing is used.
Malta Trading Structure (5% Effective Tax)
By using Malta’s refund system for non-resident shareholders, the standard 35% corporate tax becomes an effective rate of just 5% through a 6/7ths refund mechanism.
UAE Trading Company (0% or 9% Tax Depending on Substance)
Properly structured UAE Free Zone companies can still achieve a 0% tax rate if they meet economic substance requirements and generate qualifying income. Since the introduction of the UAE corporate tax regime in 2024, we have had ample time to evaluate the rules in practice. Reliable structuring options are now available to clients, including 0% tax solutions specifically for trading activities involving goods.
Where Structures Fail: Substance Does Not Equal Management & Control
Substance is no longer just about having an office and an employee. Even today, many structures fail because clients (or their advisers) purchase checklist substance — rent an office, hire a staff member, incur some expenses — without securing true management and control. And that is the decisive factor in tax residence and treaty benefits.
Scenario 1: Wasting Money on Superficial Substance
A client appoints a professional fiduciary provider as director. This director sits on dozens of boards and is easily identifiable as a nominee or professional director. Management decisions are de facto taken elsewhere, often in the client’s home country.
Result: Foreign tax authorities see through this immediately. They may deem the structure tax-resident in the client’s home country, potentially triggering tax at full domestic rates plus penalties for avoidance. The client has spent money on offices, payroll, and accounting — but the structure collapses under tax authority scrutiny.
Scenario 2: Real Management & Control, Properly Documented
The company or trust appoints a board of directors with sector experience and relevant qualifications. Board meetings are genuinely held in the jurisdiction. Decision-making processes are minuted thoroughly and aligned to actual operations. Key commercial contracts, banking, and negotiations are managed locally. Day-to-day management, if delegated, is overseen and reviewed by the local board.
Result: Tax residence and treaty access are defensible. Even if challenged, the structure can demonstrate both substance and effective management and control.
Why Implementation Matters More Than Ever
Setting up a tax-efficient structure today is not just about choosing Cyprus, Malta, or the UAE and hiring a fiduciary. The implementation phase — the people, decision-making processes, and local governance — is what determines whether your structure survives the inevitable tax authority review.
At Savva & Associates, we provide international tax structuring advice (Cyprus, Malta, UAE), implementation oversight through our fiduciary services arm, and substance solutions tailored to real trading models, not just compliance checklists.
Our firm’s long-standing reputation is built not just on tax planning design but on making structures work in practice — so that they hold up not only in audits but also in today’s increasingly aggressive cross-border tax investigations.
In Conclusion
Yes, you can still achieve low or even zero-tax trading structures in today’s environment. But only if you combine jurisdictional advantages, sound international tax design, and real, documented management and control.
That’s where Savva & Associates excels — at both the design and the critical implementation phase.
Contact us today to discuss which structure suits your trading operations and how we can help ensure it is robust in both theory and practice.
Please get in touch with our team at:
| Charles Savva Managing Director BA, MBA, TEP, CA [email protected] +357 22516671 | Mina Pieri Senior Manager FCCA, MBA [email protected] +357 22510207 | Makis Pavlou Account Manager FCCA [email protected] +357 22510257 |
