Founders comparing a Greek IKE, a Cyprus Ltd and a UAE company usually start with the headline rates: 22%, 15% and 0–9%. The real question is where you live and where the company is actually run. If that is Greece, Greek rules can pull a foreign company’s profits back into the Greek tax net.
The short answer
- Corporate tax: Greek IKE 22%. Cyprus 15% from 2026. UAE 0% up to AED 375,000, then 9%; qualifying free zone income can be taxed at 0%.
- Dividends to you as a Greek resident: taxed in Greece at 5%, whichever country the company is in.
- Substance: a Cyprus or UAE company has to be genuinely managed there. If you run it from your desk in Athens, Greece can treat it as a Greek tax resident.
- CFC rules: Article 66 of the Greek Income Tax Code can tax a controlled foreign company’s passive income in your hands, even if nothing is paid out.
- Audit: required in Cyprus, where small companies can opt for a lighter review by the auditor; in the UAE, required for corporate tax for qualifying free zone companies and above AED 50 million revenue, and many licences ask for audited accounts anyway; usually not for a small IKE.
Side by side
| Greek IKE | Cyprus Ltd | UAE company (free zone / mainland) | |
|---|---|---|---|
| Corporate tax | 22% | 15% (from 2026) | 0% to AED 375,000, then 9%; qualifying free zone income 0% |
| Dividends to a Greek-resident shareholder | 5% withheld | Generally no Cyprus withholding; 5% in Greece | 0% UAE withholding; 5% in Greece |
| Substance / management and control | Resident in Greece | Management and control in Cyprus; incorporation test unless a treaty says otherwise | Free zone 0% needs adequate substance in the UAE |
| Setup and annual compliance | Online formation in days; double-entry books, monthly VAT, myDATA, accounts on GEMI | Registrar of Companies; accounts, tax return, annual return | Free zone or mainland licence and renewal; corporate tax registration and return |
| Audit | Only above size thresholds | Required; small companies can opt for an auditor’s review | For corporate tax: qualifying free zone companies and revenue above AED 50 million; many licences require audited accounts anyway |
| VAT | 24% | 19% | 5% |
Greek IKE
The IKE is taxed at 22% corporate income tax. When profit is paid out, 5% dividend tax is withheld. Profit left in the company carries 22% only.
Formation takes a few days. The ongoing costs are what count: trade fee, EFKA for the administrator, double-entry books and monthly VAT returns, all covered in our IKE setup and annual costs guide. A statutory audit applies only above size thresholds that a typical founder company stays well below.
Cyprus Ltd
From tax year 2026, Cyprus taxes company profits at 15%, up from 12.5%, under the tax reform laws published in the Official Gazette on 31 December 2025. The reform also abolished deemed dividend distribution for profits earned after 31 December 2025 and added an incorporation test to company residence.
Cyprus generally does not withhold tax on dividends paid to non-resident individuals. Annual financial statements go through a statutory audit by a licensed auditor; small companies below the size thresholds can now opt for a lighter review by the auditor instead. VAT is 19%, with registration above €15,600 of taxable supplies. Official sources: the Cyprus Tax Department and the Registrar of Companies. For personal tax in Cyprus, see Greece vs Cyprus, Portugal and Spain for freelancers.
UAE company
Under Federal Decree-Law No. 47 of 2022, corporate tax is 0% up to AED 375,000 of taxable income and 9% above. A company incorporated in the UAE is resident there; a foreign company is too if it is effectively managed and controlled in the UAE.
A free zone company that is a Qualifying Free Zone Person pays 0% on qualifying income. Conditions include adequate substance in the UAE, arm’s-length pricing and audited financial statements (Ministerial Decision No. 84 of 2025). Other income is taxed at 9%, and non-qualifying revenue above the de minimis limit of Cabinet Decision No. 100 of 2023 (AED 5 million or 5% of revenue, whichever is lower) costs the status. Mainland companies pay the regular rates. Outside corporate tax, many free zone authorities require audited accounts to renew the licence.
The default UAE withholding tax rate is 0%. VAT is 5%, with mandatory registration above AED 375,000. Official sources: the Federal Tax Authority and the Ministry of Finance.
If you live in Greece: three rules that change the picture
1. You are taxed on worldwide income
If you are a Greek tax resident, AADE taxes your worldwide income. Dividends from a Cyprus or UAE company are taxed at 5% in Greece, as from an IKE. Foreign tax on that income is credited up to the Greek tax on it. See tax residency in Greece.
2. The company can become Greek tax resident
Under Article 4(3) and (4) of the Income Tax Code, a company is Greek tax resident if its place of effective management is in Greece at any time in the tax year. AADE looks at the facts:
- where day-to-day management happens,
- where strategic decisions are made,
- where the general meeting and board meetings take place,
- where books and records are kept,
- where the directors live.
The majority shareholders’ residence can count alongside these. A founder who lives and works in Greece can meet most of these points, which can bring the company’s profits into Greek corporate tax at 22%. Where a tax treaty applies, it may settle a dual claim.
3. Greek CFC rules
Article 66 of the Income Tax Code (Law 4172/2013) can add a foreign company’s undistributed income to the taxable income of its Greek-resident controller. Three conditions apply together:
- you, alone or with associated enterprises, hold more than 50% of the votes, capital or profit rights,
- the tax the company actually pays is less than half of what it would pay on the same profit in Greece,
- more than 30% of its income is passive: interest, royalties, dividends and share gains, leasing, insurance and banking income, or invoicing with associated companies that adds little or no value.
There is an exception for companies with substantive economic activity backed by staff, equipment, assets and premises. It does not apply to companies resident in a third country outside the EEA, such as the UAE.
Income from active services is not on the passive list. For such businesses, the place-of-management rule above is the one to look at.
Which one fits?
- You live in Greece and run the business from here: a Greek IKE often matches reality. Compare it with a sole proprietorship and, if you qualify, the 50% exemption under Article 5C.
- You plan to live in Cyprus or the UAE: personal residence and real substance there decide, not the headline rate.
- You already own a Cyprus or UAE company and are moving to Greece: check where it will be managed before you move, with your adviser in that country.
Get a free check
At taxomade we prepare and file accounts, VAT returns and tax returns for Greek IKEs and sole proprietors; we don’t set up Cyprus or UAE companies. Living in Greece and weighing a structure? Send us a message on WhatsApp for a free check, or see our ongoing bookkeeping service.
Frequently asked questions
Can I run a Cyprus or UAE company while living in Greece?
You can own one, but where you manage it matters. Greece treats a foreign company as Greek tax resident if its place of effective management is in Greece at any time in the tax year. If you make the day-to-day and strategic decisions from Greece, the company’s profits can end up taxed in Greece at 22%.
Do I pay tax in Greece on dividends from a Cyprus or UAE company?
Yes, if you are Greek tax resident. Greek residents are taxed on worldwide income, and dividends, including dividends of foreign origin, are taxed at 5%. Tax paid abroad on the same income can be credited, up to the Greek tax on it.
What are the CFC rules in Greece?
Article 66 of the Greek Income Tax Code can add a foreign company’s undistributed income to the taxable income of a Greek resident who controls it. It applies when the owner holds more than 50%, the company pays less than half the tax it would pay on the same profit in Greece, and more than 30% of its income is passive, such as interest, royalties or dividends.
Is a UAE free zone company tax-free?
Not automatically. A Qualifying Free Zone Person pays 0% corporate tax on qualifying income, but must keep adequate substance in the UAE, prepare audited financial statements and meet other conditions. Income that does not qualify is taxed at 9%.
What is the corporate tax rate in Cyprus in 2026?
15%. The Cyprus tax reform raised the rate from 12.5% for tax year 2026 and abolished the deemed dividend distribution rules for profits earned after 31 December 2025.
Rules as of November 2026 (Greece: Income Tax Code arts. 4, 40, 58, 64 and 66, Law 4172/2013; Cyprus: 2026 tax reform; UAE: Federal Decree-Law No. 47 of 2022 as amended, Cabinet Decision No. 100 of 2023, Ministerial Decision No. 84 of 2025).