EU property held through a special-purpose company
A property in Cyprus is owned by a company formed for it, and that company by the owners' BVI holding company, so the building has one owner of record with its own accounts, financing and register entries.
Ownership chart
- Owner A owns 80% — Holding company
- Owner B owns 20% — Holding company
- Holding company owns 80% — Property company
- Owner B owns 20% — Property company
Property is often held in a company formed for that one asset. The company is the owner of record, borrows against the building and signs the leases, and the investors own its shares. A sale or a change of investors can then be made by transferring shares, and the property’s income and costs sit in one set of accounts.
In Cyprus such a company pays corporate tax at 15% on its rental income, and stamp duty was abolished from 2026. Its shares are within Cyprus capital gains tax, because they draw at least 20% of their value from Cyprus property; the line was 50% until 2026.
The EU AML Regulation adds a rule for owners from outside the EU. From 10 July 2027, a company or trust from outside the EU that acquires real estate in the EU must register its beneficial owners in an EU central register. Here the property is held by a Cyprus company whose owners are already in the Cyprus register; the rule reaches a non-EU company in the chain that buys EU property in its own name.
Who is the beneficial owner
Owner A holds 80% of the holding company, which holds 80% of the property company — 64% by multiplication — and A controls the holding company, which controls the property company. Owner B has two chains. B's 20% of the holding company gives 16%, and B's direct holding adds 20%, so B has 36% in all. Neither chain reaches 25% alone. Added together — the method of the EU AML Regulation, which applies from 10 July 2027 — they do, so B is a beneficial owner of the property company as well. The BVI register of the holding company uses a 10% line, so both owners appear there on their direct shares.
| Person | Through shares | Through a role |
|---|---|---|
| Owner A | 64% | — |
| Owner B | 36% | — |
What each layer files and keeps
- 01
The owners
Identity and address, tax residence, the source of the money used to buy the property, and the agreement between the two owners, covering Owner B's direct holding as well.
- 02
The holding company
Its register of members, filed privately with the BVI Registrar; the beneficial-ownership filing, made by the registered agent and updated within 30 days of any change; the annual financial return to the registered agent within nine months of the year end; and the economic substance declaration.
- 03
The property company
The purchase contract and title, the loan and security documents and the leases; the Cyprus beneficial-ownership filing and its annual confirmation; audited IFRS accounts, the HE32 annual return and the tax return, with rental income taxed at 15%.
What to watch
- From 10 July 2027 a company or trust from outside the EU that acquires EU real estate must register its beneficial owners in an EU central register; one already holding EU real estate on that date files by 10 January 2028, and changes are reported within 28 days
- Since 2026, shares in a company that draws at least 20% of its value from Cyprus property (previously 50%) are within Cyprus capital gains tax, so a sale of the property company's shares is taxed in Cyprus
- The BVI is on Cyprus's 2026 list of low-tax jurisdictions, so dividends the property company pays its holding company can bear withholding, and interest paid to it is not deductible, unless an exemption applies
- The BVI has been on the FATF list of jurisdictions under increased monitoring since June 2025 and on the EU list of high-risk third countries since January 2026; EU banks and other obliged entities apply enhanced due diligence to BVI-linked relationships
What the dossier keeps
- The ownership chart, with both of Owner B's holdings shown and evidenced
- The title, purchase and financing documents for the property
- Both companies' registers and beneficial-ownership filings, reconciled with each other
- The calendar of filings in Cyprus and the BVI, and the EU register dates that apply from July 2027 to any owner of EU property from outside the EU
Jurisdictions in this structure
Cyprus
An EU member state with English-based company law, used for holding, financing, IP, shipping and fund vehicles; a 15% corporate tax rate since 2026 and a non-public beneficial-ownership register.
British Virgin Islands
A Caribbean jurisdiction whose business company serves holding, joint-venture and fund structures; on the FATF grey list since June 2025, on the EU list of high-risk third countries since January 2026, and in Annex II of the EU tax list.
General information, not advice. Facts are stated as of the date on each page. Law, lists and rates change; the professional who acts for the entity confirms what applies to it. Chrysos performs no regulated act and gives no legal or tax advice.
- EU Anti-Money Laundering Regulation (EU) 2024/1624 (EUR-Lex)
- Regulation (EU) 2024/1624, Article 67 — non-EU entities and EU real estate (Springlex reading aid)
- Regulation (EU) 2024/1624, Article 52 — indirect ownership across chains (Springlex reading aid)
- Trident Trust — Summary of Cyprus's 2026 tax reforms
- Andersen — Cyprus low-tax jurisdictions list for 2026
- Appleby — Key developments in the BVI beneficial ownership regime (February 2026)
- Maples — BVI business companies, requirements for new annual returns