Belize IBC ---> Cyprus Trading Company ---> Lithuanian Company - is it ok?

fxstarterNew MemberAuthor

Joined: Aug 2010
Messages: 41

8 Jan 2011#1

I had a consultation with a representative of Lithuanian tax authority.

To keep a warehouse in Lithuania, it is required to form a daughter company, in my case a daughter company of Cyprus trading company.

It means that sceme should be following:

Belize IBC ---> Cyprus Trading Company ---> Lithuanian Company

Just want to remind you that I am planning international trading through online webstore, eBay USA, eBay UK, eBay Germany. It is necessary to have a paypal account and good to have merchant account (It can be non-direct merchant account).

Now I am thinking what is better for me Cyprus resident company or Cyprus non-resident? I do understand all advantages of Cyprus resident company, but I am not sure if I really need them. In fact I do not need to be VAT registered as 95-98% of my customers would be physical customers, not corporations. Why should I register as a resident company?

I am seeking for compact and reasonably priced business structure, and if it is not required in my way to go as Cyprus resident company, I think it would be good to use non-resident as it does not require to keep accounting (dormant account only), it means that it can be easier and cheaper operated.

JohnLockeOffshoreCorpTalk owner

Joined: Dec 2008
Messages: 15,888

8 Jan 2011#2

First of all I would like to know why you want a Belize IBC ? It is way cheaper and more complicated and provide less privacy then a Seychelles corporation, please read the article we published about Seychelles companies, it is really worth to read in order to make a good decision:

Why Seychelles? - Blogs - Offshore Company Forum

I highly recommend to reconsider the Belize corp. and rather go for a Seychelles company.

As you describe your situation, then I would recommend you to make the Cyprus company non resident, there are no downside others than you can't register the company for VAT which you say is not necessary, so it will be cheaper to maintain a non resident Cyprus company.

Last edited: May 29, 2016

fxstarterNew MemberAuthor

Joined: Aug 2010
Messages: 41

8 Jan 2011#3

Thank you for your response.

Reason why I decided to go with Belize IBC it is that we have it already registered and it has bank account, however we haven't used this IBC for any purposes.

Do you mean that it is complicated to sign up for Cyprus company by Belize IBC?

Please let me know.

fxstarterNew MemberAuthor

Joined: Aug 2010
Messages: 41

8 Jan 2011#4

A few more questions:

If after some time we'll need to obtain VAT number, is it difficult to reform non-resident company to resident company?

Do you have any customers which use their non-resident Cyprus companies for ebay Europe (UK and Germany) and paypal Europe? Do they have any kind of problems with those organizations?

Could you please give me a link on a page from your website where I can read in detail how should be done accounting for non-resident company? Is there any difference in accounting between non-resident and resident company? If I am right, non-resident should give "dormant accounting package" only. This way which documents should we provide for your company in case if we use your accounting services?

Thank you very much for your assistance!

JohnLockeOffshoreCorpTalk owner

Joined: Dec 2008
Messages: 15,888

8 Jan 2011#5

If you already have the Belize company then it is no problem to use that one.

In regards to accounting then it is not different for a non resident or resident company, both will need to maintain accounting and we will ned to file the financial annual report each year.

We can change the status of a Cyprus company from non resident to resident at any time but not the opposite, so that's ok.

I don't know with eBay and Paypal, you better check with them directly.

fxstarterNew MemberAuthor

Joined: Aug 2010
Messages: 41

8 Jan 2011#6

Thank you for letting me know.

A few more questions about accounting:

1) How should be collected paypal invoices? Each separately or there are some ways how we can group those invoices in bulk?

2) Does Cyprus tax authorities look and fix how many exactly goods company purchased and how many sold? I mean do they fix exact quantity of purchased and sold items? I ask that due to some of our partners cannot provide invoices for clothes which they produce, those partners operates as individuals and are unable to provide an invoice. Please let me know.

JohnLockeOffshoreCorpTalk owner

Joined: Dec 2008
Messages: 15,888

8 Jan 2011#7

>>1) How should be collected paypal invoices? Each separately or there are some ways how we can group those invoices in bulk?

Thats entirely up to you how you do it, if it is in regards to book keeping issues than you can bundle them for 1 months in a bundle.

>>2) Does Cyprus tax authorities look and fix how many exactly goods compay purchased and how many sold? I mean do they fix exact quantity of >>purchased and sold items? I ask that due to some of our partners cannot provide invoices for clothes which they produce, those partners >>operates as individuals and are unable to provide an invoice. Please let me know.

Ask those to provide you something in written, it dosen't matter if that are not Invoice and if they are not a company just something in written that prove that they have delivered something to you.

BelariousNew Member

Joined: Jan 2011
Messages: 46

9 Jan 2011#8

Interesting point of view can this be done with a Delaware company or is Belize the crucial point here?

SafaActive Recruit

Joined: Jan 2009
Messages: 241

10 Jan 2011#9

Delaware and Belize don't have any Double tax treaty with Cyprus which may be the key point here.

system32Active Recruit

Joined: Feb 2010
Messages: 95

12 Jan 2011#10

We have made a similar structure like fxstarter just with a Seychelles holding. Works great!

kogiNew Member

Joined: Jan 2011
Messages: 18

3 Feb 2011#11

system32 said:
We have made a similar structure like fxstarter just with a Seychelles holding. Works great!

Maybe you could share a little information about it?

system32Active Recruit

Joined: Feb 2010
Messages: 95

4 Feb 2011#12

kogi said:
Maybe you could share a little information about it?

Yup what would you like me to elaborate?

kogiNew Member

Joined: Jan 2011
Messages: 18

4 Feb 2011#13

system32 said:
Yup what would you like me to elaborate?

Did you use a non resident company?

fxstarterNew MemberAuthor

Joined: Aug 2010
Messages: 41

5 Feb 2011#14

Yup Belize or Seychelles is not important we ended up with a resident company in Cyprus. I checked again with our rep. of Lithuanian tax authority and it has to be Cyprus resident to work.

kogiNew Member

Joined: Jan 2011
Messages: 18

5 Feb 2011#15

fxstarter said:
Yup Belize or Seychelles is not important we ended up with a resident company in Cyprus. I checked again with our rep. of Lithuanian tax authority and it has to be Cyprus resident to work.

And what is the yearly fee for this structure?

fxstarterNew MemberAuthor

Joined: Aug 2010
Messages: 41

7 Feb 2011#16

We pay about 1.900 eur for all companies including some special service agreement we made with them, so you may get it cheaper depending on what it is you want them to do.

JohnLockeOffshoreCorpTalk owner

Joined: Dec 2008
Messages: 15,888

25 Feb 2011#17

This thread has been moved to the VIP member area!

Belize IBC ---> Cyprus Trading Company ---> Lithuanian Company - is it ok?

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