Client Case April 2015 - Do you do advice on how to properly setup in the optimal way

Do you do advice on how to properly setup in the optimal way - plotting to stay in Cyprus permanently and have a bank account here, but don't really know what the ideal way to use the company/money streams is.

For the confident of our clients all discussions have been anonymized and names or companies are hidden or changed.

Our Agent:

In regards to your question I would need to know more details.

Do you plan to move permanently to Cyprus? And what advise do you seek, it's not really clear to me, please elaborate.

Our Client:

I would great appreciate your help and would of course be willing to pay for your time in helping getting setup properly.

For the last 2 years ive been to Cyprus on and off - and have my money coming into an account in Bank of Cyprus Bank. However, only this year am I planning to stay here for more than 6 month of the year -

and as such I have become worried about the urgency of getting the affairs setup properly - to know if it works before making the final decision.

I have the Belize and Seychelles company, the account in Bank of Cyprus and the vast majority of income coming by transfer from the USA - and basically want to pay what I need to with as little paperwork as possible (and as cheaply as possible, but mostly I just want the peace of mind of paying what I need - and not worry too much about the paperwork).

Is this something you can help with ?

Our Agent:

Just to be clear on this, can you put it in bullet points to what advise you exactly want from us?

It need to be pretty clear to us so we can estimate costs and also let you know if we can be of any help at all.

Our client:

Advice I need:

- Best setup for tax purposes if staying in Cyprus (ie where does the money earned go, any regs needed etc)

- Best way of avoiding paperwork

- What bank account in which country to use in future for these purposes

- Any needed registrations in Cyprus

Our Agent:

Thank you for the information, your nationality is German right?

I can get one of our tax specialists to spend 1 hour on it if you want, we will charge EUR 250 for this at a discounted rate only for this 1 hour.

Our Client:

My nationality is German indeed.

I will happily listen to what your expert has to say - getting it setup properly is important to me.

Our agent:

The client mentioned in previous email that he has a Belize and Seychelles company already which has a bank account with Bank of Cyprus. He can keep these companie if he wants and continue his business in the same way as before.

If he wants to pay taxes in cyprus as a Cyprus tax resident to avoid paying taxes in another country, then the following tax rates apply:

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If he wants to pay Social Insurance in Cyprus, he register a Cyprus company

Last edited: May 29, 2016

Our client:

It raises a few questions.

If I stay in Cyprus for more than 6month I have to become a tax resident, right ? Or is there a choice? I don't particularly have another country in mind that I want to avoid, but my worry is how the income is counted, reported and if I need to deliver accounts in Cyprus.

Basically, the income from abroad is maybe 10k eur/mo - but expenses of say 6-7k eur - if say that adds up to 40k profit taxable pr year that would be fine to pay say 10k tax on that. What I want to avoid is having to do accounts, reports, audits (I can make the money, but im terrible at the numbers and paperwork) etc etc - in which case maybe it would be better not to be a tax resident

Our Agent:

If he wants to be taxed in Cyprus as Cyprus tax resident, then he can file a tax return either as a self employed or as an employee of a Cyprus company or a foreign company.

If the Gross Income of a self employed is less than ?70.000 per year, then preparation of audited financial statements is not required.

As an employee of a company, he has to declare salaries.