Cyprus tax - recommended service provider?

J

jlie

Hi,

I live in northern Europe. I consider incorporating a Cyprus company to use for my US stock trading.

A Cyprus company is exempt on capital gains.

Does anyone in here have experience with Cyprus offshore services?

I am contacting different corporate service providers. The fees seems to run at EUR 7000 minimum for all services, ie directors, accounting, audit, tax return pr year.

I plan to trade through Interactive Brokers.

Anyone recommendations?

Thanks
 
Quote from jlie:

Hi,

I live in northern Europe. I consider incorporating a Cyprus company to use for my US stock trading.

A Cyprus company is exempt on capital gains.
More...

I think all companies incorporated offshore are exempt from paying capital gains tax. Why don't you just incorporate in a cheaper jurisdiction like Bahamas where you do not need to keep books locally and your fees can run as low as $400/yr?

Even an Irish corp. is exempt I think. I believe all foreign entities are exempt from paying capital gains tax although that may change in he future. Do not forget that legally speaking, countries that are part of the EU (and I think Cyprus is now) are required to disclose beneficiaries to EU authorities and this may be a problem if your country of residence is part of EU too.

Ron
 
I considered using Cyprus as it is part of the EU. They have a 10% tax on normal profits but exempt capital gains.

The EU commission recently ruled against the UK CFC rules. Therefore I considered using Cyprus as they are part of the EU.

The fees for a Cyprus co are relatively high. As I do a lot of transactions I am concerned about the fees involved ofr accounting and auditing.

Now I am working on a secondary option of incorporating in Belize with effective seat of management in my home country. I pay normal corporate taxes but avoid public accounting and have a flexible legal structure.

Regards
J

Quote from ronblack:

I think all companies incorporated offshore are exempt from paying capital gains tax. Why don't you just incorporate in a cheaper jurisdiction like Bahamas where you do not need to keep books locally and your fees can run as low as $400/yr?

Even an Irish corp. is exempt I think. I believe all foreign entities are exempt from paying capital gains tax although that may change in he future. Do not forget that legally speaking, countries that are part of the EU (and I think Cyprus is now) are required to disclose beneficiaries to EU authorities and this may be a problem if your country of residence is part of EU too.

Ron
More...
 
Ck2znYNWgAArijM.jpg
 
Try www.treppides.com -- Not one of the big 4 in Cyprus, but probably 5-6. Careful with using your Cyprus vehicle to save taxes in your Scandinavian country.

1. Scandinavian tax agencies are notorious for ripping apart tax saving schemes. They have the most hardcore reputation across Europe.
2. Most likely they will argue that your foreign corporation is merely a shell and not an actual physical organization with an office and employees. In fact, your trading happens in Oslo or Stockholm, not in Limassol.

Contact a local, Scandinavian tax law firm for advice and don't be cheap with it ... before you spend the money on your Cyprus company on a structure that costs you €20k over 3 years, then gets torn to shreds in a local courtroom. Leaving you with massive legal costs and tax debt.

Or, do it properly: move to Cyprus, get health insurance there, get bank accounts there etc and make it the center of your life. Then you're (likely) safe from prosecution from your home country.
 
Ocra, on paper, maybe, and with experience, no. There are various providers who make it simple but they are few and far between. Now, is Cyprus a smart choice, would probably say no for trading but that's something separate, €7,000 is too high. Will you receive the correct advice for the jurisdiction via an advisor, probably not, it's just not that simple and most really aren't smart enough to work out the medium to long term impact once you scratch under the surface. The post from Butterball summerises it quite well, it all depends 'why' you are using Cyprus but if you are adamant to go ahead use a local provider!
 
Last edited:
I am assuming here that the Cyprus company has no employees except you being the sole non-resident employee/director, so out of curiousity: if you live in Northern Europe how do you LEGALLY avoid paying taxes in the country you reside in with that setup? Pretty much all EU countries have CFC rules so if you own a company that has no substance you will be taxed where you are resident. Best options for this setup to work is to be EU tax resident in either Malta, Portugal, Spain, Canaries, Madeira or some Eastern European countries. You pay some tax still but not as much. Maybe UK also - I think they are a territorial tax country also. Otherwise this is just deemed to be part of your personal income and will be taxed as such. Dont know about taxes in Cyprus but I think if you were to become tax resident in Cyprus then personal income tax would apply just the same.
 
Last edited:
You must log in or register to reply here.
Back
Top