Cyprus Non Dom Taxes

[genetik]

Hello guys,

I have a questions about the Cyprus Taxes for non Doms. Can a Cyprus non Dom Person open for example a Hong Kong or Dubai Company wihtout any issues or is Cyprus like Germany for example which requires Substance in the country of the Company?

 

[Sols]

By the letter of the law, the HK or Dubai company would become tax resident in Cyprus if you manage and control it, and it would have to pay corporate income tax (12.50%) but then no further taxes if you pay yourself dividends.

In reality, enforcement has so far been quite relaxed on this. I know of several cases of expats living in Cyprus and owning/operating offshore companies, paying no corporate tax, paying themselves dividends, and not paying any tax in Cyprus. Strictly speaking, though, that might not be legal.

With increased compliance requirements and expectations (from banks/PSPs/other) of having a permanent establishment of your company, it might still be wiser to incorporate in Cyprus and pay 12.50% corporate tax, and not bother involving an offshore company.

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This is the probably the answer to your question.

 

[kkein]

Sols said:
By the letter of the law, the HK or Dubai company would become tax resident in Cyprus if you manage and control it, and it would have to pay corporate income tax (12.50%) but then no further taxes if you pay yourself dividends.

In reality, enforcement has so far been quite relaxed on this. I know of several cases of expats living in Cyprus and owning/operating offshore companies, paying no corporate tax, paying themselves dividends, and not paying any tax in Cyprus. Strictly speaking, though, that might not be legal.

With increased compliance requirements and expectations (from banks/PSPs/other) of having a permanent establishment of your company, it might still be wiser to incorporate in Cyprus and pay 12.50% corporate tax, and not bother involving an offshore company.
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Is this true for companies incorporated anywhere else too, or just HK/Dubai?
Are there workarounds such as being just UBO but having a managing director and an office in HK, for example?
And does this hold also with the 60-days regime? or would the 60-days regime (and so being in cyprus for just 60 days) exempt the UBO from having to prove the company isn't managed from cyprus?

 

[Sols]

kkein said:
Is this true for companies incorporated anywhere else too, or just HK/Dubai?
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The law doesn't discriminate based on jurisdiction. It's all the same. Maybe stay away from EU blacklisted tax havens, though.

kkein said:
Are there workarounds such as being just UBO but having a managing director and an office in HK, for example?
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As far as I know and everyone I've spoken with, the Cypriot tax authority has so far never pursued a foreigner with these kinds of arrangements. So it's impossible to answer what would and what wouldn't hold.

However, what you describe would probably work.

kkein said:
And does this hold also with the 60-days regime? or would the 60-days regime (and so being in cyprus for just 60 days) exempt the UBO from having to prove the company isn't managed from cyprus?
Click to expand...

Maybe I don't quite understand your question but the 60-day regime works to establish yourself as tax resident in Cyprus, and only works if you are not tax resident anywhere else at the same time.

Toggle signature
This is the probably the answer to your question.