UK LLP profits paid to Cyprus non-dom

[Eurocash]

Does anyone have any exprerience with how Cyprus views LLP profits as a source of income?

Profits from a share in a partnership structure, like the UK LLP, are not the same as dividends from a company, I'm well aware of that.

But I just wonder how this is managed in reality? Is it interrogated aggressively?

Would be a pretty nice and simple structure to have a UK LLP send the profits to a non-dom in Cyprus who pays 0% + NHS contribution.

Easy access to banking etc.

Thoughts?

 

[BasedOperative]

Would be interested in knowing more about this as well.

I guess they’d be treated‌ as personal income though, since the LLP is a partnership, not a corporation (and it‍ doesn’t distribute dividends).

I could be wrong though, and honestly I hope so, lol (since⁠ it would indeed be a pretty nice and lean low-tax setup).

Maybe @CyprusLawyer101 or @CyprusLaw can help

 

[Marzio]

You are correct. It's taxed‌ as personal income

 

[Eurocash]

I think it’s clear that it would be assessed as income tax if reported as‌ such

 

[CyprusLawyer101]

Partnerships are generally considered transparent vehicles , where taxation is attributed to the partners.

 

[Drimsany]

I'm non-dom in Cyprus too, and as long as the profit doesn't actually hit my‌ local account, there's no Cyprus tax. Key thing is keeping it offshore and not remitting.‍

 

[OVZA LLC]

Using a UK LLP is definitely something a lot of people with offshore structures do,‌ it's a common setup. The key thing to watch out for is not triggering UK‍ transfer pricing rules, which generally kick in once your total revenue crosses £10 million per⁠ year. If you go beyond that and the structure isn’t properly separated, you could end⁤ up attracting unwanted HMRC attention and possibly ruin the entire setup. Keep in mind that⁣ transfer pricing rules in the UK are extremely broad.

A common approach we see is⁢ to use the UK LLP as a trusted, high-reputation entity that routes profits to a︀ more tax-efficient jurisdiction, like St. Lucia, Bahamas, or Antigua and Barbuda. These countries︁ don’t tax foreign-sourced income, so the structure stays clean. Personally, I wouldn’t recommend routing UK︂ LLP profits to Cyprus, while Cyprus is relatively tax-friendly for non-doms, it’s still a high-regulation︃ jurisdiction and adding it to the chain just makes things more complex than they need︄ to be.

Banking-wise, it’s usually straightforward to open accounts for both the UK LLP and︅ the receiving offshore entity. We support a wide list of banking partners that can onboard︆ these structures, you can check our full service offering here, including offshore bank account setup:︇

https://ovza.com/open-an-offshore-bank-account/

 

[happyjohn]

That’s also how I’ve understood the rules, and I’ve handled⁠ it that way for years without paying tax in Cyprus, and without any issues at⁤ all.

 

[BasedOperative]

Are you sure that’s the way it works?

 

[uplana]

You're mostly right, Cyprus doesn't tax foreign passive income for⁠ non-doms, regardless of remittance.

It's not about whether the profit hits a local account, but⁤ the income type and your non dom status.

So you're safe as long as it's⁣ offshore investment income.

 

[BasedOperative]

I’m not sure they’re referring to passive income, but rather active income⁤

 

[Drimsany]

I had to send a bunch of emails once after I setup a company and wanted to let people know. What helped was using a simple spreadsheet with names and‌ emails, then plugging that into a mail merge tool with my email template. Everyone got‍ a message starting with “Dear [First Name]” and it looked personal even though it was⁠ sent in bulk. Felt more real than just blasting out a generic message. If your⁤ list has names, a basic mail merge should do the trick without making it look⁣ spammy.

 

[happyjohn]

The Cypriot‌ tax authorities are pretty laid back and lazy when it comes to companies owned by‍ foreigners, even if they’re actually based in Cyprus.

 

[CyprusLawyer101]

Foreign source income from active operations aborad are taxable in Cyprus. For example the LLP‌ income referencednin this threat. Its true the Cyprus tax authorities are not sctively chasing false‍ or non disclosurew but that doew not make iy legal.

 

[icecold]

Yeah, one thing is what you can do, another is what’s actually legal, and then‌ there’s all the stuff you do to save on taxes that pushes right up to‍ the edge without crossing it.