Questions about Cyprus as non dom and company incorporation + accounts

[Researcher]

EU citizen looking for options. Would be great to clarify some questions about Cyprus.

Goal is to find a tax optimal regime that is close to EU.

Here are questions about Cyprus.

1. If EU tax resident spends 183 days in Cyprus, they can get a paper from Cypriot tax authority that they are tax resident of Cyprus and then use this paper to cancel tax residency with existing jurisdiction, correct? I know you can spend 60 and get some tax status, but the origin country may not accept it.

2. This will still grant them non- dom status in Cyprus, correct? This comes with tax benefits.

3. If this person wants to incorporate in Cyprus and work for himself (employ himself), will this company still benefit from tax reliefs knowing this person is non dom?

4. When arranging apartment rent in Cyprus to prove you have permanent residency, do you have to pay 12 months in advance?

5. When being asked about employment and stuff, is it possible to say you have savings and will pay for life in Cyprus via gains from dividends, sell of long term crypto holdings and sale of long term stock holdings (no trading activity, just long term). Is that acceptable?

6. How easy it is to open bank account for Cyprus company in Cyprus that would receive profits from online marketing platforms like Google, Apple, etc...? Are there any sanctions against Cyprus banks?

 

[Jerry1911]

1. If EU tax resident spends 183 days in Cyprus, they can get a paper from Cypriot tax authority that they are tax resident of Cyprus and then use this paper to cancel tax residency with existing jurisdiction, correct? I know you can spend 60 and get some tax status, but the origin country may not accept it.

Yes

2. This will still grant them non- dom status in Cyprus, correct? This comes with tax benefits.

Yes

3. If this person wants to incorporate in Cyprus and work for himself (employ himself), will this company still benefit from tax reliefs knowing this person is non dom?

There are no corporate tax benefits for companies owned by non-doms, the benefits are all related to PIT and similar

4. When arranging apartment rent in Cyprus to prove you have permanent residency, do you have to pay 12 months in advance?

No

5. When being asked about employment and stuff, is it possible to say you have savings and will pay for life in Cyprus via gains from dividends, sell of long term crypto holdings and sale of long term stock holdings (no trading activity, just long term). Is that acceptable?

No, but you might be able to do this in Malta

6. How easy it is to open bank account for Cyprus company in Cyprus that would receive profits from online marketing platforms like Google, Apple, etc...? Are there any sanctions against Cyprus banks?

Bank account - no idea, but opening an EMI account is fast and easy.

 

[Researcher]

5. When being asked about employment and stuff, is it possible to say you have savings and will pay for life in Cyprus via gains from dividends, sell of long term crypto holdings and sale of long term stock holdings (no trading activity, just long term). Is that acceptable?, No, but you might be able to do this in Malta

Thanks for the reply.
And in this case, how would a investor with no employment or very low salary could prove to Cyprus that they can afford to stay there? What mechanism could be used for this?

 

[Cloudbanck]

EU citizen looking for options. Would be great to clarify some questions about Cyprus.

Goal is to find a tax optimal regime that is close to EU.

Here are questions about Cyprus.

1. If EU tax resident spends 183 days in Cyprus, they can get a paper from Cypriot tax authority that they are tax resident of Cyprus and then use this paper to cancel tax residency with existing jurisdiction, correct? I know you can spend 60 and get some tax status, but the origin country may not accept it.

The origin country is in most cases are not going to ask you for a tax residency certificate from Cyprus. They are just going to check that you have no ties to the origin country / no center of vital interest in the origin country / havent spent too many days in the origin country. And frequently they dont do much checks, they mainly just accept your new address abroad and status as non tax resident. But the more high profile, and the wealthier you are, the higher the probability they will put effort into checking.

The one exception would be if you move from an origin country that has special rules against moving to tax havens (Spain, France and Italy have such rules I think), and they consider Cyprus to be a tax haven. Then yes, they could ask you for a tax residency certificate. But in this case it is best to move to a non-tax haven country first. And Im not sure if Cyprus is classified as a tax haven country - would actually surprise me since it's an EU country.

It should also be said that in most EU countries, to register a move abroad, you just log in to a government portal or send a form to notify authorities that you have moved abroad - no proofs needed. However, for some EU countries, you have to go to an embassy in the country you have moved to and show some sort of residency permit or proof of address, in order to register that you live abroad, but not a tax residency certificate (except for the tax haven situation mentioned above).

Even if you have successfully registered that you live abroad though, tax authorities could claim that you are still a tax resident in the country of origin. And in this situation, having a tax residency certificate from Cyprus is not necessarily helpful.

 

[Researcher]

The origin country is in most cases are not going to ask you for a tax residency certificate from Cyprus. They are just going to check that you have no ties to the origin country / no center of vital interest in the origin country / havent spent too many days in the origin country. And frequently they dont do much checks, they mainly just accept your new address abroad and status as non tax resident. But the more high profile, and the wealthier you are, the higher the probability they will put effort into checking.

The one exception would be if you move from an origin country that has special rules against moving to tax havens (Spain, France and Italy have such rules I think), and they consider Cyprus to be a tax haven. Then yes, they could ask you for a tax residency certificate. But in this case it is best to move to a non-tax haven country first. And Im not sure if Cyprus is classified as a tax haven country - would actually surprise me since it's an EU country.

It should also be said that in most EU countries, to register a move abroad, you just log in to a government portal or send a form to notify authorities that you have moved abroad - no proofs needed. However, for some EU countries, you have to go to an embassy in the country you have moved to and show some sort of residency permit or proof of address, in order to register that you live abroad, but not a tax residency certificate (except for the tax haven situation mentioned above).

Even if you have successfully registered that you live abroad though, tax authorities could claim that you are still a tax resident in the country of origin. And in this situation, having a tax residency certificate from Cyprus is not necessarily helpful.

Good stuff, thanks for explaining. My next concern is - what kind of bank documents will Cyprus need to "prove my income"? If I'm basically living off savings and crypto income with very minimum salary what kind of period will that bank account printout have to be for? 6 months, 12 months? May increase salary and get it in bank just for this purpose, but I have to understand what will they look for.
Crypto and stock sales would be able to support life in Cyprus easily.

 

[Sols]

1. If EU tax resident spends 183 days in Cyprus, they can get a paper from Cypriot tax authority that they are tax resident of Cyprus and then use this paper to cancel tax residency with existing jurisdiction, correct? I know you can spend 60 and get some tax status, but the origin country may not accept it.

That's up to the existing jurisdiction. Cyprus can't tell another country what to do.

2. This will still grant them non- dom status in Cyprus, correct? This comes with tax benefits.

Yes.

3. If this person wants to incorporate in Cyprus and work for himself (employ himself), will this company still benefit from tax reliefs knowing this person is non dom?

The company itself has no tax benefits related to the owner's non-domicile status. They are separate legal persons.

4. When arranging apartment rent in Cyprus to prove you have permanent residency, do you have to pay 12 months in advance?

No, usually 1-3 months deposit plus first rent.

5. When being asked about employment and stuff, is it possible to say you have savings and will pay for life in Cyprus via gains from dividends, sell of long term crypto holdings and sale of long term stock holdings (no trading activity, just long term). Is that acceptable?

Depends on who's asking and why they're asking.

6. How easy it is to open bank account for Cyprus company in Cyprus that would receive profits from online marketing?

It's first and foremost very time consuming. I think most new companies in Cyprus nowadays open accounts with EMIs first. Local banks often take 3+ months to open am account even for low/medium risk companies.

Not all online marketing is equal. Some is low risk, some is medium, and some is high risk.

 

[Researcher]

Depends on who's asking and why they're asking.

Who may ask this? Does this question come up when applying for non-dom status, for tax residency status or applying for creation of Cyprus company?

 

[zaybxc]

I think most new companies in Cyprus nowadays open accounts with EMIs first. Local banks often take 3+ months to open am account even for low/medium risk companies.

Is it mandatory for a Cypriot company to have a local bank account?
Local banks facilitate tax payments and I'm wondering if it's possible for a Cypriot company to pay taxes with a bank account held in another EU country or Switzerland (where there are several banks specialized in the crypto field, if the company is involved in crypto trading for example).

 

[GrumpyMess]

Is it mandatory for a Cypriot company to have a local bank account?

No

 

[Sols]

Who may ask this? Does this question come up when applying for non-dom status, for tax residency status or applying for creation of Cyprus company?

Non-dom status isn't technically something you apply for. You just declare it and, assuming you have the necessary supporting documents, you get it. They don't look at your finances for that, only the facts around your origin/heritage.

In general, very few questions are asked about an EU citizen. When you first apply for residence permit (MEU1), you'll be asked to provide evidence that you meet some very basic income level requirements. I don't remember what it is, but it's some symbolic sum.

Local banks facilitate tax payments and I'm wondering if it's possible for a Cypriot company to pay taxes with a bank account held in another EU country or Switzerland (where there are several banks specialized in the crypto field, if the company is involved in crypto trading for example).

The tax and VAT authorities in Cyprus accept payment by SEPA and SWIFT. Just make sure you cover all fees yourself in case of SWIFT.

 

[zaybxc]

The tax and VAT authorities in Cyprus accept payment by SEPA and SWIFT.

What if a company has a VAT credit? Would it be deducted from corporation tax or reimbursed from the tax department?
For example no VAT applies on crypto, so a company trading in crypto might not issue any invoice and hence have no VAT debt.

 

[Sols]

What if a company has a VAT credit? Would it be deducted from corporation tax or reimbursed from the tax department?

VAT is reimbursed separately, not used as credit against corporate tax debt. IIRC, VAT and corporate tax are handled by different departments within the tax authority. You pay the two taxes separately.

 

[Researcher]

When you first apply for residence permit (MEU1), you'll be asked to provide evidence that you meet some very basic income level requirements. I don't remember what it is, but it's some symbolic sum.

This is still important, where can I read more about this? I want to know what symbolic sum exactly and what documents will they need.