Can I use Greek Paypal account to accept payments for Cyprus company?

[FriendlyFace]

Hi, folks...

I live in Greece.

I have a Business Paypal account.

Today I noticed I can add a bank from other countries as well:

https://imgur.com/jIH5S3h

So, does Paypal have a problem if I access my Paypal account from a different country, but it does allow to add banks in other countries?

I have just created a Cyprus company.

So, would I be able to just use my Paypal account to accept online payments as usual, and then withdraw that money to my Cyprus bank account (once I open it), so everything is nicely organised?

Thanks!

 

[Spinat]

You can withdraw the money to your debit card which follows the bank account in the Cyprus bank once you have opened it.

 

[Sols]

I haven't had any problem with similar setups (company in one country, bank account in another, and logging in from another). They may ask for proof that the new bank account belongs to the same company, but that's been it in my experience.

 

[FriendlyFace]

You can withdraw the money to your debit card which follows the bank account in the Cyprus bank once you have opened it.

Ok thanks. But what would be the advantage of doing this (over, say, just withdraw to the bank directly)?

I haven't had any problem with similar setups (company in one country, bank account in another, and logging in from another). They may ask for proof that the new bank account belongs to the same company, but that's been it in my experience.

See, that's what confuses me.

I have been told that, since I opened a company in Cyprus, I also need to have the bank account there. Or is this strictly for "substance" reasons, in case the country I'm a tax resident of (Greece) disputes the tax residency of my Cyprus company?

Thanks!

 

[Spinat]

So far I can only see that PayPal will require that you have a bank account in Cyprus to be able to withdraw to that account. I have not tested it but in the past I know it was possible to withdraw to a Cyprus debit card but not to a bank account.

 

[Sols]

I have been told that, since I opened a company in Cyprus, I also need to have the bank account there. Or is this strictly for "substance" reasons, in case the country I'm a tax resident of (Greece) disputes the tax residency of my Cyprus company?

There is no requirement to have a corporate bank account in Cyprus. Most service providers will recommend it because it can make things easier when it's time for your annual audit. I.e., the auditor might not be able to get a statement directly from the bank if the bank is not in Cyprus.

Your company is probably tax resident in Greece if you live there and are the company's ultimate beneficial owner. If you don't do this correctly, you could in worst case end up paying taxes in both Cyprus and Greece. Go speak with a lawyer/tax adviser.

 

[FriendlyFace]

So far I can only see that PayPal will require that you have a bank account in Cyprus to be able to withdraw to that account. I have not tested it but in the past I know it was possible to withdraw to a Cyprus debit card but not to a bank account.

Ok, thanks...

There is no requirement to have a corporate bank account in Cyprus. Most service providers will recommend it because it can make things easier when it's time for your annual audit. I.e., the auditor might not be able to get a statement directly from the bank if the bank is not in Cyprus.

Your company is probably tax resident in Greece if you live there and are the company's ultimate beneficial owner. If you don't do this correctly, you could in worst case end up paying taxes in both Cyprus and Greece. Go speak with a lawyer/tax adviser.

Yeah, I was asking my accountant about how auditing works just now. Thanks for the extra info.

Well... isn't a company tax resident in the country in which it's established (Cyprus in this case)?

I do understand that the Greek government may challenge the tax residency of my company, since I live in Greece, and yes, I'm the sole shareholder, as well as the "strategic mind."

I'll look into how I can increase my substance.

Thanks!

 

[Sols]

Well... isn't a company tax resident in the country in which it's established (Cyprus in this case)?

I do understand that the Greek government may challenge the tax residency of my company, since I live in Greece, and yes, I'm the sole shareholder, as well as the "strategic mind."

To quote Deloitte's tax guides (which are pretty good summaries of tax laws in different jurisdictions):

Cyprus: "A company is resident in Cyprus if its management and control is exercised in Cyprus. Registration in the country is not decisive." – So your company is not tax resident in Cyprus by virtue of being incorporated there. If you don't have local directors, you can probably avoid the 12.5% corporate tax in Cyprus.

Greece: "A company incorporated under Greek law or that has its registered seat in Greece or its place of effective management in Greece at any time during a tax year is considered resident for tax purposes in Greece for that tax year." – Based on that, your company is going to be resident in Greece.

Without having looked into the details, I would say your company probably qualifies as non-resident in Cyprus (no tax) but tax resident in Greece (must pay corporate tax in Greece).

 

[Spinat]

There is no requirement to have a corporate bank account in Cyprus. Most service providers will recommend it because it can make things easier when it's time for your annual audit. I.e., the auditor might not be able to get a statement directly from the bank if the bank is not in Cyprus.

No I'm well aware of that but in regards to paypal it is the way it can work. Just yesterday I notice that it was impossible to add a bank account in a different country than the PP account.

 

[Sols]

No I'm well aware of that but in regards to paypal it is the way it can work. Just yesterday I notice that it was impossible to add a bank account in a different country than the PP account.

That hasn't been my experience. I am looking at one PayPal account right now where country of incorporation does not match IBAN/bank account country.

 

[Spinat]

That hasn't been my experience. I am looking at one PayPal account right now where country of incorporation does not match IBAN/bank account country.

What country is that if you want to tell?

 

[Sols]

What country is that if you want to tell?

Looking at a few different companies:
- Maltese company: Lithuania, German, and Swedish accounts.
- Swiss company: German and Austrian accounts.
- UK company: Maltese, German, and Danish bank accounts.

 

[ontherun]

withdrawing to the bank account's VISA card (and only VISA, btw, not Mastercard) also has higher fees, sometimes up to 3.8% but some people prefer this instead of withdrawing to the actual bank account behind the card, because when withdrawing to VISA's you can use mismatched names