Cyprus Bank Account - Read to learn how they can protect your privacy!

[JohnLocke]

Banks have to report in compliance with CRS.

CRS recognizes 2 types of companies:

1. Active Companies
2. Passive Companies

An Active Company is the company that meets any one of the following criteria:

(a) Less than 50 percent of the company's gross income for the preceding calendar year or other appropriate reporting period is passive income and less than 50 percent of the assets held by the company during the preceding calendar year or other appropriate reporting period are assets that produce or are held for the production of passive income;
(b) The stock of the NFFE is regularly traded on an established securities market or
(c) Substantially all of the activities of the Company consist of holding (in whole or in part) the outstanding stock of, or providing financing and services to, one or more subsidiaries that engage in trades or businesses other than the business of a Financial Institution

A Passive Company is a company that is not active. Basically it includes companies that have income from investment activities like dividends, interest, rent and royalties.

The beneficial owners of an Active company will not be reported by the bank

The beneficial owners of a Passive company will be reported by the bank.

So, if the company is an active, then no reporting will be made by the banks.

 

[JohnSeed]

(c) Substantially all of the activities of the Company consist of holding (in whole or in part) the outstanding stock of, or providing financing and services to, one or more subsidiaries that engage in trades or businesses other than the business of a Financial Institution

That's where we can get rid of the reporting! If we just make sure there is ongoing business in the trading company there will be no requirement for the banks to report our accounts right?

 

[JohnSeed]

The beneficial owners of an Active company will not be reported by the bank

This is an important part! means we need to get rid of the the company once we don't need it any longer!

 

[negon]

By CRS you mean Common Reporting Standard (CRS) - Organisation for Economic Co-operation and Development ??

 

[JohnLocke]

By CRS you mean Common Reporting Standard (CRS) - Organisation for Economic Co-operation and Development ??

Yes correct

This is an important part! means we need to get rid of the the company once we don't need it any longer!

Yes I agree. If you don't use the company any longer get rid of it, close it!

 

[JohnSeed]

Thanks.. your help is much appreciated

 

[redeye]

This is good news for most of us. I say we need to keep our companies busy to avoid reporting at any point.!!

 

[negon]

quick question. If this apply for busy companies then only Cyprus or all offshore companies that hold an Cyprus bank account?

 

[dotbloup]

It means that in tax planning, it is better when a business bank account beneficial owner is a nominee shareholder or an individual shareholder rather than when a business bank account is owned by a company.

 

[dotbloup]

quick question. If this apply for busy companies then only Cyprus or all offshore companies that hold an Cyprus bank account?

This apply for all companies in Cyprus whatever their turnover.

 

[negon]

This apply for all companies in Cyprus whatever their turnover.

So you don't think Seychelles, Belize and so forth is covered by this protection?

 

[JohnSeed]

I asked an accountant in Cyprus. This apply for all companies also offshore corps that hold an account in Cyprus!!

 

[donald bathe]

I asked an accountant in Cyprus. This apply for all companies also offshore corps that hold an account in Cyprus!!

is this for a limited time only or for the foreseeable future? does anyone know? rsvp

 

[negon]

This apply for a long time I'm sure. But no one knows what the next step is they take to make it all even more complicated.

 

[JohnSeed]

With all the changes lately my personal believing is that this apply for the next 1 or 2 years and then everything will change again. I'm sure from now on they will try to change the International regulations until it fits in the plans to stop money laundering in big scale. People need to relay on crypto currency in the future to hide their money.

 

[donald bathe]

With all the changes lately my personal believing is that this apply for the next 1 or 2 years and then everything will change again. I'm sure from now on they will try to change the International regulations until it fits in the plans to stop money laundering in big scale. People need to relay on crypto currency in the future to hide their money.

if someone lives in el salvador or another third world country and they decide to deposit their money into cyprus or some other jurisdiction similar in nature, how would this be the united states business or anyone else? rsvp

 

[JohnSeed]

Well living in el salvador let me believe that you don't have to comply to fatca so nothing will happen. Then again if you have the money in an Cyprus bank account that is owned by a Seychelles corp. nothing will properly happen.

 

[Iem]

Fascinating that such a meaningful loophole has been authored-in. I'm assuming that this is unique to the Cyprus legal system (i.e. a local law, not the OECD's clauses).

 

[appman]

There is also another category for active: "the NFE is not yet operating a business and has no prior operating history, but is investing capital into assets with the intent to operate a business other than that of a FI, provided that the NFE does not qualify for this exception after the date that is 24 months after the date of the initial organisation of the NFE"

So that seems to mean that if you are just starting out, you are "active" for 24 months.

 

[Iem]

There is also another category for active: "the NFE is not yet operating a business and has no prior operating history, but is investing capital into assets with the intent to operate a business other than that of a FI, provided that the NFE does not qualify for this exception after the date that is 24 months after the date of the initial organisation of the NFE"

So that seems to mean that if you are just starting out, you are "active" for 24 months.

Yep that's how it sounds, as long as during this 24 months you are (a) actively spending money on assets for the company, and (b) not preparing to operate as a financial institution.