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Cyprus company director salary

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glengoolie

BANNED MEMBER
It seems Cyprus does not have a minimum wage laws, so I wonder if it is possible for the company director to have 0€ salary, hence he and the company would pay no healthcare tax, no social insurance fund tax, no redundancy fund tax, no industrial training fund tax, no social cohesion fund tax and so on...?

Also, can director perform actual work for the company, beside the basic duties defined by the law, under his employment agreement?

I calculated that if the company would pay a salary of 1000€, it would actually cost the company 1149€ and the employer would net 890€, so 259€ a month, or 3108€ a year, would be wasted money(it is not about the amount, it is about the principle). And I don't like wasting money, hence why I am interested in the possibility of 0€ salary, or a symbolic salary of 1€ maybe, whilst being able to do some actual work for the company as the director and not be bothered by these taxes or government breathing on my neck.

(essentially the company is merely a means to transform income into tax-free dividend. there would be no employees, just me)
 

CyprusLaw

Mentor Group Gold
It seems Cyprus does not have a minimum wage laws, so I wonder if it is possible for the company director to have 0€ salary, hence he and the company would pay no healthcare tax, no social insurance fund tax, no redundancy fund tax, no industrial training fund tax, no social cohesion fund tax and so on...?

Also, can director perform actual work for the company, beside the basic duties defined by the law, under his employment agreement?

I calculated that if the company would pay a salary of 1000€, it would actually cost the company 1149€ and the employer would net 890€, so 259€ a month, or 3108€ a year, would be wasted money(it is not about the amount, it is about the principle). And I don't like wasting money, hence why I am interested in the possibility of 0€ salary, or a symbolic salary of 1€ maybe, whilst being able to do some actual work for the company as the director and not be bothered by these taxes or government breathing on my neck.

(essentially the company is merely a means to transform income into tax-free dividend. there would be no employees, just me)
As you mention there is no statutory minimum wage in Cyprus. A director can be registered as an employee of the company and be paid salary and paying GHS and social insurance, but this is not required. He can carry out any duties afforded to him by the Articles of Association of the Company, he can also work as an employee of the company.

Depending on your country of residence there are situations where in order to get the relevant permit you would be required to show that you are employed in Cyprus, you can put a salary of 200-300 EURO just to evidence such employment.
 

glengoolie

BANNED MEMBER
"but this is not required. He can carry out any duties afforded to him by the Articles of Association of the Company"

usually when work is performed without some type of a contract and a payment, it is considered illegal. that's why in EU(some?) you cannot have one-man company, do the work on its behalf and just bill for it without paying yourself for the actual work. some people do it but it is completely illegal. since cyprus companies are joint equity companies and not "classic" llc, is this the reason director can work for free and therefore have no income/gesy/social?
 

CyprusLaw

Mentor Group Gold
"but this is not required. He can carry out any duties afforded to him by the Articles of Association of the Company"

usually when work is performed without some type of a contract and a payment, it is considered illegal. that's why in EU(some?) you cannot have one-man company, do the work on its behalf and just bill for it without paying yourself for the actual work. some people do it but it is completely illegal. since cyprus companies are joint equity companies and not "classic" llc, is this the reason director can work for free and therefore have no income/gesy/social?
Yes one member companies (with one director, secretary etc) are allowed in Cyprus and therefore there is no issue. As long as the duties carried out by the director fall within the articles of association of the company. If they do not, this might create other issues, for example breach of fiduciary duties etc.

I cannot comment about other jurisdictions and how they work, however, I know that common law countries are identical and/or similar to Cyprus.
 

Lawyer101

New member
There is no requirement to employ the director nor any illegality in doing work and not recieving salary.

Will you be residing in Cyprus ? If not you could also get salary without the social insurance etc requirements.
 
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