Cyprus Non Dom Dividends from companies - Who should be manager?

[bigbite100]

Hello, with Cyprus Non Dom you can earn dividends from foreign companies with only 2,65% NHS contribution as only "cost". But the company shouldnt be in your own management. Many use trustee managers to reach the requirements.

What about family members? Can a brother/sister be manager of the company?

Bonus question:
Is there currently any country that makes a good Non Dom Setup with trustee or family members as managers?
In Singapore you have corporate tax, UAE added same recently, Seychelles banking possibilities and reputation is not good. Malta maybe? Or croatia?

Thank you.

 

[Sols]

No need to overcomplicate things. You can earn dividends from a local company, too, and only pay 2.65% NHS (capped at 4,800 EUR/year). The company pays 12.50% corporate income tax, though.

If you want to avoid that, you would technically need to establish genuine management and operations somewhere else. Your role should only be that of a passive shareholder. In reality, a simple nominee director is enough in most cases, as the Cypriot tax authority practically never checks.

Isle of Man and Gibraltar are pretty good options, with good banking available in many cases.

 

[calif89]

What I don't understand:

If you have a crypto trading LTD in Cyprus for example and you have yearly profits of 100k €... What part of that can be paid out as 0% tax dividends and what part of it for the 12.5%?

 

[Sols]

If you have a crypto trading LTD in Cyprus for example and you have yearly profits of 100k €... What part of that can be paid out as 0% tax dividends and what part of it for the 12.5%?

If you have a business that makes a profit of 100,000 EUR per year, you pay 12,500 EUR in corporate income tax (12.50%) and you can take the rest out as dividends for yourself. Out of those 87,500 EUR, you must pay NHS (GHS/Gesy) of 2.65%. The amount you pay in GHS is capped at 4,800 EUR/year.

But since you mention crypto trading specifically, it might be different. The above example is just generally speaking.

 

[bigbite100]

No need to overcomplicate things. You can earn dividends from a local company, too, and only pay 2.65% NHS (capped at 4,800 EUR/year). The company pays 12.50% corporate income tax, though.

If you want to avoid that, you would technically need to establish genuine management and operations somewhere else. Your role should only be that of a passive shareholder. In reality, a simple nominee director is enough in most cases, as the Cypriot tax authority practically never checks.

Isle of Man and Gibraltar are pretty good options, with good banking available in many cases.

thank you for the information. genunine management and operations somewhere else - would that be possible with a sister/brotherwho works from an office in a foreign country?

And regarding Isle of Man and Gibraltar- interesting, never thought of these. Do you have experience with these countries? And why specifically these 2 countries? Is it because they dont have corporate tax?

 

[Paul Tudor Jones]

If you want to avoid that, you would technically need to establish genuine management and operations somewhere else. Your role should only be that of a passive shareholder. In reality, a simple nominee director is enough in most cases, as the Cypriot tax authority practically never checks.

Do they even care if you have a nominee director- can't you just own the foreign company directly?

 

[Sols]

thank you for the information. genunine management and operations somewhere else - would that be possible with a sister/brotherwho works from an office in a foreign country?

If you were talking about another jurisdiction with an aggressive tax authority, I'd say no. But this is Cyprus, where the tax authority has a policy of prioritizing coffee breaks and chitchat over chasing wealthy foreigners who might be evading 12.50% corporate income tax.

And regarding Isle of Man and Gibraltar- interesting, never thought of these. Do you have experience with these countries? And why specifically these 2 countries? Is it because they dont have corporate tax?

Lots of experience and they are very popular jurisdiction. The popularity stems from the setup being day to day routine, it's the bread and butter of the corporate services industry there. Zero tax is of course another factor that makes them popular. Being a part of UK but more or less independent while using English legal system is something a lot of people like.

Do they even care if you have a nominee director- can't you just own the foreign company directly?

It's not about ownership, it's about day-to-day control. You don't want to make it too easy for them. Having a nominee director is trivial and non-intrusive for a lot of businesses, a small price to pay for being compliant enough on paper.

But you probably could skip the nominee and not be bothered in most cases.

 

[sergeylim88]

what kind of tax rate are we talking about with Isle of Man and Gibraltar?
is it territorial income tax for individual?

 

[Sols]

what kind of tax rate are we talking about with Isle of Man and Gibraltar?

Zero in Isle of Man.
12.50% territorial in Gibraltar.

 

[sergeylim88]

those are corporate taxes or personal income tax?

 

[Sols]

those are corporate taxes or personal income tax?

Corporate. Personal tax is irrelevant, unless you plan to live there.

If you do plan to live there, Gibraltar has a bunch of different programs with different tax brackets. A popular one is Category 2.

Isle of Man has a 20% tax rate on personal income. Income above 200,000 GBP is not taxed any further.

 

[sergeylim88]

what makes Isle of Man and Gibraltar better than Monaco (and are they better)?

 

[Sols]

what makes Isle of Man and Gibraltar better than Monaco (and are they better)?

Almost no French people in Isle of Man and slightly more but still very few in Gibraltar. You can't put a price on that.

From a tax perspective, they serve different purposes. Different solutions and different lifestyles. Monaco has no income tax, but you won't fit in (or be allowed to reside there) if you aren't worth a few million. Isle of Man and Gibraltar are more low-key.

 

[sergeylim88]

thank you for good information

 

[bigbite100]

Zero in Isle of Man.
12.50% territorial in Gibraltar.

thank you for the information. Since Gibraltar has 12,50% , there is no cost/tax benefit in comparison to just working with a CY company? Or is this a misunderstanding?

 

[Sols]

thank you for the information. Since Gibraltar has 12,50% , there is no cost/tax benefit in comparison to just working with a CY company? Or is this a misunderstanding?

Cyprus has 12.50% corporate tax on worldwide income, whereas Gibraltar has 12.50% territorial taxation (only income from within Gibraltar is taxed). So whether there's a difference depends on your specific use case.

 

[bigbite100]

Cyprus has 12.50% corporate tax on worldwide income, whereas Gibraltar has 12.50% territorial taxation (only income from within Gibraltar is taxed). So whether there's a difference depends on your specific use case.

Thank you - So if the Gibraltar company recieves money from a foreign company (Dubai Fzco, US LLC etc), the income is taxed 0% ?

 

[Marzio]

So if the Gibraltar company recieves money from a foreign company (Dubai Fzco, US LLC etc), the income is taxed 0% ?

"There is no charge to tax on the receipt by a Gibraltar company of dividends from any other company."

Gibraltar - Corporate - Income determination

Detailed description of income determination for corporate income tax purposes in Gibraltar

taxsummaries.pwc.com

 

[sergeylim88]

is it 0% tax on income company earns from lets say B2B or B2C from customers in the US, in Gibraltar?

 

[Marzio]

is it 0% tax on income company earns from lets say B2B or B2C from customers in the US, in Gibraltar?

Not if you manage the company from Gibraltar obviously.

Territorial taxation exempt taxes on income earned from work done outside the territory.