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Cyprus non-dom tax residency + US LLC for internet business?
- Thread starter Researcher
- Start date
A lot of non-doms in Cyprus don't declare their offshore companies as tax resident in Cyprus (even though they probably are) and thereby don't pay the 12.50% corporate income tax. Cyprus isn't lifting any fingers to pursue non-doms at this point. That might change but probably not anytime soon.
Even so, many people opt for a Cyprus company because of ease when it comes to SOF/SOW declarations, because it's technically the right thing to do, because running an offshore company isn't quite as scalable in some cases, and so on.
Even so, many people opt for a Cyprus company because of ease when it comes to SOF/SOW declarations, because it's technically the right thing to do, because running an offshore company isn't quite as scalable in some cases, and so on.
A lot of things have changed unexpectedly, so it may be soon. The company can be unmanaged during person's 60 days stay in Cyprus, that's why tax office is skips these persons. It's very strange that no one has published a response from the tax office on this issue.
First time in Cyprus?
The tax office doesn't respond. They have never officially said to non-doms to keep not paying tax. They just prefer their frappe and smoke breaks over bothering mostly wealthy foreigners that bring value in other ways.
Welcome to Cyprus. Siga-siga.
Let's take two scenarios to illustrate the difference.
Scenario 1: you reside in Cyprus, have a company in Cyprus, and earn your income/wealth from that company. The company pays corporate income tax and there's the small GHS tax. No further tax is applicable if you take the profit out as dividends. Everything is completely above board and legal. You can show tax returns for the company and for yourself, which line up perfectly.
Scenario 2: you reside in Cyprus, have a company offshore, and earn your income/wealth from that company. The offshore company pays no tax anywhere. You are the sole director/shareholder. You don't pay tax on dividends the company pays you. You have committed tax evasion, which will become apparent to anyone looking at your SOF/SOW documentation.
It's mostly banks and payment processors that ask about it. They ask for it as proof that your funds have a clean and legitimate origin. Banks don't want dirty money anymore. At least not in the same way as they did 25–30 years ago.
Correct, except it's 12.50%.
Yes, that's an example. Another might be if you open a new account (without changing residence) or if your current back for some reason (randomly or mandatorily) performs repeat due diligence on your account.
In this case, do you mean that the LLC will have one member, which is the Cyprus company holding 100% of the shares? So when the LLC distributes profits to the Cyprus company, the Cyprus company will pay 12.5% tax on those profits.
I don't understand the question based on the context of the message you quoted/referred to. In that post, I was answering a question about who might conduct SOF/SOW checks.
Whatever it takes to prove that your source of funds is legitimate. Invoices, agreements, bank statements, tax returns, and so on.
They will not contact your customers, if they do, it would be the first time I have heard of that. Please let us know if they have done that.
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