Cyprus SaaS company + CFD trading company funds

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Hello everyone, I am planning on moving myself and my business(close + reopen) to Cyprus by the end of the year which does the following:
  1. Build algorithmic trading software/technology,
  2. Offer SaaS products to business and individuals, (no financial services, purely software)
  3. Use company algo tech to trade own company funds (CFDs) for additional income.
    • Potential use IPBox to reduce corp tax as the tech is proprietary (which undergoes R&D continuously with costs) ?
I have checked out all the topics regarding Cyprus on this forum, so I think this is the right move (I'm not considering UAE at this time).

One thing is not clear is what is the current 2023 way for Non-EU (UK citizen) to relocate to Cyprus? Considering my situation:
  • Don't want to buy property (will rent)
  • Have Masters level university degree
  • Sufficient capital for many years to live in Cyprus.

Could the experienced members @CyprusBusiness @CyprusLawyer101 of the forum please advise if I'm am missing something or my assumptions about Cyprus are incorrect?

I'm not thinking of anything fancy, just pay myself a salary, then pay the rest as dividends, but primarily looking to reinvest capital for growth.
On personal investment side, I have a portfolio of ETFs that I rotate every 5 weeks or so, so I am assuming any gains there would be 0% personal tax.
I'm also assuming that I would not need any financial licences as I will not be managing any outside capital.

Thanks in advance and please PM me if you could suggest service providers for relocation/company formation.

Cheers
 

bamboozlethemall

bamboozlethemall
Mentor Group Gold
BANNED MEMBER
Hello everyone, I am planning on moving myself and my business(close + reopen) to Cyprus by the end of the year which does the following:
  1. Build algorithmic trading software/technology,
  2. Offer SaaS products to business and individuals, (no financial services, purely software)
  3. Use company algo tech to trade own company funds (CFDs) for additional income.
    • Potential use IPBox to reduce corp tax as the tech is proprietary (which undergoes R&D continuously with costs) ?
I have checked out all the topics regarding Cyprus on this forum, so I think this is the right move (I'm not considering UAE at this time).

One thing is not clear is what is the current 2023 way for Non-EU (UK citizen) to relocate to Cyprus? Considering my situation:
  • Don't want to buy property (will rent)
  • Have Masters level university degree
  • Sufficient capital for many years to live in Cyprus.

Could the experienced members @CyprusBusiness @CyprusLawyer101 of the forum please advise if I'm am missing something or my assumptions about Cyprus are incorrect?

I'm not thinking of anything fancy, just pay myself a salary, then pay the rest as dividends, but primarily looking to reinvest capital for growth.
On personal investment side, I have a portfolio of ETFs that I rotate every 5 weeks or so, so I am assuming any gains there would be 0% personal tax.
I'm also assuming that I would not need any financial licences as I will not be managing any outside capital.

Thanks in advance and please PM me if you could suggest service providers for relocation/company formation.

Cheers
What about trading in UAE- you can do that I can introduce you to the CFD guys here if you like. As far as I understand zero taxes in Cyprus are for personal individual trading and not for business.And if you still want to invest then a Cyprus Hedge Fund is also good if you may like.
 
What about trading in UAE- you can do that I can introduce you to the CFD guys here if you like. As far as I understand zero taxes in Cyprus are for personal individual trading and not for business.And if you still want to invest then a Cyprus Hedge Fund is also good if you may like.
Thanks, I'll take a look at the Cyprus Hedge Fund!
I have a few friends that moved out to Dubai to trade and they are loving it, I'm always interested in UAE but I think when the scale is a lot bigger! I appreciate that you would introduce me to your CFD guys but unfortunately my partner is leaning towards Cyprus for the near future.
 

bamboozlethemall

bamboozlethemall
Mentor Group Gold
BANNED MEMBER
Thanks, I'll take a look at the Cyprus Hedge Fund!
I have a few friends that moved out to Dubai to trade and they are loving it, I'm always interested in UAE but I think when the scale is a lot bigger! I appreciate that you would introduce me to your CFD guys but unfortunately my partner is leaning towards Cyprus for the near future.
Fine DM me for further discussion. Cyprus company taxes would be 12.5% maybe that may change your partner's thinking.
 

CyprusBusiness

International tax advisor | Blockchain | Fintech
Mentor Group Gold
Hello everyone, I am planning on moving myself and my business(close + reopen) to Cyprus by the end of the year which does the following:
  1. Build algorithmic trading software/technology,
  2. Offer SaaS products to business and individuals, (no financial services, purely software)
  3. Use company algo tech to trade own company funds (CFDs) for additional income.
    • Potential use IPBox to reduce corp tax as the tech is proprietary (which undergoes R&D continuously with costs) ?
I have checked out all the topics regarding Cyprus on this forum, so I think this is the right move (I'm not considering UAE at this time).

One thing is not clear is what is the current 2023 way for Non-EU (UK citizen) to relocate to Cyprus? Considering my situation:
  • Don't want to buy property (will rent)
  • Have Masters level university degree
  • Sufficient capital for many years to live in Cyprus.

Could the experienced members @CyprusBusiness @CyprusLawyer101 of the forum please advise if I'm am missing something or my assumptions about Cyprus are incorrect?

I'm not thinking of anything fancy, just pay myself a salary, then pay the rest as dividends, but primarily looking to reinvest capital for growth.
On personal investment side, I have a portfolio of ETFs that I rotate every 5 weeks or so, so I am assuming any gains there would be 0% personal tax.
I'm also assuming that I would not need any financial licences as I will not be managing any outside capital.

Thanks in advance and please PM me if you could suggest service providers for relocation/company formation.

Cheers

The algo trading platform will most probably qualify as a qualifying asset under the IP Box Regime but correct structuring should be performed to achieve this successfully, i.e. performing some R&D activity under the Cyprus company with contractual arrangments in place for the software development.

Please note that Qualifying assets under the new regime include:

• patents,
• copyrighted software programs, and
• other intangible assets that are non-obvious, useful and novel.

Qualifying assets do not include trademarks and copyrights.

For the SaaS business model a 2.5% corproation will apply. Also VAT matters will need to be discussed specifically for B2C operations as the place of supply is usually where the consumer lies.

In addition, a Cyprus setup still offers a good tax optimisation vehicle and there are other tax incentives you can use to minimise tax liability such as notional interest deduction on new Equity.

Finally, for the activitties in trading in own funds Cyprus has again a lucrative tax benefit as gains on trading financial instruments is tax free (only FOREX and crypto are taxable). Also dividend income on company level is tax free.

The process to setup a company and have everything running is quite easy and we can assist with this task.
 
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You'll be fine getting your residency in Cyprus by renting somewhere and proving savings. I'm non-EU and it was pretty easy.
Thanks for sharing, were you able to do all the paperwork/process once you arrived in Cyprus, or did you have to apply and complete all the forms in your previous country?

The algo trading platform will most probably qualify as a qualifying asset under the IP Box Regime but correct structuring should be performed to achieve this successfully, i.e. performing some R&D activity under the Cyprus company with contractual arrangments in place for the software development.

Please note that Qualifying assets under the new regime include:

• patents,
• copyrighted software programs, and
• other intangible assets that are non-obvious, useful and novel.

Qualifying assets do not include trademarks and copyrights.

For the SaaS business model a 2.5% corproation will apply. Also VAT matters will need to be discussed specifically for B2C operations as the place of supply is usually where the consumer lies.

In addition, a Cyprus setup still offers a good tax optimisation vehicle and there are other tax incentives you can use to minimise tax liability such as notional interest deduction on new Equity.

Finally, for the activitties in trading in own funds Cyprus has again a lucrative tax benefit as gains on trading financial instruments is tax free (only FOREX and crypto are taxable). Also dividend income on company level is tax free.

The process to setup a company and have everything running is quite easy and we can assist with this task.
Thank you very much for the detailed breakdown and confirmation.

Could you please advise if the income generated from the company trading CFDs with its own capital by using the algo trading technology in the IP Box regime will also attract 2.5% corporation tax?

Regarding VAT - will be primarily EU and USA located clients - but Stripe will automatically account for the VAT burden.

Regarding Additional Tax Incentives - I have read recently the 50% exemption on salary above 55k outlined below:

New article 8(23A) As from 1 January 2022, 50% of the remuneration of employees, whose first employment in Cyprus began from 1 January 2022 onwards, is exempt from income tax for a period of 17 years, provided that their remuneration per year exceeds €55,000

Have you had any experience with any of your clients going for this?

Cheers
 
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CyprusBusiness

International tax advisor | Blockchain | Fintech
Mentor Group Gold
Thanks for sharing, were you able to do all the paperwork/process once you arrived in Cyprus, or did you have to apply and complete all the forms in your previous country?
Thank you very much for the detailed breakdown and confirmation.

Could you please advise if the income generated from the company trading CFDs with its own capital by using the algo trading technology in the IP Box regime will also attract 2.5% corporation tax?
The Company will operate two trading activities (1) SaaS - subject to 2.5% effective tax rate (2) Trading in financial instruments/CFDs - tax exempt (unless underlying instrument is Forex)
Regarding VAT - will be primarily EU and USA located clients - but Stripe will automatically account for the VAT burden.

Regarding Additional Tax Incentives - I have read recently the 50% exemption on salary above 55k outlined below:

New article 8(23A) As from 1 January 2022, 50% of the remuneration of employees, whose first employment in Cyprus began from 1 January 2022 onwards, is exempt from income tax for a period of 17 years, provided that their remuneration per year exceeds €55,000

Have you had any experience with any of your clients going for this?
Yes this is correct but it concerns employees. You, being the owner of the company will receive tax free dividends (only 2.65% NHS will apply with a cap at 180k income) and therefore the 50% tax incentive will not be required.
 

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