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Cyprus Vs Isle of Man

proexper

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May 17, 2020
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First I want to let clear I was searching a way to work in EU on the best conditions (like all stupi#21), but primary goal is setup an structure who work legally in the most convenience way to myself, optimizing taxes and wealth safety. So if someone have experience working in Man or both, please bring some light.

After many hours researching I don't see the point to work from Cyprus instead of Man, unless your a going to setup Holding or similar structure. (not taking on account the Brexit issue, because its uncertain how its gonna end, maybe after still is a good way to trade with EU, not sure if will be better or worst, the time let us know).

Let's say I research for physical goods and services, Import-Export business looks even better&faster dealing from Man (up to now, after brexit...), gambling, banking too, etc... in theory they also are pro-crypto.


let's compare:

- Setup cost&Maintenance: more or less EQUAL.​
- Privacy: not sure but look better from Man's, in Cyprus since March nominee setup as the usual way, will not work, must be real structure, real office, real director (not running 1000 companies),... This point doesn't care to much to me, but maybe is interesting for others.​
- Dividends: 0% Man Vs 12.5% Cy (trading have special treatment)​
Not withholding tax in both cases and If you choose setup Man and become "Special resident in Cyprus" can get for 0% your dividend, so win-win and clean-clean. From Cyprus I read about from some people who moves up to 70% of the money to offshore before yearly taxing with invoices, so get 3,75%, but at minimum is grey line.​
- Vat: 0% Man* Vs 19% Cy (Both EU vat)​
I read some of you make it work some business avoiding Vat, but not legal way. Don't know is if too risky, maybe for servicies B2C is ok, but B2B or phisical goods...​
*not sure if this is real or still apply.​
- Accounting: no much info of Man costs, but Cy is far from easy and cheap, if you move a few invoices monthly is ok, if not... $$$​
- Banking: no idea from Man, but CY not easy, usually needs and introducer, banks require see you and a bunch info of company, referencies,... and neither cheap on fees.​


This post try to treat on a general way to get info valid for all, personal circumstances may vary the final results.

Everybody opinions are welcome, so don't be shy!!
Cheers
 
What agent have you found for Isle of Man ? The ones I’ve looked at was always quite expensive.
You should look at the new substance requirements for IOM companies and see how that would affect you.
VAT should be the same as for a CY company if you want to be legal.

Another cheaper alternative to IOM is Gibraltar.

IOM was never a EU member so brexit shouldn’t change much, excerpt that a IOM company can register for UK VAT which will no longer be EU vat. However for physical goods it doesn’t matter as the VAT follows the goods.
 
No agent yet, just gathering info for sometime, before post.
I didn't find the "new substance" but I'll search more.
There are many pressure over Gibraltar, better wait after brexit, looks more risky than IOM
 
I am still learning about low tax structure and as we talked in Estonia topic I ended up reading Isle of Man and Estonia DTT which contains this part:

"Dividends paid by a company which is a resident of a Party to a resident of the other Party and beneficially owned by that resident of the other Party shall be taxable only in that other Party."

I dont have enought experience so I need help to understand this quote.

If I am an estonian tax resident person, does it applicable to get divident tax free from my IOM copmany? If not could you wrote an example with dummy parties name, please?

thank you
 
I've used a Transferwise account for my Cyprus company from day one.

Cyprus banks charge much higher fees, and from what I've been told by my accountant, they can also e.g. pause payments until evidence is provided that a dividend has been declared. After seeing my experience, he's started recommending to other clients to use Transferwise.

That said: Transferwise did challenge me once to explain the source of funds for an incoming transaction, but I sent through some details and they allowed it through.
 
I've used a Transferwise account for my Cyprus company from day one.

Cyprus banks charge much higher fees, and from what I've been told by my accountant, they can also e.g. pause payments until evidence is provided that a dividend has been declared. After seeing my experience, he's started recommending to other clients to use Transferwise.

That said: Transferwise did challenge me once to explain the source of funds for an incoming transaction, but I sent through some details and they allowed it through.
Agreed, and I understand that all the reasons for which a Cyprus bank account might have been useful -- coordination with certain merchants like Stripe and FDA, VAT refunds, etc. -- are no longer true. But happy to be corrected if I'm wrong.
 
Understood, but why do you want a Cyprus-based bank account if it's optional? Their banking history is not so illustrious.
I have many friends banking in Cyprus. It has been stable for them regardless what you read anywhere! I have seen them using BoC and also Piraeus Bank in the past, everything stable.
 
Why IoM? Is it some arbitrary choice? And what's the connection to EU. Your entire post doesn't make much sense. You are taxed based on where you are RESIDENT, it doesn't matter where you incorporate.
Also apparently IoM Registrar doesn't just accept any company, they are very picky in which companies they allow to be registered there.
 
Thank you for your respond. I did not know that. I picked IOM to my shortlist, bc there is 0% cit and 0% wht and it has connection to EU thrugh UK. (but it maybe going to change after brexit).
I am planning to start travelling. If I am right, in this cas I have the rights to choose my personal tax residency. (based on local laws, it can be done based on address only and there is no 183 days rule). So I keep my profit in iom company, and because there are no audit, I can borrow/spend companies money, than pay back. After my personal residency changed I can pay myself dividens on low/zero tax.

Am I miss something?
 

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