Is Cyprus company recognized as offshore company?

[jericho]

Have many questions:


1) Is Cyprus company recognized as offshore company?


2) I'm non EU resident will that change anything?


3) What is the most benefit I get from Cyprus company?


What is the reason for opening a Offshore company in Cyprus?

 

[JohnLocke]

First of all a Cyprus company is not considered to be a Offshore company but more like a low tax jurisdiction.


For non EU citizens it makes no differences in regards to the incorporation of a Cyprus company, however, if you have any concerns you will need to elaborate a little more!

3) What is the most benefit I get from Cyprus company?

Very broad question please explain further for instant what are your goals to achieve?

 

[undercover]

What I mean is how can I increase profits by incorporating the company in Cyprus?

 

[JohnLocke]

It depends very much on what your are selling, how your business structure looks like and how you incorporate the company in Cyprus.


For instant one way would be to incorporate the company as non resident (Offshore company) so the company will not be liable for any corporate tax, however, this will limit you in regards to VAT registration if that should be a whish of yours.

 

[Safa]

The tax savings and reduced VAT will be a great benefit from a competition point of view, it means if you are not too greedy you can lower your prices on the product or service sold.

 

[clemens]

How can this help to increase your business? You still need to pay tax and to charge VAT?

 

[EliasIT]

Pretty simple, while others have to charge up to 30% VAT for their services and products sold a Cyprus company only have to charge 15% VAT so guess where the customer will buy if the product is identical?

 

[alibran]

I'm also a bit confused about the financial benefits of incorporating in Cyprus as opposed to fully offshore. I know you can claim back the VAT you pay to your European suppliers with a Cyprus company, but if your company is outside the EU, your EU suppliers should be invoicing you at 0% VAT anyway.

 

[SysOp]

Well, what makes a Cyprus-based company more profitable, if trading within the EU, is that you can reclaim the VAT for goods bought, but as well you can sell your products with the EU's lowest VAT, namely, 15%!


Now, what EliasIT also tried to explain is that while your competitors have to charge the customer up to 30%, the Cyprus company can charge just 15%. That's a 15% discount 'out of the box' that a Cyprus company can offer their customers. Now for B2B it isn't very lucrative but for B2C it is!


Furthermore, besides the VAT, you have to look into the TAX, i.e. 10% corporate tax which again is the lowest in the entire European Union and the reason thousands of businesses worldwide incorporate in Cyprus! While your competitor in another EU country automatically will have much higher costs due to the higher corporate TAX of up to 28%, the Cyprus business has lower costs. This can increase your chances dramatically to sell more, at a lower price, while you still have the same net profit.


There are endless reasons for registering a Cyprus-based company if your activity is going to be in Europe!


The above are only two of the major reasons that you have to consider.


Why do something of doubtful legality when you can do it without complications - fully legally!

 

[system32]

You spin my head right round mg: I'm thinking of how to restructure my business I got some cool ideas..

 

[alibran]

OK, I understand you only have to charge your customers 15% VAT and you only have to pay 10% corporate tax, but why is this better than no VAT and no corporate tax?


I'm not trying to be difficult. I just don't get it.


How is locating your company in a tax free country that you don't live in any more questionably legal than locating your company in a low tax country that you don't live in?

 

[JohnLocke]

We speak 2 different things.... for people who actually want to go offshore with their business and don't care about VAT, TAX and reputation of the jurisdiction and the complications some offshore jurisdiction can bring a Cyprus company is not the way to go, if, the business needs to be situated in the European union for one reason or another then Cyprus is to prefer (like thousands other businesses have done this) because of the low tax and VAT - there is no one size fits all.


Hope it makes sense otherwise reply and I will try again

 

[MiltonStone]

I had to ask the same as alibran since it looks like we can avoid the VAT if we incorporate for instant in the Seychelles as we did and avoid to incorporate in Cyprus? I know it is too late for us but from an interest point of view it would be awesome with more information...

 

[JohnLocke]

I had to ask the same as alibran since it looks like we can avoid the VAT if we incorporate for instant in the Seychelles as we did and avoid to incorporate in Cyprus? I know it is too late for us but from an interest point of view it would be awesome with more information...

Sorry I don't get you, what do you want me to elaborate?

 

[jericho]

Thank you for the answers was very helpful. I have opened the bank account in Cyprus and relize the question to be answered and a little silly

 

[jericho]

I just read the article by ReadEye in the Cyprus forum and it makes sense... however, the question is how Cyprus will help you to come through the next financial recession in 2013 where the USA, Europe and Japan seems to get into HUGE problems? :angry: