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Is Cyprus suitable for adult business?

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aquatone

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Jun 10, 2024
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#1
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Hello,

I am an e-s-c-o-r-t directory owner serving in South America and some European countries.

In addition to this we will also target Arab countries.

When I searched the forum about cyprus (old topics) I saw that it could be ideal for my business, but I'm not sure.

60% of our income comes in cryptocurrency. I want to tax it. I found a place based in the Netherlands for credit card payment.

We have an annual income of 6 figures.

What do you think is the best country for this kind of sector? I am looking for a low tax rate, a country that does not share company ownership information, where this sector is legal.

Are there any reliable consulting companies in Cyprus where I can get consultancy for company opening?

What kind of solution can you suggest?

Thanks.
 
#3
From my perspective:

I am convinced that the core problem you must solve is not where to incorporate but where to bank; and for crypto, how to do accounting (of course, both problems are related to the country of incorporation, especially the latter one).
An annual income of 6 figures is good; but unfortunately it's not too much to convince a majority of banks that onboarding you is worth all the risks connected.

I agree that Cyprus can be a possible option (especially when @CyprusLawyer101 as an insider confirms it ;) ) but you really won't find the bank there, IMO. I'm not sure about some EMIs with high-risk appetite, they exist; at the very least, I think that you can go for Cosmopayments and/or Yoursafe, they are OK with adult industry.
As being not an accounting expert, I don't know how it is with crypto and accounting at Cyprus.

Some more ideas:

Various US states do not share company ownership information (or it is possible to manage it); but in many, an adult business is not welcome (not necessarily illegal but this is enough). Florida, Nevada, probably New York are OK with this. If you do not do US business you are not taxed on the federal level and state taxes are bearable or zero. Banking e.g. in Florida (or even Nevada) is pretty doable.
BEWARE: I presume you are aware that you will not hide the company ownership information from banks unless playing illegal game – nowhere.
Again, no clue how it is with a crypto accounting in the US.

Many LatAm countries are OK with the adult business and the company ownership information is not shared, at least not publicly to anyone and/or over the internet. But banking, especially international payments, can become a problem in your case.

Also South-East Asia comes to my mind but I am very little oriented there.

Re: consultancy, I am aware about one-two clever guys that can help you in the US, one of them already working with the adult industry; I can direct you there, eventually. Yet in such a case be prepared to show that you are playing fair game; it seems that you do – but the adult industry can be a very dirty game connected to forced labour, drugs, trade with women etc., they do not touch this even with a meter pole. No such contacts (I mean willing to work with an adult industry subject) in LatAm (not even mentioning SE Asia), though.
 
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#5
Plenty of people in the adult industry in Cyprus. As suggested above, I would bank abroad, however for payment processing, there are some processors even in CY (Limassol) that would probably work with you, that specifically focus on adult/high risk.
 
#6
There are TONS of adult companies in Cyprus because of their IP box stuff. With that said, with what you are doing you need to base in a country where profiting from the facilitation of prostitution is legal. It is not in Cyprus.
 
#7
cionide said:
With that said, with what you are doing you need to base in a country where profiting from the facilitation of prostitution is legal.
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Certainly. (Or at least, somehow in greyzone and widely accepted.)

cionide said:
It is not in Cyprus.
Click to expand...
It can change the game, of course. @CyprusLawyer101, can you comment? (No personal interests, just curious :) )
 
#8
You may check your competitors if they have a Cyprus company for their business activity, if so you can replicate the setup.
 
#9
Forester said:
Certainly. (Or at least, somehow in greyzone and widely accepted.)


It can change the game, of course. @CyprusLawyer101, can you comment? (No personal interests, just curious :) )
Click to expand...
My understanding is that if you maintain an escort database/directory and you are not actually engaged as a party to any transaction, but merely recieving a fee for listing someone on a directory you do not fall foul of any legislation. Of course I never checked it formally, so there might be something I am missing.
 
#10
CyprusLawyer101 said:
My understanding is that if you maintain an escort database/directory and you are not actually engaged as a party to any transaction, but merely recieving a fee for listing someone on a directory you do not fall foul of any legislation. Of course I never checked it formally, so there might be something I am missing.
Click to expand...
I cannot speak for Cyprus specifically but when these laws were written in most countries there was no such thing as escorting websites. In theory, you are right. In practice, a prosecutor might interpret that any "help" you provide to a prostitute that earns you money constitutes profiting from facilitation. It's a gray area that isn't so cut and dry as something like that is obviously facilitation like acting as an agent for the prostitute by answering phone calls and scheduling her appointments. You might get in trouble from an escorting site, you might not, but there's always the possibility that you will have to spend a ton of money on lawyers and live through a nightmare (and i'm sure you know how slowly that s**t moves, so it lasts a long time). Even if you are ultimately cleared of charges - the stress of the situation will destroy your business, family and life. I have some experience with this that I can't get into...

It's safer to do this in a country where brothels and facilitation are legal, like Germany or Switzerland.
 
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#11
What you are saying is valid. I would say though that the definition of providing advertising services does make a difference, however I do agree that there is an increased risk in getting into trouble. A highly important factor probably would be where the actual service takes place. If it takes place in a jurisdiction where escorting is legal, then the company's place of incorporation becomes of a secondary importance in terms of the legality of the operation in the country of incorporation.
 
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#12
CyprusLawyer101 said:
What you are saying is valid. I would say though that the definition of providing advertising services does make a difference, however I do agree that there is an increased risk in getting into trouble. A highly important factor probably would be where the actual service takes place. If it takes place in a jurisdiction where escorting is legal, then the company's place of incorporation becomes of a secondary importance in terms of the legality of the operation in the country of incorporation.
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There are a dozen reasons it's legal and one that it might be illegal, but if you get some ambitious prosecutor that wants something in his CV - it's still a couple of years of hell, having equipment seized and searched, your privacy violated, and all sorts of stress. Better to just do it where it's written black on white that it's legal.
 
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#14
luap said:
Bazaraki, one of the most popular CY websites has a category for this and they don't seem to have any issues
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There has to be both profiting and prostitution for it to be illegal, bazaraki has free ads (this is of course within the extreme interpretation that an escort site is profiting from facilitation)
 
#15
cionide said:
I cannot speak for Cyprus specifically but when these laws were written in most countries there was no such thing as escorting websites. In theory, you are right. In practice, a prosecutor might interpret that any "help" you provide to a prostitute that earns you money constitutes profiting from facilitation. It's a gray area that isn't so cut and dry as something like that is obviously facilitation like acting as an agent for the prostitute by answering phone calls and scheduling her appointments. You might get in trouble from an escorting site, you might not, but there's always the possibility that you will have to spend a ton of money on lawyers and live through a nightmare (and i'm sure you know how slowly that s**t moves, so it lasts a long time). Even if you are ultimately cleared of charges - the stress of the situation will destroy your business, family and life. I have some experience with this that I can't get into...

It's safer to do this in a country where brothels and facilitation are legal, like Germany or Switzerland.
Click to expand...
Yes it's true running escort site is not risk free, biggest escort website in Poland was closed by prosecutor and the founder was sentenced to 1 year in prison and had to return 2.3 million $
the crime was "facilitating prostitution and deriving financial benefits from it"
 
#16
12345 said:
Yes it's true running escort site is not risk free, biggest escort website in Poland was closed by prosecutor and the founder was sentenced to 1 year in prison and had to return 2.3 million $
the crime was "facilitating prostitution and deriving financial benefits from it"
Click to expand...
This is incorrect, i know the story you are talking about. The news story went on some site and was echo'd by other sites and it turned out to be complete fiction and was retracted by most of the news sites that posted it. No one was able to find any actual court document about it, and on roksa.pl they posted it was fake.

In the end, the roksa.pl guy will be found innocent. He ran the business as legal LLC for 15 years, normally paying taxes so it's not like he was hiding. On top of that, pretty much every case regarding brothels, prostitution, facilitation etc all said something about "put ads on roksa.pl" so the website passed through the desks of hundreds of police, prosecutors and judges and no one found a crime there for that 15 years. The government will have to pay him a mountain of money in damages for closing his site, but it will take him 20 years to get that money.
 
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#17
CyprusLawyer101 said:
What you are saying is valid. I would say though that the definition of providing advertising services does make a difference, however I do agree that there is an increased risk in getting into trouble. A highly important factor probably would be where the actual service takes place. If it takes place in a jurisdiction where escorting is legal, then the company's place of incorporation becomes of a secondary importance in terms of the legality of the operation in the country of incorporation.
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How will you convince the police in Cyprus about that if it comes so far?
 
#20
clemens said:
exactly! a website means not that the escort service take place in France
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If the service takes place in France, where i believe escort services are legal, then it is not a matter of Cyprus police which is expected to enforce the law within the territory of the republic of Cyprus. If there is any illegal act at this level an investigation must be initiated by the Cyprus general attorney's office or some for of electronic crime unit. In such case it would be a question of applying the letter of the law, which I doubt that it has a prohibition on a company providing escort services abroad, and even a more remote possibility that it has a prohibition for providing advertising space to foreing based individuals for the provision of escort services abroad. Obviously the above statements are made purely on an assumptive basis as I have never examined this particular matter. The intention of my comment is merely to describe the line of thought I would take when assessing risks and potential troubles in advising a client, which I understand is also the intention of your question.
 
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