Is Cyprus the best option for my business?

[manager]

I am an EU resident. My business is internet marketing, with non-EU customers. I do not need VAT. I am not interested in offshore countries like Seychelles. I want to earn money legally, without hiding my name. Purpose of the company: pay less taxes, no tax avoidance stuff, and I want to be able to spend and invest the money I earn, legally in my country of residence (it's an EU country but not Cyprus).

1. Is the tax 12,5% now? Is it the same for any amount? For example for $100k or $1 million do you still pay 12,5% or do you also need to pay something extra like VAT (which I don't need)?
   
2. Can I register the company in my own name, without nominee director? I have nothing to hide, I just want to pay less taxes.
   
3. What about paypal? Can I open a PP account with my Cyprus company, taking into consideration that I am not a Cyprus resident, but I need a Cyprus PP account?
   
4. Is Cyprus the best option for me? I don't want to move from my country of residence.
   
5. Is there anything else I should take into consideration?
   

 

[Zqq]

1. There may be allowances I'm not familiar with, but 12.5% is flat.


2. Yes, of course.


3. As far as I know, they don't make a difference between resident and non-resident, but make check with themt o be sure.


4. Maybe.


5. Yes, the fact that you need to consider the risk of double taxation.


Paying 12.5% in Cyprus might end up costing you more if you have to pay tax for it again in your country of residence. Just as a hypothetical example, it might be smarter to go for a UK company, pay 23% tax, but utilize a DTA to pay a lower tax rate in the end.

 

[manager]

Paying 12.5% in Cyprus might end up costing you more if you have to pay tax for it again in your country of residence. Just as a hypothetical example, it might be smarter to go for a UK company, pay 23% tax, but utilize a DTA to pay a lower tax rate in the end.

@zqq: first of all thanks for your answers. Why do you say that UK would be better then Cyprus? Both have double taxation treaties with other EU countries so why would be UK better then Cyprus?


Forgot these questions:


6. If I am resident in another EU country then Cyprus, wouldn't that make me liable of taxation within my country of residence?


7. VAT is optional right? I do not need to register for it if I don't need it.

 

[Zqq]

@zqq: first of all thanks for your answers. Why do you say that UK would be better then Cyprus? Both have double taxation treaties with other EU countries so why would be UK better then Cyprus?

I did not. I tried to make it very clear that it was just as a hypothetical example.


UK has about 60+ more DTAs than Cyprus, though.

Forgot one question:
6. If I am resident in another EU country then Cyprus, wouldn't that make me liable of taxation within my country of residence?

Consult an accountant or other qualified professional for accurate advice pertaining to your jurisdiction. Generally speaking, though, most EU countries will tax you on any income (profit, dividends - anything) irrespective of the source (EU or non-EU) of these funds. That is why DTAs are so important for transparent, international trade.

 

[JohnLocke]

The key is that the management and control of the company is in Cyprus and that the business is actually taking place in Cyprus, so you will be liable for Cyprus tax if your country has a Double Tax Treaty in place with Cyprus. That's the whole idea

 

[manager]

@Admin


1) What do I need to prove that the management and control is in Cyprus?


2) How much would that cost?


3) Do I have to pay VAT after a certain threshold? How much?