Moving to Cyprus – Is the HK offshore structure still viable? What are the real risks?

[jiejq]

Hi everyone,
I'm thinking about moving to Cyprus because I want to live in a sunny place by the beach. I run a 7-figure online business and I'm trying to understand the best way to structure things for taxes while living there.

I’ve heard that some people use a Hong Kong company with a nominee director, claim it as offshore, and pay 0% on dividends (just the 2.65% GHS contribution up to €180k). Is this still a viable and safe option?

Do the Cypriot tax authorities actually enforce the management and control test? Or do they generally not investigate where the company is really controlled from?

Would it be better to just set up a Cyprus company and pay the 12.5% corporate tax? Or maybe do both , have a clean Cyprus company and send part of the billing through an offshore one?

Also, if Cyprus considers that the offshore company is actually tax resident in Cyprus because I live there and manage it from there , what exactly are the fines and criminal consequences, if any? I know I'd have to pay back taxes, but I’d like to understand what kind of penalties I could face (percentages, amounts, or legal risks).

If anyone here is in a similar situation or knows more about this, I’d love to hear your thoughts. Thanks!

 

[alley]

Would it be better to just set up a Cyprus company and pay the 12.5% corporate tax? Or maybe do both , have a clean Cyprus company and send part of the billing through an offshore one?

Personally, I would prefer to set up a local company in Cyprus and just pay the required tax, simply to have peace of mind and something to show, if needed. You never know when you might want to finance a house, a car, or move to another country where you’ll need to document your income from the past couple of years.

That way, you can still have a Hong Kong company or any other structure alongside it, giving you a bit more flexibility in how you route income through the Cyprus entity.