Tax haven vs low tax

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joachimssj

New member
Hi, I am of course not talking about tax fraud. In your opinion, what is most relevant to have your sources of income from tax havens or to pay taxes at a relatively low rate? For example someone who lives in Cyprus is taxed at 0% on dividends from Cypriot or foreign company but a Cypriot company will pay 12.5% tax. Is it better to have a company in a 0% tax jurisdiction (like Singapore, Hong Kong, Dubai, Cayman Islands, etc.) and getits dividends at 0% but risk being often blocked to reinvest its capital elsewhere? EU in particular (I don't know at all how blocking it can be). Or simply create a company in the country which is not considered a tax haven, pay relatively low taxes (12.5%) and be completely free of its movement of capital. Having little experience your opinions and experiences interests me because a professional will always risk giving me a point of view that will go in the direction of his interests.
 

Sols

Staff member
Mentor Group Gold
It’s a personal choice you need to make where you assess the risks and weigh the pros against the cons.

Cyprus is full of people with offshore companies that if ever questioned or looked at likely would be deemed tax resident in Cyprus and the owners would therefor owe back taxes.

The reality thus far is that the tax authority in Cyprus hasn’t acted yet.

But if you want peace of mind and if you want to be able to show in the future that your source of wealth is legitimate, declared, and taxed, it can be beneficial to have paid the 12.5%. It also gives you piece of mind in that your structure is lawful and not at risk if the tax authority changes it mind about ignoring wealthy foreigner’s offshore companies.
 

joachimssj

New member
It’s a personal choice you need to make where you assess the risks and weigh the pros against the cons.

Cyprus is full of people with offshore companies that if ever questioned or looked at likely would be deemed tax resident in Cyprus and the owners would therefor owe back taxes.

The reality thus far is that the tax authority in Cyprus hasn’t acted yet.

But if you want peace of mind and if you want to be able to show in the future that your source of wealth is legitimate, declared, and taxed, it can be beneficial to have paid the 12.5%. It also gives you piece of mind in that your structure is lawful and not at risk if the tax authority changes it mind about ignoring wealthy foreigner’s offshore companies.
I do not understand well, I am talking about a foreign company which has international activity. To have a foreign company as long as it is not hidden from the tax authorities is not a tax evasion as far as I know?
 

JustAnotherNomad

Entrepreneur
If you manage the company from Cyprus, it's a local company. I don't know why people always think that they don't have to pay taxes, just because they don't sell to local customers.
Then again, a lot of people get away with that in Cyprus, unlike in other countries.
 

joachimssj

New member
If you manage the company from Cyprus, it's a local company. I don't know why people always think that they don't have to pay taxes, just because they don't sell to local customers.
Then again, a lot of people get away with that in Cyprus, unlike in other countries.
Do you have an official text about that? There is a rule about months? For example if you stay more than 2 months in Cyprus, it's a local company
 

JustAnotherNomad

Entrepreneur

joachimssj

New member
Some guidance:

Etc.
Thanks, it's very clear, if I am the sole owner of the company and live in Cyprus, my company is Cypriot tax resident. So my question was badly asked.

In your opinion, what is most relevant to have your sources of income from tax havens or to pay taxes at a relatively low rate? For example living in Cyprus which is not a tax haven and having your company taxed at 12.5% or living in a tax haven such as UAE and paying no tax but running the risk of having problems using the funds in outside the country to invest in real estate in the EU for example
 

startfleetio

Mentor Group Gold
You won't have problems if you really live in UAE.
Thanks, it's very clear, if I am the sole owner of the company and live in Cyprus, my company is Cypriot tax resident. So my question was badly asked.

In your opinion, what is most relevant to have your sources of income from tax havens or to pay taxes at a relatively low rate? For example living in Cyprus which is not a tax haven and having your company taxed at 12.5% or living in a tax haven such as UAE and paying no tax but running the risk of having problems using the funds in outside the country to invest in real estate in the EU for example
 

blizz

Mentor Group Gold
Why not, because you don't pay tax in the USA ?
 

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