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Cyprus tax optimization for stock, crypto traders?

Matade

Matade

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Jul 16, 2024
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#1
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If you have non-dom in Cyprus which voids SDC 19% tax obligation, how does that apply to cryptocurrency sales or trading and stock, options sales or trading?

What is the best structure to setup in Cyprus for Cyprus non-dom resident to optimize tax for trading activities both in stocks and in cryptocurrencies?
 
#3
tradecys said:
You can trade under a Cyprus company and pay 12.5% taxes on it (which is not too bad) or trade under an 0% tax offshore company and pay yourself dividends from it. Now dividends are tax free in Cyprus. But this needs a solid setup so contact a lawyer.
Click to expand...
This won't work with the "0% tax offshore company " .
In accordance with the Corporate Income Tax Law, a company is considered to be a tax resident of Cyprus if its management and control are exercised in Cyprus.
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#5
ilke said:
Well...

It's not legal but the law is not currently enforced. It is done by a large number of residents in Cyprus, that is not to say it is recommended or it won't be enforced later on. But it's not a priority for them at the moment.
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Yeah that's true , but it's just a matter of time with the Eu pressuring Cyprus . https://www.reuters.com/world/europ...l-failing-implement-corporate-tax-2024-10-03/ ( I know it's only for multinational companies but it's just the beginning)
Especially if you are founding a new company, I’m not sure if it’s the best decision (but that’s just my opinion and my judgement)
 
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#6
aniglo22 said:
Yeah that's true , but it's just a matter of time with the Eu pressuring Cyprus . https://www.reuters.com/world/europ...l-failing-implement-corporate-tax-2024-10-03/ ( I know it's only for multinational companies but it's just the beginning)
Especially if you are founding a new company, I’m not sure if it’s the best decision (but that’s just my opinion and my judgement)
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You can trade under a Cyprus company.

Stock trading is non-taxable in Cyprus. With crypto the situation is slightly different but still a Cyprus company is an optimal solution. I have PMd you.
 
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#7
So if it's mostly stocks & options it's better to do it under your own name, no company? It shouldnt be taxable if it's stocks & options traded on recognized exchanges like the NYSE, right?

Do you pay GESY on capital gains?
 
#11
I understand you're living in Cyprus as a non-dom, which is great. Regardless, I believe you can establish a Cyprus company. Here's the idea: you create or develop a proprietary algorithm for your trading methods, register it as software, and capitalize it as intellectual property (IP) with tangible proof of its value.

The company then uses this IP to trade, and all revenue generated through it is taxed at just 2.5% in Cyprus. Instead of distributing dividends, you can retain the earnings within the company after paying corporate tax. Alternatively, you could set up a holding company on top, for example, in the UK, where dividends would be distributed tax-free to that entity and then to you personally in a tax-efficient way as a non-dom. However, keep in mind that this could trigger management and control considerations, potentially requiring additional economic substance, which might increase costs depending on your income level.

Let me know if you need further clarification—happy to help!
 
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#12
nurredon said:
The company then uses this IP to trade, and all revenue generated through it is taxed at just 2.5% in Cyprus. Instead of distributing dividends, you can retain the earnings within the company after paying corporate tax. Alternatively, you could set up a holding company on top, for example,
Click to expand...
In this case the corporate tax as you say is 2,5% only ?
 
#16
1. No, you don't need to be a resident.
2. Yes, You need to make the tool with some programmers. Maybe Upwork can help. I don't think "Metatrader" or things like that would work. You need to develop *actual* IP if you don't want to get a fine if you get an audit.
 
#17
nurredon said:
2. Yes, You need to make the tool with some programmers. Maybe Upwork can help. I don't think "Metatrader" or things like that would work. You need to develop *actual* IP if you don't want to get a fine if you get an audit.
Click to expand...
Why not? You can write complex things there too or use an API and continue in python.
 
#19
In Cyprus, non-doms don’t pay the 19% SDC tax on income like dividends, interest, or rental income, and crypto and stock trading gains are generally tax-free for non-doms. To optimize tax for trading, setting up a Cyprus International Business Company (IBC) or a private company is often the best structure. This keeps trading profits separate from personal income and benefits from Cyprus' low corporate tax rate (12.5%). Always check with a local tax advisor for tailored advice!
 
#20
nurredon said:
The company then uses this IP to trade, and all revenue generated through it is taxed at just 2.5% in Cyprus
Click to expand...
That IP is not as easy to acquire actually. It isn't as easy as you make it out to be unless I'm missing something
 
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