Best Setup For a Non-EU Daytrader Living In Cyprus?

[asgm]

Hi all - first off, thank you for all of the incredible info on this forum. It's truly incredible.

I'm scratching my head over what the optimum setup is for my situation, and would love some advice.

My situation:

I am a UK citizen, who has recently relocated to Cyprus with my wife. We have purchased a property (resale) with a value of €500k. Ideally, I would like to achieve non-dom tax residency (Cat F slow I believe). I am still a UK tax resident, with my 183 days coming up in April 2023 at which point I would like to switch to Cyprus residency. My wife is a dependent and does not work.

I receive dividends from the UK (c£70-100k per annum) as a NED and minority shareholder.

For my day-to-day 'keep myself busy' activity, I an active trader of equities/stocks using my IBKR private investor account, and want to know what the best way to structure my affairs is. I have a quote for a company setup, however, this seems pricey. It averages out to €850 per month (taking into consideration annual and monthly fees) with €3k of one-off setup costs. This seems fairly considerable for a part-time private investor.

If I trade privately, do I require all of this admin, or am I being sold services that I just don't need? Is there a threshold as to what is classed as 'for income'? I trade because I enjoy it, not because I have to, and so I have some flexibility to fall within the rules if required.

I've read so much conflicting info that my brain is just about fried. Apologies if this has been answered a million times - I have read almost every relevant post on this forum and I'm still unclear as to what the best solution is for me and my family is.

I have seen a few advisors/experts on Cyprus, and would welcome a conversation. Please email me at asgmin at proton dot me

 

[luap]

For a 500K property you should be fine getting the Cat F. I applied around 1 year ago and still no sign of any updates, it will likely be atleast another year before getting anything, but having a temporary residence in the meantime is very easy. Once you have your temporary residence you can apply for non-dom, you don't need to wait for Cat F.

You'll likely need the company in order to both obtain and renew your temporary residence, but 850 EUR per month is way too expensive. 3-3.5K setup and around 3K yearly to keep it running. Almost all Non-EU citizens here either are employed or need to run a company.

 

[asgm]

For a 500K property you should be fine getting the Cat F. I applied around 1 year ago and still no sign of any updates, it will likely be atleast another year before getting anything, but having a temporary residence in the meantime is very easy. Once you have your temporary residence you can apply for non-dom, you don't need to wait for Cat F.

You'll likely need the company in order to both obtain and renew your temporary residence, but 850 EUR per month is way too expensive. 3-3.5K setup and around 3K yearly to keep it running. Almost all Non-EU citizens here either are employed or need to run a company.

This is really helpful (and reassuring!), thank you. We are booked in for our immigration meeting in Jan, so will follow your advice here to keep things simple. Is Cat F worth anything in that case, or should I just ignore it?

Thanks also for the heads up on costs. Seemed expensive to me too - the monthlies were €565 p/m with annual parts coming in at €2,560.

 

[CyprusLaw]

Hi all - first off, thank you for all of the incredible info on this forum. It's truly incredible.

I'm scratching my head over what the optimum setup is for my situation, and would love some advice.

My situation:

I am a UK citizen, who has recently relocated to Cyprus with my wife. We have purchased a property (resale) with a value of €500k. Ideally, I would like to achieve non-dom tax residency (Cat F slow I believe). I am still a UK tax resident, with my 183 days coming up in April 2023 at which point I would like to switch to Cyprus residency. My wife is a dependent and does not work.

I receive dividends from the UK (c£70-100k per annum) as a NED and minority shareholder.

For my day-to-day 'keep myself busy' activity, I an active trader of equities/stocks using my IBKR private investor account, and want to know what the best way to structure my affairs is. I have a quote for a company setup, however, this seems pricey. It averages out to €850 per month (taking into consideration annual and monthly fees) with €3k of one-off setup costs. This seems fairly considerable for a part-time private investor.

If I trade privately, do I require all of this admin, or am I being sold services that I just don't need? Is there a threshold as to what is classed as 'for income'? I trade because I enjoy it, not because I have to, and so I have some flexibility to fall within the rules if required.

I've read so much conflicting info that my brain is just about fried. Apologies if this has been answered a million times - I have read almost every relevant post on this forum and I'm still unclear as to what the best solution is for me and my family is.

I have seen a few advisors/experts on Cyprus, and would welcome a conversation. Please email me at asgmin at proton dot me

Hi,

Just a few comments:

(a) The non-dom/tax residency are a separate matter from the Cat F which is the permanent residence permit. (i) The non-dom status is maintained for 17 years, (ii) to be a tax resident in Cyprus you can achieve this either through the 60-day rule or by staying for 183 days in Cyprus; (iii) Category F permit is the permanent residence permit, which is simply a permit allowing you to stay in Cyprus - it is not connected with your tax residency.

(b) Having in mind that you had paid 500,000 you should have applied for a fast track permanent residence permit, as the requirement is EURO 300,000.

(c) A lot of people are cost sensitive however, paying a quality advisor is more important than having a cheap advisor. As usually people you try to find the cheapest solution end up regretting it in the long run as they have a lot of issues, eg. the advisor is not properly qualified; limited skills, non-responsive etc. So my advice here would be to have quality as priority.

 

[luap]

Hi,

Just a few comments:

(a) The non-dom/tax residency are a separate matter from the Cat F which is the permanent residence permit. (i) The non-dom status is maintained for 17 years, (ii) to be a tax resident in Cyprus you can achieve this either through the 60-day rule or by staying for 183 days in Cyprus; (iii) Category F permit is the permanent residence permit, which is simply a permit allowing you to stay in Cyprus - it is not connected with your tax residency.

(b) Having in mind that you had paid 500,000 you should have applied for a fast track permanent residence permit, as the requirement is EURO 300,000.

(c) A lot of people are cost sensitive however, paying a quality advisor is more important than having a cheap advisor. As usually people you try to find the cheapest solution end up regretting it in the long run as they have a lot of issues, eg. the advisor is not properly qualified; limited skills, non-responsive etc. So my advice here would be to have quality as priority.

The property was resale, so OP wouldn't qualify for fast-track I believe.

I also agree that paying for quality is important, but spending a lot of money isn't the only factor, as one can pay a lot and also get bad service or pay less and get great service. Based on the prices shared above, and based on what I and others around me are paying, 10K per year to maintain residency and a close to dormant company, with some UK dividends and a little IBKR trading is excessive. I pay much less and get great service.

 

[GTA10]

Hey Luap,

I am an EU citizen, I moved to Cyprus on May 2022. If you wish, I can put you in contact with a my local tax consultant. He was referred to me by two of my Cypriot old pals, and he has been their lifelong family tax consultant. Prices are reasonable, little over 3k a year for maintenance, 1725€ incl VAT for incorporation.

Now, if you ever need to do some crazy s**t like complex transnational fiscal planning, he's definitely not the go-to man, but if you just receive dividends from the UK and have investment income with the CY Ltd, I guess he can cover all your basics. If you ever need some more advanced advice, you can always look for some other consultant with a deeper focus on the matter.

The only "problem" is that he's located in Nicosia, not a so popular location for expats. That actually makes all the difference, as in Larnaka and Limassol any consultant will charge a higher fee, due to the live expats market.

PM if interested, the referral comes free of charge

 

[asgm]

Thanks for your contributions all - after a very informative call with @CyprusLaw I am now confident that I can day trade in a private capacity and file a personal tax return, as opposed to needing a company structure. This is on the understanding that ALL profits from the disposal of equities is tax-exempt.

Thanks @CyprusLaw for your expert advice.

 

[CyprusLaw]

Thanks for your contributions all - after a very informative call with @CyprusLaw I am now confident that I can day trade in a private capacity and file a personal tax return, as opposed to needing a company structure. This is on the understanding that ALL profits from the disposal of equities is tax-exempt.

Thanks @CyprusLaw for your expert advice.

Hi, please note that you must have discussed this with CyprusLawyer or someone else. Please note that my personal view is that this advice is potentially wrong, as it is very important to assess the issue of social contributions on the basis of the badges of trade .

 

[FixieHartmann]

Hey Luap,

I am an EU citizen, I moved to Cyprus on May 2022. If you wish, I can put you in contact with a my local tax consultant. He was referred to me by two of my Cypriot old pals, and he has been their lifelong family tax consultant. Prices are reasonable, little over 3k a year for maintenance, 1725€ incl VAT for incorporation.

Now, if you ever need to do some crazy s**t like complex transnational fiscal planning, he's definitely not the go-to man, but if you just receive dividends from the UK and have investment income with the CY Ltd, I guess he can cover all your basics. If you ever need some more advanced advice, you can always look for some other consultant with a deeper focus on the matter.

The only "problem" is that he's located in Nicosia, not a so popular location for expats. That actually makes all the difference, as in Larnaka and Limassol any consultant will charge a higher fee, due to the live expats market.

PM if interested, the referral comes free of charge

I can't PM you (yet), but would be interested in the referral.

 

[asgm]

Hi, please note that you must have discussed this with CyprusLawyer or someone else. Please note that my personal view is that this advice is potentially wrong, as it is very important to assess the issue of social contributions on the basis of the badges of trade .

Sorry @CyprusLaw , this is my mistake. I had spoken to @CyprusLawyer101 who provided helpful information and was really happy to provide advice. The taxable element is clear, but I am continuing to look into things as it would seem I would be subject to social insurance contributions at 19.6%.