Question Dividends as non dom in cyprus

[CyprusBusiness]

I inquired with the GESY service in Cyprus regarding using to the public health system, and they informed me that as a resident paying GHS tax, I still will not get access to the health service until I've acquired permanent residency status in addition to paying the social insurance.

Can I PM you?

 

[luap]

Su

Can I PM you?

Sure, go ahead

 

[FixieHartmann]

You do not need to be an employee. Sure, it's a way to take out around 19,000 EUR/year from the company without paying income tax and lowering the company's taxable base. But what most expats moving to Cyprus to set up a one-person company do is just pay the 12.50% corporate income tax and then pay the remainder as dividends, which for you as a non-domicile resident are tax free. Of your dividends, you have to pay 2.65% Gesy. This is capped at 4,770 EUR/year so if pay yourself more than 180,000 EUR per year in dividends, there is no further Gesy tax.

This website has pretty good calculators: Cyprus Tax Calculators - Easy, Quick and Accurate - MyCyprusTax©

Are there any downside of *not* being an employee of your own company?

 

[Sols]

Are there any downside of *not* being an employee of your own company?

You don't get access to the national health system. Some people get private health insurance (usually an international health insurance), others pay themselves a symbolic salary to qualify. Some go without any health coverage at all.

I've heard people run into some issues with the local banks when taking out loans, if they can't demonstrate social insurance contributions. AFAIK, the banks can usually be convinced upon seeing proof of stable dividends payments.

Haven't heard of any other issues.

That's if you're a one-person business. If there are multiple people, the authorities may find it suspicious if everyone is a consultant and not an employee. If you're going to build up a team in Cyprus, consider hiring them as employees. Payroll taxes are surprisingly high in Cyprus, so take that into account.

 

[karishi]

You don't get access to the national health system. Some people get private health insurance (usually an international health insurance), others pay themselves a symbolic salary to qualify. Some go without any health coverage at all.

Would you really want to use the NHS in Cyprus?You can get a health insurance with 1.000 Euro excess for outpatione at around 1.700 euro, which is the first thing you should have in every country you live, EU countries included.
In general I always assume that you want to setup something like a cyprus company or a simple UAE residency if you are making at least 6 figure sums, if you are making 60 to 80k and want to live as a digital Nomad, as long as you exit your home country correctly, you can probably survive with an EMI and nobody will bother you. I mean between setup costs, travel, rentals and stuff like that it's probably better to find a place where you would actually want to live and try to optimize tax there.

 

[zaybxc]

You don't get access to the national health system. Some people get private health insurance (usually an international health insurance), others pay themselves a symbolic salary to qualify. Some go without any health coverage at all.

Non-dom must stay only 60 days a year in Cyprus, so probably they already have international health insurances.

The other way around, is there any advantage in not being an employee of oneself limited company?

 

[Sols]

Non-dom must stay only 60 days a year in Cyprus, so probably they already have international health insurances.

That is not correct. You can stay every single day of the year in Cyprus for 17 years and be non-domicile.

The other way around, is there any advantage in not being an employee of oneself limited company?

Mostly less paperwork, no payroll taxes to worry about.

 

[zaybxc]

Mostly less paperwork, no payroll taxes to worry about.

Does it mean cheaper accountancy fees?

 

[Sols]

Does it mean cheaper accountancy fees?

Yes, slightly lower accounting costs and you don't have to budget for payroll taxes (social security contributions, personal income tax).

 

[RAGAV]

You don't get access to the national health system. Some people get private health insurance (usually an international health insurance), others pay themselves a symbolic salary to qualify. Some go without any health coverage at all.

I've heard people run into some issues with the local banks when taking out loans, if they can't demonstrate social insurance contributions. AFAIK, the banks can usually be convinced upon seeing proof of stable dividends payments.

Haven't heard of any other issues.

That's if you're a one-person business. If there are multiple people, the authorities may find it suspicious if everyone is a consultant and not an employee. If you're going to build up a team in Cyprus, consider hiring them as employees. Payroll taxes are surprisingly high in Cyprus, so take that into account.

I am an Indian citizen interested in getting a pink slip to move to Cyprus. It does not give me the right to work.

Can I start my own company in Cyprus (with myself as sole shareholder and director) and be actively involved in daily operations? Can I pay myself in dividends every year after corporate taxes are paid? Is this a violation of temporary resident permit rules?

I don't plan to hire any employees.

 

[Sols]

Can I start my own company in Cyprus (with myself as sole shareholder and director) and be actively involved in daily operations? Can I pay myself in dividends every year after corporate taxes are paid? Is this a violation of temporary resident permit rules?

There are some entrepreneurship visas that might be open to you. AFAIK, they have pretty hefty capital requirements. I'm not very well versed in the details. Would recommend speaking with a law firm that specialises in tax and immigration, such as https://neo.law/ or https://www.cyplaw.com/en/ or http://agplaw.com/

 

[CyprusLaw]

There are some entrepreneurship visas that might be open to you. AFAIK, they have pretty hefty capital requirements. I'm not very well versed in the details. Would recommend speaking with a law firm that specialises in tax and immigration, such as https://neo.law/ or https://www.cyplaw.com/en/ or http://agplaw.com/

The temporary residence permit restricts undertaking paid employment, but you are explicitly allowed to be a director in a company you are a shareholder in and to receive dividends.