1. Assuming you’re an EU national, you will have no problem coming and setting up a company in Cyprus;
2. Setting up a company in Cyprus is quite easy and it costs €2,000 plus 19% VAT.
3. Opening a
bank account for the company will cost €800 plus 19% VAT.
4. You will be employed by your company and you will be paying Cyprus social insurance. Assuming that you will be employed at minimum salary i.e €850 per month, the company and yourself will be paying approximately €200 per month for contributions/deductions in the Social insurance and other funds of the Republic of Cyprus (including health fund).
5. Assuming that the €100,000 turnover is your net profit before your salary, this will leave the company with an approximate €90,000 profit before tax. This will be taxed at 12.5% i.e €11,250 tax. The remaining €78,750 is available to be paid to you from the company as
dividends.
6. As you are not of Cypriot origin, you will not be paying tax on dividends for the next 18 years.
7. There are 2 ways of becoming a Cyprus tax resident: a) the 183 day rule, where if you stay 183 days in Cyprus in any year you are considered as Cyprus tax resident, and b) the 60 day rule, where if you stay in Cyprus for 60 days AND you are employed by a
Cyprus company AND you have a permanent residence in Cyprus AND you earn enough to live in Cyprus, AND you did not stay anywhere else for more than 183 days in the same year…then you will be considered as Cyprus tax resident.