If you want to operate as an entrepreneur in the EU with a VAT number, you will find an excellent opportunity to reduce your costs in a corporation such as Cyprus Ltd. Because Cyprus offers great advantages for entrepreneurs compared to other EU jurisdictions. With a Cyprus Limited the tax rate is only 12.5% and distributed dividends are even income tax free if you have the Non Dom status. The costs for foundation, administration and bureaucracy are also kept within reasonable limits. Here in a nutshell are some of the advantages of moving your business to Cyprus:
– 12.5% Corporate income tax
– No trade tax
– Dividends and thus profit distributions from Cyprus Ltd. are tax free due to the Non Dom status (only 2.65% for statutory health care)
– if the managing director’s salary is less than €19,500, this is also income tax-free
– the possibility of deducting business expenses (flights, hospitality, office equipment, overnight stays) are manifold
– no advance tax payments
– also anonymity can be enabled
– a bank account for Cyprus Ltd. is easy to open at many banks also with credit card, online banking, multi-currency accounts and deposit insurance
– only 1.000,- EUR minimum share capital, which does not have to be paid in
– simple and inexpensive management
– To benefit from the advantages of tax residency in Cyprus, you only need to be in the country for 60 days a year.
However, for those who do not plan to live in Cyprus, there might be a cheaper option. The Cyprus Limited Partnership, as it exists in other countries such as the USA, is completely tax exempt unless you are tax resident in Cyprus. As with a US LLC, the income of the Cyprus LP is taxed in the tax residence of the beneficial owner. Who lives in a country with the tax territorial principle can collect his income completely tax free.
However, we recommend the USA LLC (Limited Liability Company) for most start-up projects, as there is virtually no bureaucracy and no accounting obligation there. For entrepreneurs who are not liable to pay taxes anywhere as perpetual travelers or digital nomads, a tax-free life can thus be led here as well. Since there is no accounting obligation, there are no costs for tax advisors and annual financial statements. A limited liability company in the U.S. can be formed and deregistered inexpensively in a matter of days. Also, a US LLC can facilitate emigration to the US.
Our partner pixel.AG will be happy to advise and support you to ensure the best possible setup for your start-up project.
