Case study: Optimisation through business relocation to Cyprus
Case study: Optimisation through business relocation to Cyprus
Overview and Relevance
In an increasingly globalized world, businesses face complex regulations and compliance requirements. Especially for international operations, companies must ensure that their financial transactions are seamless and compliant with the law.
In this case study, we examine the challenges faced by a long-standing client who managed their business through an international business company. Due to stricter regulations and compliance requirements, they were compelled to rethink their business structure.
We illustrate how relocating the business to Cyprus provided an effective solution.
Challenges and Initial Situation
Our client, a long-standing entrepreneur with a successful international business company, faced increasing challenges. The stricter regulations and compliance requirements of banks, particularly in EU countries, led to frequent questioning or outright rejection of their invoices.
Additionally, reliable payment service providers were hard to find, complicating international transfers.
While online banks generally function well within the EU, they often reach their limits with international transfers. Payments to China, the UAE, or the USA were frequently held up and scrutinized by the banks’ compliance teams, resulting in significant delays. This situation severely impacted the company’s growth and efficiency.
Solution: Relocating to Cyprus
To address these challenges, our client sought a new solution. After extensive discussions and a detailed analysis of the options, the client decided to relocate their business to Cyprus.
Malta was quickly ruled out due to its requirement of a minimum 183-day stay to become a tax resident, whereas Cyprus only requires 60 days. Cyprus also offers more straightforward procedures and more attractive tax conditions.
Tax Benefits in Cyprus
Cyprus offers numerous tax advantages for companies. The corporate tax rate is 12.5%, one of the lowest in the EU. Additionally, there are extensive double taxation treaties that facilitate international business activities. Companies can receive dividends, interest, and royalties virtually tax-free.
These benefits made Cyprus an ideal choice for our client.
Compliance and Regulations
Compliance with international regulations is a critical factor for the success of global businesses. Cyprus has stringent yet transparent rules that enable companies to operate securely and legally.
The straightforward and efficient handling of compliance requirements in Cyprus was another critical factor that convinced our client.
Personal Residence and Tax ID
Another important consideration was the client’s personal residence. Banks and online banks increasingly require an individual tax ID to facilitate international transactions. In Cyprus, one can achieve tax residency after just 60 days, allowing our client to quickly and efficiently obtain the necessary tax ID.
Implementation of the Relocation
The relocation to Cyprus was implemented in several steps. First, the company’s legal structure was adjusted to comply with Cypriot law. Next, the necessary tax registrations were completed. Our client received support in finding suitable business premises and meeting the residency requirements.
Success Factors
- Detailed planning and advice from our expert team
- Transparent communication with the relevant authorities in Cyprus
- Efficient execution of legal and tax adjustments
- Support in fulfilling personal residency requirements
Benefits of the New Structure
- Improved acceptance of invoices and smoother international transactions
- Access to reliable payment service providers
- Attractive tax conditions and extensive double taxation treaties
- Efficient compliance with regulatory requirements
- Quick and easy acquisition of a personal tax ID
These advantages significantly contributed to the stabilization and growth of the company. The client was able to fully resume their international business activities efficiently.
Conclusion
This case study demonstrates that strategically relocating the business structure to Cyprus can be an effective solution for the challenges of international business. Cyprus offers attractive tax conditions and efficient handling of compliance requirements and international transactions.
Suppose you want to learn more about optimizing your business structure by relocating to Cyprus. In that case, you should consult professional advisors or contact us to make an informed decision and take advantage of the numerous opportunities in this dynamic market.
