Cypriot non-dom with UK Ltd

(Bert VD) #1

Hi everyone! I’m looking into moving to Cyprus as a sole trader with non-dom status and I’m currently working out the details. My sources of income are webdesign and trading cryptocurrency and I’m thinking about using an UK Ltd to receive my profits in dividends.

Since I have no experience with an Ltd, many questions arise! I hope you can answer some of them:

  • When I have a UK Ltd but live in Cyprus (non resident in UK) I don’t have to pay social security or corporate tax in the UK, correct?
  • When I have UK customers, I do have to pay tax on those profits, correct?
  • Can I pay ALL profits from the UK Ltd to myself in dividends or do I need to pay myself a wage too?
  • The full accounting for the Ltd would happen in the UK, correct?
  • I will also need an accountant in Cyprus for the amount I invoice the Ltd as a sole trader, correct?
  • The UK does not impose taxes on outgoing dividends, correct?

Thanks in advance!


(Mike) #2

why don’t you set up a CY Ltd for your business?
You get aroung paying taxes and Soc Sec in the UK and of course VAT free transactions on corp site.


(Bert VD) #3

The only way to get my profits tax free is in dividends from a company abroad. If I had a CY Ltd, I would have to pay taxes there.


(Riccardo Tacconi) #4

Consult a Cypriot accountant to be 100% sure do not rely on forums. Capital gains are not taxed in Cyprus so it is a good place to stay for traders. Regarding web design, with a local limited company, you will have to pay a corporate tax, which is 12.5%, one of the lower in the EU. Do not use a UK LTD because you will have to pay 20% of corporate tax! With a UK LLP, if the money is not UK sourced (not coming from UK customers), you will not pay taxes, it is like a Delaware LLC, it is a transparent entity for tax purposes. If your customers are from UK, you should use another jurisdiction, with 0% corporate tax, like Isle of Man, Gibraltar or others with a bad reputation like Seychelles.

Any dividend is taken out for the company is taxable in Cyrpus. You can take the money out and declare it as personal income or invoice as sole-trader. You will always need an accountant is Cyprus.

Remember that, your UK company will be controlled from Cyprus, and you should pay Cyprus corporate tax defeating the idea of having a UK company. To avoid to have a company controlled from Cyprus you will need another shareholder in another country, or just use a Cyprus company and be 100% compliant.

It is not as easy as you thought, sorry.