Cyprus

Frequently Asked Questions

Frequently Asked Questions with Answers
stions Answered

Q: Why Buy in Cyprus, hasn`t the bubble burst ?
A: All types of property in Cyprus, in particular Pafos, has been a very good investment
     over the past 15 years and prices are still on an upward trend, with approximately
     10% - 15% increases this year, so buying in Cyprus is still a very good investment.

Q: What pitfalls are there. What should my first steps be ?
A: Pitfalls happen when you do not follow the correct procedures and someone will
     take advantage of you. What your first steps should be once you have located your
     holiday or dream retirement home is to ask around in the same local area. Ask
     residents questions of the developer, did everything happen as you had hoped, have
     experienced any problems with planning, architect or the builder. Then if all is still
     right with what you are planning, get yourself a good lawyer and again ask around for
     advice / recommendations on what others have experienced and then go for it.

Q: Why do people expatriate ?
A: For various reasons. Some people expatriate purely for financial reasons, or because
    of displeasure with government policies in their home country, while others are
    obliged to leave their country of residence by the nature of their job, or the service
    that they provide. The duration of the overseas stay, the destination and surrounding
    circumstances can differ greatly, but the uniting factor is that in the majority of cases
    being an expat can be financially advantageous as well as culturally enriching.

Q: What is an offshore company, and do I need one ?
A: If you are going to work in a country which wants to tax your world-wide income, or if
    you are going to return to your home country to a world-wide taxation regime (quite
    likely) then an offshore company may be worth considering.
    This is another complex area in which professional help is needed, but the
    interpolation of a company can sometimes distance you from your income
    sufficiently to reduce or avoid taxation. In some countries there are plenty of rules to
    prevent this; but not in all, by any means.
    An offshore company can take many different forms, some of which are not of
    interest to the individual expatriate investor. However, if you have a large and diverse
    investment portfolio, or provide a professional service (for example consultancy in the
    engineering or finance industry), then this type of structure may be of interest to you.
    If you are engaged in providing a personal or professional service, you may be able to
    achieve considerable tax savings by setting up a 'personal service company'. You
    can contract to supply the service regardless of residence, and the fees earned can
    accumulate offshore while you work for a low salary in the country where you are
    taxed. It only works in some countries, and you may have to do something more
    complicated than just owning the company yourself, if it is not to be 'looked through'
    by the taxman.
    There are, of course, many other types of offshore company that can be formed to
    deal with the needs of large corporations, or expats with very specific needs, i.e.
    globetrotting entertainers or sportsmen.

Q: What is meant by the terms 'domicile' and 'resident' ?
A: 'Domicile' normally relates to the country or state which an individual regards as their
    permanent/ultimate home location. A person's domicile is established at birth and
    this remains until an individual resettles with the firm intention of remaining in that
    new location.
    'Residence' is normally determined by an individual's status at a particular time. The
    rules vary from country to country, but in many cases presence in a country for more
    than 183 days in any one year is enough to constitute residence for tax.

Q: What is money-laundering ?
A: The conversion of 'illegal' money into 'legal' money. Thus, a drug-runner who walks
    into a Caribbean bank with $1m, opens an account, and the next day transfers the
    money into a Swiss bank account where he invests it into Nestle shares has
    'laundered' the money successfully. Nowadays banks are much more careful about
    accepting large sums of unaccountable cash.

Q: What is a double taxation treaty ?
A: An agreement between two countries intended to relieve persons who would
    otherwise be subject to tax in both countries from being taxed twice in respect of the
    same transactions or events. By and large, most offshore jurisdictions do not have
    double taxation treaties, since they don't have much local taxation. Offshore
    jurisdictions which do have double tax treaties usually cannot use them to benefit
    investors receiving complete local tax exemption.

If you have a question relating to buying property and moving to Cyprus and it is not listed here, please e`mail us your question. We will find out the answer, send it to you and also list here.

E`Mail: chsp@cytanet.com.cy



Website Index Home Page Villas to Rent Villas for Sale New Build Plans Brochure Request Terms & Conditions Car Rentals Flights into Cyprus Restaurants Guest Book History of Cyprus Tourist Information Links FAQ About Us Contact Us Photo Gallery		Frequently Asked Questions Frequently Asked Questions with Answers stions Answered Q: Why Buy in Cyprus, hasn`t the bubble burst ? A: All types of property in Cyprus, in particular Pafos, has been a very good investment over the past 15 years and prices are still on an upward trend, with approximately 10% - 15% increases this year, so buying in Cyprus is still a very good investment. Q: What pitfalls are there. What should my first steps be ? A: Pitfalls happen when you do not follow the correct procedures and someone will take advantage of you. What your first steps should be once you have located your holiday or dream retirement home is to ask around in the same local area. Ask residents questions of the developer, did everything happen as you had hoped, have experienced any problems with planning, architect or the builder. Then if all is still right with what you are planning, get yourself a good lawyer and again ask around for advice / recommendations on what others have experienced and then go for it. Q: Why do people expatriate ? A: For various reasons. Some people expatriate purely for financial reasons, or because of displeasure with government policies in their home country, while others are obliged to leave their country of residence by the nature of their job, or the service that they provide. The duration of the overseas stay, the destination and surrounding circumstances can differ greatly, but the uniting factor is that in the majority of cases being an expat can be financially advantageous as well as culturally enriching. Q: What is an offshore company, and do I need one ? A: If you are going to work in a country which wants to tax your world-wide income, or if you are going to return to your home country to a world-wide taxation regime (quite likely) then an offshore company may be worth considering. This is another complex area in which professional help is needed, but the interpolation of a company can sometimes distance you from your income sufficiently to reduce or avoid taxation. In some countries there are plenty of rules to prevent this; but not in all, by any means. An offshore company can take many different forms, some of which are not of interest to the individual expatriate investor. However, if you have a large and diverse investment portfolio, or provide a professional service (for example consultancy in the engineering or finance industry), then this type of structure may be of interest to you. If you are engaged in providing a personal or professional service, you may be able to achieve considerable tax savings by setting up a 'personal service company'. You can contract to supply the service regardless of residence, and the fees earned can accumulate offshore while you work for a low salary in the country where you are taxed. It only works in some countries, and you may have to do something more complicated than just owning the company yourself, if it is not to be 'looked through' by the taxman. There are, of course, many other types of offshore company that can be formed to deal with the needs of large corporations, or expats with very specific needs, i.e. globetrotting entertainers or sportsmen. Q: What is meant by the terms 'domicile' and 'resident' ? A: 'Domicile' normally relates to the country or state which an individual regards as their permanent/ultimate home location. A person's domicile is established at birth and this remains until an individual resettles with the firm intention of remaining in that new location. 'Residence' is normally determined by an individual's status at a particular time. The rules vary from country to country, but in many cases presence in a country for more than 183 days in any one year is enough to constitute residence for tax. Q: What is money-laundering ? A: The conversion of 'illegal' money into 'legal' money. Thus, a drug-runner who walks into a Caribbean bank with $1m, opens an account, and the next day transfers the money into a Swiss bank account where he invests it into Nestle shares has 'laundered' the money successfully. Nowadays banks are much more careful about accepting large sums of unaccountable cash. Q: What is a double taxation treaty ? A: An agreement between two countries intended to relieve persons who would otherwise be subject to tax in both countries from being taxed twice in respect of the same transactions or events. By and large, most offshore jurisdictions do not have double taxation treaties, since they don't have much local taxation. Offshore jurisdictions which do have double tax treaties usually cannot use them to benefit investors receiving complete local tax exemption. If you have a question relating to buying property and moving to Cyprus and it is not listed here, please e`mail us your question. We will find out the answer, send it to you and also list here. E`Mail: chsp@cytanet.com.cy