Category Archives: Real Estate

5+2 Reasons why Lebanese Clients choose Cyprus!

5+2 reasons why Lebanese clients choose Cyprus!

Since the end of the Special Permission requirement for the Lebanese traveling to Cyprus, on the 1st of April 2021, the island has received a large influx of Lebanese individuals, families, and companies seeking a new home away from the current turmoil plaguing Lebanon’s economy and society.

Our firm has been advising and assisting Lebanese clients as they embark on shifting their residency and business activities to the robust economy of Cyprus.

Cyprus has strategically established itself as an attractive destination, both within the EU and globally, through its competitive, modern, and transparent legal, financial and regulatory framework. The country’s advantageous tax policy and strong banking system have made Cyprus attractive for all types of businesses and individuals.

Individuals and Families

Temporary Residence

  • Valid for 1 year & renewed yearly,
  • Holders are allowed to live in Cyprus as visitors without the right to work,
  • A spouse, children (under 18 years old), and parents (parents of the couple) are able to apply as dependents,
  • Eligible through renting or purchasing a property.

Permanent Residency (Normal Option) – click here 

  • Main applicants and qualifying dependents can apply and stay as permanent residents in Cyprus indefinitely,
  • Approval within 12 months,
  • The P.R. does not expire and the holder does not need to renew it,
  • Eligible through purchasing a property of ANY value.

Permanent Residency (Fast Track) – click here 

  • Main applicants and qualifying dependents can apply and stay as permanent residents in Cyprus indefinitely,
  • Approval within 2 months,
  • The P.R. does not expire and the holder does not need to renew it,
  • Eligible through purchasing investing at least €300,000 (excluding VAT) in one of the following options (a) residential properties (b) commercial properties (c) company share capital and (d) Cyprus investment funds,
  • Option (c) investing at least €300,000 (excluding VAT) in a company share capital gives the right to the main applicant to work in Cyprus,
  • All options give the right to applicants to be shareholders in Cyprus.

Personal or Joint Bank Account in a Cyprus bank 

  • Lebanese individuals, both residents, and non-residents are eligible to open a personal or joint bank account in Cyprus at one of the local banks our firm cooperates with.

Companies

Register a Cyprus Company

  • A company registered in Cyprus enjoys all the advantages of operating in an E.U. country
  • Registration of a Company is quick and easy for all Lebanese clients
  • A Cyprus company benefits from an advantageous 12.5% corporate tax (one of the lowest in Europe) on profits, with possibilities for further reductions in taxation
  • Shareholders benefit from no withholding tax on dividends paid to them (if non-residents)

Foreign Interest Company – click here

  • A Cyprus company with a majority of non-EU shareholders (over 51%) is eligible to employ up to 15 non-EU employees (including the shareholders themselves),
  • All 15 non-EU employees are able to work and live freely in Cyprus whilst they are employed for the Cyprus Company through receiving residency cards,
  • A direct deposit of capital amounting to at least €200.000, deposited into the Cyprus company’s bank account from abroad, is required to be eligible. This amount can then be used for company activities in Cyprus and abroad,
  • The company can also employ additional Specialists that have specific skills (click here for more info),
  • Family members (spouse, children, parents, and in-laws) of the Employees can also work and reside in Cyprus through family reunification,
  • The foreign interest company benefits from an advantageous 12.5% corporate tax (one of the lowest in Europe)

Corporate Bank Account for a Lebanese Company 

  • Lebanese companies are eligible to open a corporate bank account in Cyprus at one of the International Business Units that our firm cooperates with.

Our areas of work include: 

  • Real Estate acquisition or rental
  • Company Registration and Nominee Services
  • Investment Advice
  • Permanent and Temporary Residence Applications
  • Employment permits
  • Registration of foreign interest companies for the employment of Lebanese nationals in Cyprus
  • Visa Applications
  • Advice on all related tax aspects
  • Facilitating online bank facilities
  • Opening of personal and corporate bank accounts

6.2 Things to Know about the Newly Revamped Cyprus Fast-Track Permanent Residence – Regulation 6.2

THINGS TO KNOW ABOUT THE CYPRUS FAST-TRACK PERMANENT RESIDENCE

The Immigration Permit under Regulation 6.2 of the Aliens and Immigration Regulations, has always been considered the best avenue for non-European investors seeking an expedited immigration permit, that allows them to reside permanently in Cyprus.

One of the key benefits of this Immigration Permit, other than its expedition, is the ability for all the family to obtain the Permanent Residence, such as the married spouse, children under 18 years old, financially dependent children up to 25 years old (provided they are engaged in a tertiary education at the time), parents and in-laws.

On the 24th of March 2021, Regulation 6.2 got the revamp it needed, by introducing new investment options for applicants and the possibility for the main applicant to be a Director with a salary.

Here are the 6.2 Things to Know about the Newly Revamped Cyprus Fast-Track Permanent Residence – Regulation 6.2:

1. New Investment Options for Applicants

The previous Regulation 6.2 required applicants to invest in new residential properties that have a total purchase value of at least €300,000 (excluding VAT) – classified as Investment (A).

The newly improved Regulation now permits applicants the option of investing either with a:

  • Minimum investment of €300,000 (plus VAT if applicable) in commercial properties, including offices, shops, and hotel (NEW or RESALE), classified as Investment (B), 
  • Minimum investment of €300,000 in the share capital of a existing or a new Cyprus company having a physical presence and activities in Cyprus and employs at least 5 persons, classified as Investment (C), 
  • Minimum investment of €300,000 in compartments of Cyprus UCITS funds (AIF, AIFLNP, RAIF types), classified as Investment (D).

2. Time for a Return of Investment

Whilst the previous Regulation 6.2 focused mostly on the purchase of new real estate properties for residential purposes, the newly improved Regulation 6.2 aims to encourage and attract applicants that are seeking a Return on their Investment from the get-go.

The introduction of the new investment options (B), (C) and (D), will result in the Residence Permit becoming a lot more attractive and offer more value for applicants that are able to see their investments become fruitful from their first year of residency.

3. Time to depart from Pledging €30,000 in a Cyprus bank account

The previous Regulation 6.2 required applicants to pledge the amount of €30,000 for three years. Thew newly improved Regulation 6.2 has scrapped this requirement, making it more attractive to applicants that seek to utilize this amount of money on other matters.

4. Directorship with a salary and Shareholding

Investment (A), (C), (D): 

The newly revamped Regulation 6.2. continues to request applicants to declare that they do not intend undertake any sort of employment in Cyprus when investing in residential properties, commercial properties and UCITS.

Applicants and their spouses, can be shareholders in any other type Cyprus company, not associate with Investment (B) and receive dividends from the said company, however they cannot be employed with a salary.

Investment (B): 

However, Investment (B) allows for the main applicant (not the spouse) to be employed as a Director with a salary, in the company in which they choose to invest the minimum of investment of €300,000. This is an exception to the previous notion that no Permanent Resident holder is able to be employed in Cyprus. Furthermore, the main applicant can be included in the minimum number of employees that the company should have to be eligible for the Fast-Track process  (at least 5). This is will be widely seen as a great advantage and boost for the Fast-Track scheme’s popularity and for the main applicants, who will benefit from being more actively involved in their investment.

Applicants and their spouses, can also be shareholders in the company and receive dividends from the said company.

5. The rest of the procedure remains the same

  • The Main Applicant will continue to prove a secure annual income (including salaries from employment, pensions, dividends, fixed deposits, rentals) of at least €30,000,
  • Each dependent added to the application will require the proven annual income to be increased by €5,000 for every dependent person (spouse and children) and by €8.000 for every dependent parent or parent-in-law.
  • Income should derive from abroad in cases where the applicant invests in new residential units, however income can be generated from sources within Cyprus derived from the new investment options. The income of the applicant and the spouse can be taken into consideration.
  • The funds invested for Investments (A), (B), (C) and (D) should be transferred and emanate from abroad
  • The applicant and the spouse should provide a Clean Criminal Record from their country of residence.

6.2. Find the right investment and choose the right option 

The introduction of the new investment options allows investors to do ‘investment shopping’ , prior to investing the minimum €300,000, that fits their needs and objectives.

Our Team is able to provide various opportunities for applicants seeking a favourable return on their investment made for the Cyprus Permanent Residence – Fast Track Immigration Permit (Regulation 6.2).

Our Team also assists in all the requirements needed to be eligible and to apply for the Permanent Residency Regulation 6.2,  from the formation and registration of a company, Immigration Permit applications, purchase of property to the opening of bank accounts that may be needed to facilitate any of the above investment options a client may choose.

Contact us today for all information

Address: Faneromeni 106, Office 201, 6031, Larnaca, Cyprus

Telephone: +357 24 623 800   Fax: +357 24 332 991

Email: info@toulouraslaw.com

Website: www.toulouraslaw.com

Non-EU Citizens: Starting a new or second-home in Cyprus?

Non-EU Citizens: Starting a new or second-home in Cyprus?

With many neighbouring nations facing political and financial instability, it is no surprise that households are seeking a new or second home for their family. The past few months, the island has seen a high influx of Lebanese families and companies in search of a way-out from the current situation in Lebanon. Panayiotis Z. Toulouras LLC is able to assist clients from start to finish as they relocate or set up a second home here in neighbouring Cyprus.

Residency programs allow individuals to live freely and enter into Cyprus, as legally residing citizens of Cyprus, allow them to provide their children a high quality education and a safer way of life for the whole family. The programs allow individuals the opportunity to engage in a Cyprus business as a co-shareholder or the option of establishing a Cyprus Company as a sole shareholder. Individuals and companies in Cyprus are able to benefit from Cyprus’ tax advantages.

Two main types of Permanent Residency

  • Category 6.2 (Fast Track Permanent Residency)
  • Permanent Residency Category F (Normal Option)

A) Category 6.2 (Fast Track Permanent Residency)

Requirements – To be eligible the applicant must:

1. Make a investment of a minimum of €300.000: 

  • Eligible through purchasing investing at least €300,000 (excluding VAT) in one of the following options (a) residential properties (b) commercial properties (c) company share capital and (d) Cyprus investment funds,
  • Option (c) investing at least €300,000 (excluding VAT) in a company share capital gives the right to the main applicant to work in Cyprus as an employee,
  • The P.R. does not expire and the holder does not need to renew it.
  • All options give the right to applicants to be shareholders in Cyprus.

Note: Properties under construction can be included.

Note: Property can also be bought in a company’s name if the actual owner or ultimate beneficiary will be the applicant or their spouse.

2.   Have an Annual Income:

  • The applicant must prove an annual income from abroad of minimum €30.000
  • This is increased by €5.000 for each dependent (e.g. children and spouse).
  • This is also increased by €8.000 for each dependent parents or parent-in-law
  • If all above is satisfied the above family members can apply and get the permanent residence permit.

Note: It can be any income deriving from salaries, pensions, dividends, fixed deposits, rents etc.

Family members

  1. The Permanent Residency permit covers the spouse and children up to 18 years old
  2. Also, children between 18 and 25 years old are able to apply as long as they are financially dependent on the applicant and are unmarried
  3. The Permanent Residency is kept by the children for life even if they exceed the age of 25 or do not continue to fulfil the above terms )e.g. unmarried, students, financially dependent)

Note: Only Fast Track Residency allows parents and parents-in-law of the applicant to also get a Permanent Residency without buying an additional property 

Conditions and Restrictions

  1. The holder must visit Cyprus once every two years. If not, the residency permit will be cancelled automatically
  2. The holders of Permanent Residency are not permitted to work in Cyprus. However, they can live in Cyprus as shareholders in a Cypriot Company, which are able to undertake business in Cyprus or abroad, and also receive dividend income from companies. (We are able to assist in the Company incorporation)

Duration

  • Application process: 2-3 months (Fast-Track)
  • Application Approval Rate 100%

B) Permanent Residency in Cyprus Category F (not Fast Track)

Requirements – To be eligible the applicant must:

  1. Purchase a Property in Cyprus – Category F residency is flexible and does not have a strict requirement of property purchase as a rental may also be possible:
  • However, it is always recommended to buy a property in Cyprus of any amount. (We are able to assist in presenting various property options according to your needs and requests and finalising purchase)
  • It can even be a resale property (not new) purchased
  • The money for the purchase does not need to be transferred from abroad

2.   Have an Annual income:

  • The applicant must show an annual income of at least €9.568 for one applicant, plus €4.613 for each dependent person.
  • This income must come from abroad

Note: It can be any income deriving from salaries, pensions, dividends, fixed deposits, rents etc.

3.  Deposit in a Cyprus bank:

  • The applicant should have deposited in a bank account in Cyprus an amount of approximately €15.000 to €20.000. (We are able to assist in the setting up of a bank account)
  • Unlike the Fast-Track application, the deposit is not pledged, and the money can be used after the application is submitted

Family members

  1. Only children up to the age of 18 years old are allowed to apply as a dependent
  2. Their permanent residency will be valid only until they become 18 years old
  3. The parents or parents in law of the applicants cannot apply as dependents

Conditions and restrictions of the permanent residency program

  1. The holder must visit Cyprus once every two years.If not, the residency permit will be cancelled automatically.
  2. The holders of Permanent Residency are not permitted to work in Cyprus. However, they can live in Cyprus as shareholders in a Cypriot Company, which are able to undertake business in Cyprus or abroad, and also receive dividend income from companies. (We are able to assist in the Company incorporation)

Duration

  • Processing time about 12 months
  • Application Approval Rate 100%

Advantages of Residency Programs: 

Cyprus, located between three continents – Africa, Europe, Asia – is a proud member of the Eurozone and home to around 1 million people. Since 2014, Cyprus has been experiencing strong and rapid growth and is fast becoming an appealing destination for Non-EU citizens.

Cyprus is considered special instantly by all new visitors. The island possesses the best of everything, from democracy and security to Europe’s best climate . The island’s small size and Mediterranean way of life means you and your family get to experience a stress-free daily life, away from the hustle and bustle that you will find in bigger countries.

The island will be a safe haven for you and your family to build a home and start the European dream.

1. The Cyprus Tax Regime

Corporate Tax

The Cyprus tax regime has a long list of tax advantages aiming to benefit companies and individuals situated in Cyprus

A company is considered to be a Cyprus tax resident if it is managed and controlled from Cyprus. Worldwide business profits of a Cyprus tax resident company will be subject to a corporation tax of 12.5% with a number of other tax advantages that companies can benefit from:

  • Dividend income is in general exempt from tax irrespective of its source
  • Cyprus does not impose income or capital gains tax on profits and gains from the disposal of shares, bonds, debentures
  • Cypriot companies are exempt from taxation on foreign exchange (FX) gains
  • No withholding tax is imposed on interest and on royalties paid from Cyprus in respect of intellectual property used outside Cyprus
  • Dividends paid to non-resident shareholders are exempt from withholding tax in Cyprus
  • Profits of a permanent establishment maintained abroad are generally exempt from tax in Cyprus

Personal Tax

  • Individuals who spend more than 183 days in Cyprus are considered a tax resident of Cyprus
  • A Cypriot tax resident individual is subject to income tax on his/her worldwide income whereas a non-Cypriot tax resident individual is subject to income tax only on Cyprus sourced income
  • Tax exemption on dividends and interests earned by non-domicile

Double Taxation Treaties

Cyprus has currently tax treaties with more than 60 countries, including countries in North America, Europe, Africa, the Middle East. Treaties provide two advantages:

  1. protection from double taxation on the same income from two states
  2. protection against excessive foreign tax

2. Schengen Area

While holding a Cyprus Permanent Residency, Non-EU applicants can easily apply for a Schengen visa and travel across Europe. This will allow you to have less hurdles previously found in your country of origin.

3. Location, Location, Location

Cyprus’ location is very strategic as it is positioned between Europe, Africa, and Asia, with the island’s two international airports linking Cyprus to all major airports:

  • London – 4 hours 30 minutes (Direct)
  • Paris – 4 hours 15 minutes (Direct)
  • Frankfurt – 4 hours (Direct)
  • Zurich – 3 hours 30 minutes (Direct)
  • Dubai – 3 hours 30 minutes (Direct)
  • Doha – 3 hours 30 minutes (Direct)
  • Beijing – 13 hours (1 stop)
  • New York – 11 hours 30 minutes (1 stop)
  • Singapore – 10 hours 40 minutes (1 stop)

 4. Quality Workforce

  • Benefit from the local impressive skilled workforce Cyprus has to offer, direct access to a great pool of talent from other EU countries
  • Benefit from programs allowing international professionals to easily relocate
  • Almost half of the workforce in Cyprus have a tertiary degree, predominantly from the UK. – one of the highest in the EU. More Cypriots earn degrees from foreign universities than any other EU country

5. Operational Costs

Launching a business in Cyprus reduces your overall set-up costs compared to other EU countries resulting in more budget being allocated for growth and development of your business.

  • Lower labor costs and lower office rent than other EU countries, so you can set up a business a lot cheaper than the rest of Europe
  • Low business and high quality support costs – services like I.T., accounting, legal, etc.

6. Member of the EU

As a proud member of the European Union Full access to European Markets with free movement of goods, services, capital, along with access to 40+ EU trade agreements with countries outside the E.U.

Cyprus’ legislation is fully compliant with the EU legislation. European Union directives can be fully transposed into Cyprus legislation and EU regulations have direct effect and full application in Cyprus.

7. Life in Cyprus

When considering where to relocate, it is always vital to consider the quality of life you aim to have for you and your family. Choosing Cyprus ensures your company enjoys a Mediterranean island that provides a very high standard of living that includes:

  • One of the EU’s best all-year climates and one of the best worldwide,
  • Over 65 Blue Flag status beaches for all tastes (highest % per capita) sports, entertainment, etc, High level public & private healthcare services,
  • Short distances – can travel from one side of the island to another in 2 ½ hours Considered one of the world’s safest countries with one of the lowest crime rates in EU, Reasonable cost of living with great choice fresh products always available – both local and international
  • According to the European Environmental Agency, Cyprus also has the cleanest beaches in Europe
  • Real Estate available to cater all needs – city center, skyscraper, beach, countryside, etc
  • High Level of Education – many private schools and private institutions offering a high level of education in English for your children

What we do

Panayiotis Z. Toulouras LLC provides corporate and immigration services to clients worldwide. Our law firm, with the assistance of our vast network of associates, provides strategic advice spanning all aspects of Real Estate acquisition, Company set-up, Relocation services and Tax Planning.

  • Relocation assistance and advice
  • Real Estate acquisition or rental
  • Citizenship Applications
  • Permanent Residency Applications
  • Employment permits
  • Registration of international companies for the employment of foreign individuals
  • Visas
  • Advice on all related tax aspects
  • Facilitating online bank facilities
  • Processing of investment and lending facilities
  • Opening of private and corporate bank accounts

Contact us today for all information

Address: Faneromeni 106, Office 201, 6031, Larnaca, Cyprus

Telephone: +357 24 623 800   Fax: +357 24 332 991

Email: info@toulouraslaw.com

Website: www.toulouraslaw.com

 

All Eyes on Larnaca! Why Real Estate is booming.

Larnaca has quickly become the island’s most attractive destination for real estate investors. Our team of real estate experts lets you know all you need to know about buying immovable property in Cyprus.

MARINA AND PORT PROJECT

The long-awaited €1.2 billion redevelopment of the Larnaca port and marina, will rejuvenate the city of Larnaca and will be the largest infrastructure project since the construction of the new Larnaca International Airport.

The project will play a formidable role in promoting Larnaca as one of the Mediterranean’s most up and coming tourist destinations.

The project envisages the expansion of the current marina to 650 berths, the infrastructure to accommodate large vessels, the expansion of the current pier, docks and the development of a sizeable passenger terminal for tourist cruise liners. In addition, the plans include the construction of a yacht club and retail park, along with a number of luxury hotels, a private island and residential property.

The spin-off from the project will result in Larnaca growing its footprint as a business hub in Cyprus, with the increase of office space and with international companies choosing to relocate to Larnaca to take advantage of the island’s favourable tax regime. Furthermore, the city’s overall tourist product will undertake a great revitalization through an influx of foreign and local investment.

BUYING IN CYPRUS

When buying real estate in Cyprus, an investor will need to consider various factors before and after purchasing the property.

Despite Real Estate Agencies and Property Developers advising Buyers not to seek the consultation of lawyers, it is highly recommended to seek professional legal advice when purchasing real estate in Cyprus as the repercussions of a one-sided agreement favouring the Seller can result in unrecoverable losses for the Buyer.

Our specialized ream of lawyers are legally obliged as professionals to undertake the appropriate due diligence on the prospective property and all the appropriate checks to ensure the property is ‘clean’ with no possible dangers, in order for you to enjoy the full and unequivocal rights of your future property.

Our specialized team of lawyers shall:

  • verify the Seller’s ownership of the property.
  • carry out an official search at the Land Registry to confirm if there are any encumbrances or charges registered over the property.
  • ensure the availability of all necessary permits, where required.
  • verify the financial standing and viability of the Seller.
  • provide an evaluation of the Seller’s reputation in the Cyprus real estate market.
  • assist in appointing qualified engineers or surveyors to carry out structural or other surveys, where required.
  • draft and execute the contract of sale between both parties with the contract’s provisions negotiated in a fair and balanced way with all formalities complying to all law and regulations applicable in Cyprus.
  • handle all matters related with the Cyprus Tax Authorities, where required.
  • execute an application for permission made to District Office in accordance to the Acquisition of Immovable Property (Aliens) Law Cap. 109 for purchase by non-EU nationals. Note: It takes about 15-30 days for the permission to be issued.
  • submit and register the contract of sale with the Land Registry Office preventing the Seller from transferring the property elsewhere or registering an encumbrance before finalizing the transfer. Note: This is valid as long as the contract is valid and legally effective.
  • assist in handling the payment of stamp duty and transfer fees related to the property.
  • authorised representative of the Buyer through Power of Attorney, from start to finish until the Property is transferred to the Buyer.

Title Deed

A title deed is a formal document issued by the Land Registry Office which legally confirms the ownership of a property.  Once transfer is made at the Land Registry, the title deed will be registered on the Buyer’s name.

When no title deeds are issued yet, this means, most likely immovable property purchased is off-plan or still under development.

There are situations where Buyers purchase a property without a title deed, however, appropriate due diligence must be undertaken to assess the reasons why the title deed has not been issued.

Stamp Duty

Sale Agreements must be fully stamped by governmental authorities within 30 days of its signing.

Rates are as follows:

€0 – €5,000: 0%

€5,001 – €170,860: 0.15%

€170,861 – €8,543,000: 0.20%

Over €8.543.000: €17.086

Transfer fees

Transfer fees are payable to the Land Registry Office and are calculated on the market value of the property on the date of the transfer.  Once the transfer fees are paid, the transfer to the Buyer is finalised.

It’s good to point out that a sole Buyer will pay more transfer fees, so it is custom for Buyers to add family members to the title deed.

Note:

  • A minor named on a title deed requires a Court Order to sell it before reaching 18 years old.
  • No Transfer fees are payable, if the property is subject to VAT (19%)
  • Transfer fees are reduced by 50% if the property was not subject to VAT.
  • 0% Transfer fees are payable if property is transferred from company to company

Transfer fee rates:

Up to €85 000 of the property value - 3%

From €85 001 to €170 000 of the property value - 5%

From €170 001 of the property value - 8%.

Examples

One Buyer buys a house for €400 000:

Transfer fees will be:

€85 000 x 3% + €85 000 x 5% + €230 000 x 8% = €25 200*

Transfer fees for Buyer: €12 600* (where 50% reduction applies)

Three Buyers buy a house for €400 000:

Transfer fees will be:

€85 000 x 3% x 3 persons + €145.000 x 5% = €14,900*

Transfer fees for Buyer: €7,450* (where 50% reduction applies)

OTHER FEES TO CONSIDER

VAT Payable on Property

A VAT rate of 19% is required to be paid when buying a new property.

A reduced VAT rate starting from 5%, is applicable for the acquisition of new residential properties when certain terms and conditions are met:

  1. The property must be used as the primary and permanent residence of the applicant for the next 10 years.
  2. The applicant has not acquired any other residence in Cyprus with a reduced VAT rate.
  3. The applicant must be an individual, over 18 years old, thus legal entities are excluded.

Note: The reduced VAT rate of 5% is applied on the first 200 square meters of the property as per the architectural plans submitted to the Authorities. On the remaining square meters, the standard rate of 19% is imposed.

Municipality Tax

The registered owner of the property is required to pay an annual Municipality Tax, calculated on the market value of the property as at 1st of January 2018. The rates vary from 1% –  2% Municipality tax is payable to the local municipal authority, where the property is located.

Other Fees (Local Authorities)

Depending on the size of the property, local authorities charge between €85 – €500 yearly for garbage collection, sewerage and other community services.

OUR FIRM

Panayiotis Z. Toulouras LLC provides clients legal advice on commercial and residential property.

Our areas of work include:

  • Negotiation and drafting of contracts
  • Sales and Purchase of property
  • Authorised Representation
  • Constructions
  • Market Evaluation
  • Long term and short-term leases
  • Property management for non-residents.
  • Licensing and Permits
  • Due diligence reports
  • Real estate transaction and tax issues

Why Hong Kong firms and HNWI are considering Cyprus as their new base?

Cyprus , located between three continents – Africa, Europe, Asia – is a proud member of the Eurozone and home to around 1 million people. Since 2014, Cyprus has been experiencing a strong and rapid growth and is fast becoming an appealing destination.

With the recent turmoil in Hong Kong, many firms and HNWI are seeking refuge to a jurisdiction that provides safety, convenience and potential for growth.

With foreign investors increasingly choosing Cyprus – the economic climate, real estate prospects, investment funds, shipping, construction, tourism, filming and energy sectors – are sectors which have experienced consistent growth. The competitive, modern and transparent legal, financial and regulatory framework that Cyprus possesses allows the island to be a credible and highly reputable financial center for Hong Kong firms and HWNI to set up base.

As an ex-British colony, Cyprus shares similarities with Hong Kong, as both jurisdictions have retained the common law legal system which is based on the British legal system.

Why Choose Cyprus?

Enjoy the right quality of life

When considering where to redomicile or set up your business, it is always vital to consider the quality of life you aim to have for you, your family and your employees. Choosing Cyprus ensures you and your team work in a Mediterranean island that provides you with a very high standard of living that includes:

  • One of the EU’s best all-year climates and one of the best worldwide,
  • Over 65 Blue Flag status beaches for all tastes (highest % per capita) sports, entertainment etc,
  • High level public & private healthcare services,
  • Short distances – can travel from one side of the island to another in 2 ½ hours
  • Considered one of the world’s safest countries with one of the lowest crime rates in E.U.,
  • Reasonable cost of living with great choice fresh products always available – both local and international
  • Real Estate available to cater to all needs – city centre, skyscraper, beach, countryside etc
  • High Level of Education – many private schools and private institutions offering a high level of education in English

Accessing Talent

E.U.
  • Benefit from the local impressive skilled workforce Cyprus has to offer, direct access to a great pool of talent from other EU countries
  • Benefit from programmes allowing international professionals to easily relocate
  • Work visas for non-EU nationals are available to enable companies to hire from non- EU countries whenever the required skill-set is not available locally
Cyprus
  • Almost half of workforce have a tertiary degree – one of highest in the EU,
  • Rapid growing education system – one of the highest enrolments in domestic universities with many UK universities partnering up with Cyprus universities,
  • High number of Cypriots educated abroad – more Cypriots earn degrees from foreign universities than any other EU country

Setting up with lower costs

  • Launching and running your business in Cyprus reduces your overall set-up costs compared to other EU countries resulting in more budget being allocated for growth and development of your business.
  • Lower labour costs than other E.U. countries
  • Lower office rentals costs than most E.U. countries
  • Low business support costs and high quality – services like I.T., accounting, legal etc.

Benefiting through tax incentives

Cyprus has one of the lowest tax burdens in Europe and a highly competitive set of tax incentives for businesses and individuals. It is great to note that people who decide to move their personal tax residency to Cyprus, will automatically be considered as non-domiciled in Cyprus for a maximum of 17 years.

  • different set of rules for ‘tax residents’ and ‘non-tax residents’
  • corporate tax is only 12,5 %, which is one of the lowest in the E.U.
  • very low tonnage tax for ship-owning and shipping companies,
  • 2,5 % on income from Intellectual Property
  • no corporate tax for ‘non tax resident’ companies
  • no Cyprus tax on disposal or trading of securities
  • no Cyprus tax on income from dividends on a company level, for a period of four years
  • no Cyprus withholding tax on dividends paid to shareholders outside of Cyprus
  • no Cyprus tax on dividend income for non-domiciled but tax-resident individuals
  • no Cyprus tax on interest income on account of non-residents with banks in Cyprus
  • no Cyprus tax for International Trusts
  • full tax group relief
  • offshore entities from other countries are allowed as shareholders
Non-Tax Residents
  • Non-tax resident Cyprus Companies are not liable for corporate tax in Cyprus, provided that each director/s do not reside in Cyprus, and the companies do not conduct any business with natural or legal persons residing in Cyprus, but,
  • Where a non-tax resident Cyprus Company conducts business in Cyprus, the profit from this business will be taxed in Cyprus.

Communicating, Commuting and Access

With English being a predominant language spoken between businesses, when setting up your business you can benefit from the island’s high percentage of English-speaking citizens. Cyprus is also centrally located between 3 continents (Asia, Europe, Africa) making it easy to commute back home or for business purposes:

  • 73% of Cypriots speak English – official language due to British Colonization
  • English widely accepted for business transactions, government services, contracts, banking and other day-to-day functions you’ll be undertaking
  • Daily flights in & out of Cyprus through Larnaca & Paphos international airports to multiple destinations making your global commuting easier
  • Full access to European Markets with free movement of goods, services, capital
  • Access to 40+ EU trade agreements with countries outside the E.U.
  • UK-Cyprus trade relations existed before the E.U. and will continue strongly after Brexit as Cyprus belongs to the Commonwealth and has sovereign British Bases on the island

Panayiotis Z. Toulouras LLC provides legal services to clients worldwide. Our law firm, with the assistance of our vast network of associates, provides strategic legal advice for:

  • the incorporation of a Cyprus company
  • setting up a branch in Cyprus
  • re-domiciliation of a Hong Kong company to Cyprus
  • opening of bank accounts
  • business visa applications and other visas
  • work permits
  • employment contracts
  • purchase/rental of property for commercial purposes
  • purchase/rental of property for residential purposes
  • applications for permanent & temporary residency
  • applications for naturalization
  • Cyprus international trust creation
  • I.P. registration

We answer all your FAQs about the new ”Airbnb” Law in Cyprus!

Panayiotis Z. Toulouras LLC consults and assists some of the island’s biggest property management companies. Our team answers all the Frequently Asked Questions you may have on the new ”AirBnB” law. For more information visit www.toulouraslaw.com.

The House of Representatives passed a New Law, N. 9(I)/2020 (also “the Law”), regulating the registration and operation of self-catering accommodation, which was subsequently published in the Government’s official Gazette on the 7th of February 2020.

The New legislation regulates the licensing, advertising and operation of Self-catering Accomodation in Cyprus ‘SCA’.

Definition of Self-Catering Accommodation

“Either a single tourist furnished villa, or a single residence, or a single apartment, which constitutes “a unit” under the provisions of the Immovable Property (Tenure, Registration and Valuation) Act, which does not constitute a “hotel” or “tourist accommodation” as defined in Part II and Part III of the same law, which is rented as a villa or a residence or a unit and not as a part of it, and is registered in the Register of Self-Catering Accommodation under the provisions of Part IIIA.

Conditions for Renting

Renting your self-catering accommodation is from now on prohibited, unless certain conditions are met according to the Law:

  1. The SCA bears the features and specifications of a single residence and/or a single tourist furnished villa and/or single apartment, as these are defined by the Law

In simple terms, properties can be rented as a whole unit, not as rooms individually.

  1. The SCA is registered at the Deputy Ministry of Tourism (DMT) registry to obtain a license. All existing operators and properties have a 2-year grace period to comply but all new licensees must comply asap (at the moment the DMT has yet to launch a platform for registration).
  2. The SCA maintains throughout its operation a valid license and has renewed its license with the DMT when required. For each unit, there will be an annual fee based on the category of the unit, prepaid for 3 years.

Advertisement/Marketing/Reg. Number

SCA can only be advertised, according to the Law, provided the SCA is registered at the DMT registry and licensed, has received a registration number, and their registration number is indicated on all promotion/advertisements of the SCA.

  1. Any self-catering accommodation that operates prior to the Law being enforced, will have a two-year grace period to abide by these advertising requirements.
  2. At the end of the grace period, no self-catering accommodation can be advertised according to the Law unless they have received a registration number.
  3. Whoever advertises or operates a SCA without the appropriate number and license registration in place, can be guilty of an offense carrying a prison sentence of up to one (1) year and/or a fine not exceeding five thousand euros (€ 5,000).
  4. The publication/advertisement of misleading or false information and/or other information related to the SCA is prohibited

We note:

a) Each individual property will have it’s own registration number. This will be probably identified by the EAC meter’s unique identification number.

b) All contracts made with landlords by operators should include express permission for the commercial use/subletting/allowing for short term rental.

c) Where an operator applies for licensing a property, the landlord/owner’s authorization shall be required.

d) Fees will be prepaid for 3 years. Should a license be withdrawn, we envision that the DMT will refund back proportionally for the time remaining.

Revocation of License

The DMT is allowed/permitted to revoke automatically any property from the Self-Catering registry if:

  1. where license was granted under false or misleading information given
  2. where the SCA operations have ceased.
  3. where DMT deems necessary after an inspection, that all necessary certificates and documents required to obtain a license where not renewed
  4. where operator/manager/management of SCA has been convicted for a serious offence under the rules and regulations of Safety and Health at Work legislation, as well as offences related to health violations as regulated by the relevant rules and regulations set by the Ministry of Health
  5. where operator/manager/management of SCA has passed away or has been issued a bankruptcy order (if a natural person) or a liquidator has been appointed (if a legal person)
  6. where a provisional order has been issued or completion of a provisional order has been finalized for the pause of SCA operations.
  7. where provisions of the Law or regulations set by the New Law have constantly been infringed
  8. where operator/manager/management of SCA has been convicted, after license has been obtained, of serious criminal offences and/or drug related offences thus infringing owner/operator’s clean criminal record.

Inspections

The DMT can carry out ex officio inspections of the SCA at all times.

Application Procedure & Renewal

  • The Operator/Manager/Management of an SCA with prior approval and/or authorization of the owner of the property submits an application the DMT, together with the fixed fee set for their specific SCA as determined by the DMT (not yet defined) along with a declaration confirming that below conditions are met/included:

a) Registration with Tax Department for a tax identification number or a VAT number depending on which is required.

b) All the relevant details and characteristics of the unit, such as its technical specifications, and, evidence that it has been built as per the building permit and planning permission issued by the appropriate local authorities.

c) Insurance Cover for the SCA covering any dangers, which includes fire damage and public liability.

  • The DMT within 2 months of receiving the declaration, must examine and inform the applicant where their application has been approved or rejected (with justification).

Note: The DMT is currently in the process of developing a platform so all such applications shall be submitted online. Until such a platform is live, no applications can be expected to be submitted.

  • With the registering the SCA at the DMT, the DMT will simultaneously provide a registration number and license that should appear and be publicized in all transactions, and the first registration license which is valid for 3 years from the date of issue.
  • The registration license is renewed every 3 years after an application is submitting at the DMT, along with the registration renewal fee, within 3 months prior to the existing license expiring.

Taxation

Once registered with the Tax Department, the provisions of the Income Tax Law should apply, in that the unit owner will have to declare any income derived from the unit and pay any tax liability arising from the income.

Technical specifications

  • Furnished Villas and House/Apartments:
  1. Space with living room
  2. Single room that functions as the kitchen, living room and bedroom. (Studio)
  3. Kitchen area which can be incorporated as part of living room with a ventilator necessary
  4. Bathroom
  • Capacity:
  1. Maximum capacity per house is 10 persons with a house containing 4-5 bedrooms – please note that more than 3 bedrooms will require a second bathroom
  • Landscaping:
  1. For residential complexes, low dividers that separate the access and the garden of each house from the neighbour must be provided.
  2. The decoration of the garden with flowers, trees, lawn, also includes access to entrances and communal facilities.
  3. Provided that it is permitted, where SCA is found at a residential complex, each property should be allocated at least one parking space
  • Facilities:
  1. Air-conditioning systems – installation and operation
  2. Water supply – installation to provide hot-cold water to all spaces
  3. Drainage – connection to sewerage system and/or existence of installations/arrangements for sewerage according to all permits given
  4. Electronic lighting system – installed and provided in all the interior space, verandas and the garden where seating is provided.
  5. Construction – It is a permanent building with all building and/or planning permits required issued
  6. Disability Facilities – If SCA contains facilities for disabled people this should be stated.

Panayiotis Z. Toulouras LLC areas of work include, among others:

      • Negotiation and drafting of contracts
      • Sales and Purchase of property
      • Constructions
      • Long term and short-term leases
      • Property management for residents and non-residents
      • Licensing and Permits
      • Property due diligence reports
      • Property management employee agreements
      • Real estate transaction and tax issues