# Self employed



## Guest (Dec 9, 2010)

I try to find out about self employment in Cyprus. But it seems that there is nowhere to find info about how to start a selfemplyment, demands for bookkeeping etc. I dont want to start a company if its not necessary to run our business. It only cost a lot of time and money

Anyone that can point to a place of info in this subject

Regards

from Frankfurt covered in 20 cm of snow


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## Guest (Dec 9, 2010)

I have done similar research myself and have had the same reaction how difficult it is to find information, now after having moved here I'm slowly starting to think that the tax-law here can be summarized with "you don't pay taxes, unless you get caught" 

The personal income tax has an amazing allowance before you pay a single euro in income-tax, like €20.000 annually (check low-tax.net for exact numbers), however the moment you step over that line the income-tax is pretty normal (20-30%), 
Corporate tax however is just a flat 10%, 

so to answer your question if starting a company is necessary it probably is (assuming you want to go the legal way) if you make a substantial amount of money, this way you don't have to pay 25% income-tax but can rather enjoy 10% corporate-tax (which you then do creative bookkeeping to get into your pockets, for example give everyone in your family a salary of just under the income-allowance, and if you need more cash take it out as dividence for something like 15% I believe).

but as for the actual process of setting up a self-employed company I haven't looked into much, but I agree that it would be nice to just skip that whole part and just wire your paypal account straight to your personal bank-account


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## Veronica (Apr 5, 2008)

Beware going down the route of trying to avoid paying tax. The government is cracking down on tax cheats and they do not mess about if you are caught.
A lawyer will be able to help you register a company and it is worth doing it for peace of mind.

Veronica


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## Guest (Dec 9, 2010)

*Self-employed*



NiklasB said:


> I have done similar research myself and have had the same reaction how difficult it is to find information, now after having moved here I'm slowly starting to think that the tax-law here can be summarized with "you don't pay taxes, unless you get caught"
> 
> The personal income tax has an amazing allowance before you pay a single euro in income-tax, like €20.000 annually (check low-tax.net for exact numbers), however the moment you step over that line the income-tax is pretty normal (20-30%),
> Corporate tax however is just a flat 10%,
> ...


I cant believe that all this pool-cleaners and gardeners go through the ordeal to start a Ltd or other kind of company. But all of them cant work black so there must be a way in the middle, to pay taxes and social fees without to have a company. But where to find the info. Here in Germany its called Gewerbe, in Sweden Enskild firma or Handelsbolag. They all share the same thing, the owner is fully responsible for the business losses and such. But at the same time its a minimum of administration. This is what I am looking for

Anders


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## Veronica (Apr 5, 2008)

Vegaanders said:


> I cant believe that all this pool-cleaners and gardeners go through the ordeal to start a Ltd or other kind of company. But all of them cant work black so there must be a way in the middle, to pay taxes and social fees without to have a company. But where to find the info. Here in Germany its called Gewerbe, in Sweden Enskild firma or Handelsbolag. They all share the same thing, the owner is fully responsible for the business losses and such. But at the same time its a minimum of administration. This is what I am looking for
> 
> Anders


Beleive me Anders the vast majority of pool cleaners and property management companies are working on the black. However they are going to be in for a severe shock as the police are starting to knock on doors. It just takes someone who dosnt like you, or a local who feels you are taking work from him to report you to the police and they have to act on information. Companies who are working legally are now starting to report those who are illegal.
I can understand why someone who pays their taxes, social insurance and VAT would get upset about those who are basically stealing work from them.


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## Guest (Dec 9, 2010)

Veronica said:


> Beleive me Anders the vast majority of pool cleaners and property management companies are working on the black. However they are going to be in for a severe shock as the police are starting to knock on doors. It just takes someone who dosnt like you, or a local who feels you are taking work from him to report you to the police and they have to act on information. Companies who are working legally are now starting to report those who are illegal.
> I can understand why someone who pays their taxes, social insurance and VAT would get upset about those who are basically stealing work from them.


I hope I did not sound like i want to work black. But I want to find a less bureaucratic way. Its possible in all other EU countries, whz not Cyprus


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## Veronica (Apr 5, 2008)

Vegaanders said:


> I hope I did not sound like i want to work black. But I want to find a less bureaucratic way. Its possible in all other EU countries, whz not Cyprus


No Anders you didnt sound as though you wanted to work black. 
Unofrtunately though there is no easy way if you want to do it properly. The bureaucracy is horrendous
We just leave someone else to do it all for us. Our accountant sorts everything out, all we have to do is dump all the paperwork on his desk and leave him to it.:clap2::clap2:


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## Guest (Dec 9, 2010)

Veronica said:


> Beware going down the route of trying to avoid paying tax. The government is cracking down on tax cheats and they do not mess about if you are caught.
> A lawyer will be able to help you register a company and it is worth doing it for peace of mind.
> 
> Veronica


Ofc we will pay taxes, but at the same time you want to minimize as much as possible within the laws. I am sure that is why you also use taxadvisor.

But it seems I need to find a good advisor on Cyprus that can answer all my questions before we proceed


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## theresoon (Apr 11, 2008)

Vegaanders said:


> I try to find out about self employment in Cyprus. But it seems that there is nowhere to find info about how to start a selfemplyment, demands for bookkeeping etc. I dont want to start a company if its not necessary to run our business. It only cost a lot of time and money
> 
> Anyone that can point to a place of info in this subject
> 
> ...


It depends what you want to do. You don't necessarily need to start a business and you have more advantages tax wise if you have a register doing business as rather than a limited liability company. If you look at the major 4's websites for Cyprus you will most likely find this info. Where are you going to be based?


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## Guest (Dec 9, 2010)

theresoon said:


> It depends what you want to do. You don't necessarily need to start a business and you have more advantages tax wise if you have a register doing business as rather than a limited liability company. If you look at the major 4's websites for Cyprus you will most likely find this info. Where are you going to be based?


We will be based around Paphos most likely. Our business is 100% webbased and all incomes come from abroad.

Anders


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## Veronica (Apr 5, 2008)

Vegaanders said:


> We will be based around Paphos most likely. Our business is 100% webbased and all incomes come from abroad.
> 
> Anders


If your business is web based and most of the income comes from abroad your case will be totally different from someone with a business which is totally based here.
You really do need to find a tax specialist to advise you.


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## Veronica (Apr 5, 2008)

Actually even for a business which is based here it is not always necessary to have a LTD company. The other way is simply to register as self employed. You still have to do accounts and fill in tax returns, pay social etc but you don't need to pay VAT until you hit a certain level and do not have to have audited accounts.


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## Guest (Dec 9, 2010)

Veronica said:


> Actually even for a business which is based here it is not always necessary to have a LTD company. The other way is simply to register as self employed. You still have to do accounts and fill in tax returns, pay social etc but you don't need to pay VAT until you hit a certain level and do not have to have audited accounts.


Now we are on the right way. I am sure that we need to pay VAT but its no problem, we calculate VAT here. The service will be cheaper for the customer anyway because of the lower VAT on Cyprus


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## Tanager (Mar 14, 2009)

We are in the same boat with Vegaanders. I also need information about this but I guess we just have to find an advisor.

Thanks for the tip!


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## theresoon (Apr 11, 2008)

Vegaanders said:


> Now we are on the right way. I am sure that we need to pay VAT but its no problem, we calculate VAT here. The service will be cheaper for the customer anyway because of the lower VAT on Cyprus


You don't need to register for VAT till you hit 15,000e(might have changed this was a couple of years ago). You might want to though in order to subtract the VAT you pay out for things. VAT works very different from sales tax in the US so I thought it was very complicated. Anyway, I thought it was interesting that even if you have more VAT going out than coming in they don't give you a refund, you have to wait a few years in case you end up owing VAT.

Again, I think it depends what the service you are offering is, whether you should incorporate or not. Is there a risk of liability? If there is then I would incorporate. Do you already have a company registered for what you are doing? How big is it? All these have to be taken into account for your decision.


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## Veronica (Apr 5, 2008)

Dina click on the link at the bottom of his posts
He cant tell you to do that but I can:clap2::clap2::clap2:


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## theresoon (Apr 11, 2008)

da!

Any chances for additional Gesundheit products? They could do well here as they are outrageously expensive. May I suggest Glucosamine Chondroitin.

I think you might not need to incorporate. Are you going to keep you current merchant processing or will you need to set a new one in Cyprus? I think you might find it more expensive to prossess thru a Cyprus bank(it is compared to the US)


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## theresoon (Apr 11, 2008)

Veronica said:


> Dina click on the link at the bottom of his posts
> He cant tell you to do that but I can:clap2::clap2::clap2:


I though it would be something bad!


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## Veronica (Apr 5, 2008)

theresoon said:


> I though it would be something bad!


Lol no but if he had told oyu to click on his link I would have to slap him for advertising But its ok for me to tell you to click on it.
I might even become customer of his.:clap2::clap2::clap2:


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## Guest (Dec 10, 2010)

theresoon said:


> da!
> 
> Any chances for additional Gesundheit products? They could do well here as they are outrageously expensive. May I suggest Glucosamine Chondroitin.
> 
> I think you might not need to incorporate. Are you going to keep you current merchant processing or will you need to set a new one in Cyprus? I think you might find it more expensive to prossess thru a Cyprus bank(it is compared to the US)


The webshop is a minor part of our business. The big part is a Surf Anonymous service for the German market. Turnover total about 15000 euro/month. Profit is a secret Then my wife run 3 affiliate sites that gives her about 2000 euro per month. We dont have a company today, we use a German Gewerbe, that is something like self employed. We are registered for VAT and have a accountant for the book keeping. If possible I like to keep it the same way in Cyprus. Perhaps the webshop has to go, depending on shipping costs to and from Cyprus


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## Guest (Dec 10, 2010)

When you said "I dont want to start a company if its not necessary to run our business" I thought you meant regarding wheter to start a company vs. to work as a sole-trader (i.e. no company you just declare what you earn as regular income-tax, which is possible in UK), but maybe there are no such thing as sole-trader here in Cyprus.


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## Guest (Dec 10, 2010)

NiklasB said:


> When you said "I dont want to start a company if its not necessary to run our business" I thought you meant regarding wheter to start a company vs. to work as a sole-trader (i.e. no company you just declare what you earn as regular income-tax, which is possible in UK), but maybe there are no such thing as sole-trader here in Cyprus.


I think that must be like self employed on Cyprus. When Veronica explained it sounded a lot like what we have here

Anders


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## Guest (Dec 10, 2010)

When I read through the thread again today I saw a comment about VAT.

I really can believe that its true that the taxman in Cyprus dont pay out VAT they own a company. If so this must break all basic EU taxrules in the book. 
Just think of a company selling products bought in Cyprus to a company in UK. This products are bought including VAT and must be sold without VAT. So in this case the company should have got all paid VAT back. Can't be possible
Not even to pay it back after several years can be ok. The main rule in EU VAT law is that companies dont pay any VAT

Anders


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## Veronica (Apr 5, 2008)

Vegaanders said:


> When I read through the thread again today I saw a comment about VAT.
> 
> I really can believe that its true that the taxman in Cyprus dont pay out VAT they own a company. If so this must break all basic EU taxrules in the book.
> Just think of a company selling products bought in Cyprus to a company in UK. This products are bought including VAT and must be sold without VAT. So in this case the company should have got all paid VAT back. Can't be possible
> ...


I don't think I understand exactly what you are saying Anders
Companies pay VAT but claim back VAT on purchases. Surely that is normal everywhere?
It is the way it is in the UK as well as Cyprus and I would have thought in every other EU country?


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## Guest (Dec 10, 2010)

Veronica said:


> I don't think I understand exactly what you are saying Anders
> Companies pay VAT but claim back VAT on purchases. Surely that is normal everywhere?
> It is the way it is in the UK as well as Cyprus and I would have thought in every other EU country?


Hi Veronika!
Earlier in the thread you will find a answer from theresoon stating 

"anyway, I thought it was interesting that even if you have more VAT going out than coming in they don't give you a refund, you have to wait a few years in case you end up owing VAT."

I really can believe this

Anders


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## Veronica (Apr 5, 2008)

Vegaanders said:


> Hi Veronika!
> Earlier in the thread you will find a answer from theresoon stating
> 
> "anyway, I thought it was interesting that even if you have more VAT going out than coming in they don't give you a refund, you have to wait a few years in case you end up owing VAT."
> ...



Oh yes it is true. They are not keen to pay you what they owe you

By the way I love the way you call me Veronika with a German accent
It reminds me of my childhood.:clap2:

Veronica


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## Guest (Dec 10, 2010)

Vegaanders said:


> Hi Veronika!
> Earlier in the thread you will find a answer from theresoon stating
> 
> "anyway, I thought it was interesting that even if you have more VAT going out than coming in they don't give you a refund, you have to wait a few years in case you end up owing VAT."
> ...


Hehe, sorry for the "k". And I am not even german, but we spell your name mostly with k also in Sweden


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## Veronica (Apr 5, 2008)

Vegaanders said:


> Hehe, sorry for the "k". And I am not even german, but we spell your name mostly with k also in Sweden


Don't apologise Anders. I am used to it. I grew up in Germany so got used to the way they spell my name there. They also spell it with a k here in Cyprus.


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## theresoon (Apr 11, 2008)

Vegaanders said:


> Hi Veronika!
> Earlier in the thread you will find a answer from theresoon stating
> 
> "anyway, I thought it was interesting that even if you have more VAT going out than coming in they don't give you a refund, you have to wait a few years in case you end up owing VAT."
> ...


Ok, I had not understand what you were asking. I was comparing with the US where sales tax works as follows. You get a sales tax id, you go buy things and you show the id and state these things are for resale so you don't pay sales tax. you sell your products and then you calculate what you owe in sales tax (at the end of the quarter) and send it in. Here you get a VAT registration- any item you buy for the business (whether for resale or not) you pay VAT on it. You sell your products (including VAT) At the end of the month you calculate how much VAT you collected, subtract what you paid and get a number. If the number shows you owe then you pay. If it shows that they owe you, they don't pay you they wait till you have something owed to them to set it against. An accountant even advised me not to even try to claim this money on time as it will make them think you have don't something wrong and will want to start looking at your accounts.


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## Guest (Dec 11, 2010)

theresoon said:


> Ok, I had not understand what you were asking. I was comparing with the US where sales tax works as follows. You get a sales tax id, you go buy things and you show the id and state these things are for resale so you don't pay sales tax. you sell your products and then you calculate what you owe in sales tax (at the end of the quarter) and send it in. Here you get a VAT registration- any item you buy for the business (whether for resale or not) you pay VAT on it. You sell your products (including VAT) At the end of the month you calculate how much VAT you collected, subtract what you paid and get a number. If the number shows you owe then you pay. If it shows that they owe you, they don't pay you they wait till you have something owed to them to set it against. An accountant even advised me not to even try to claim this money on time as it will make them think you have don't something wrong and will want to start looking at your accounts.


The way to calculate is correct and is eu law. But that they dont pay it back must be a break agaist the law. I made an example earlier in the thread. Let say this company is a cyprus wine company selling wine to swedish monopoly. I refuse to believe that they dont get the VAT back. It can be millions. If they dont get it back it means that all their purchase is 15 % more expensive

Anders


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## theresoon (Apr 11, 2008)

Vegaanders said:


> The way to calculate is correct and is eu law. But that they dont pay it back must be a break agaist the law. I made an example earlier in the thread. Let say this company is a cyprus wine company selling wine to swedish monopoly. I refuse to believe that they dont get the VAT back. It can be millions. If they dont get it back it means that all their purchase is 15 % more expensive
> 
> Anders


:confused2:hm! What can I tell you? I really don't know. You might find helpful the KPMG Cyprus website, they have a tax guide for Cyprus, that might be able to shed some light.

Also, if I remember right, you don't report VAT for the immediately previous month but 2-3 prior, ie. in December you don't report sales and VAT for November but September.

Dina


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## Guest (Dec 11, 2010)

theresoon said:


> :confused2:hm! What can I tell you? I really don't know. You might find helpful the KPMG Cyprus website, they have a tax guide for Cyprus, that might be able to shed some light.
> 
> Also, if I remember right, you don't report VAT for the immediately previous month but 2-3 prior, ie. in December you don't report sales and VAT for November but September.
> 
> Dina


No worries, I will find out before we make any changes. 

First now I hope that the workers in Greece stop striking so we can take the boat to Limassol as planned#

Anders


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## Guest (Dec 30, 2010)

Cyprus Expat said:


> You need good advice before taking the plunge. You have to also look at the long term, will you need a Ltd company if you start to make large profits etc.
> 
> There are many advantages to having a Ltd company, purchasing a property through a company has good tax advantages too.
> 
> ...


Hi!

For the moment we will work without a Ltd. We have no intention to work black but with a turnover of 150-200000 euro its no use with all the extra costs.

And we have no liabilities involved, we just resell a service with very good profit.

But thanks anyway, when we have to grow I will contact you

Regards

Anders


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## Guest (Mar 7, 2011)

Hello Anders I think I saw you mention in another thread that you have registered a ltd now  did you learn anything in the process?


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## Guest (Mar 7, 2011)

Hi Niklas!

We have registered now and what we have learned is that take help to do it! Its not that easy as many say, because some of the important parts must also be done in Greek language. We used a Cyprus firm to help us. I found them after a long seach in forums. It seems to be many companies that offer help with this but only want to make money

We used Cyprus Company Formation, at 475 EURO, by Leading Cyprus Firm and I am very satisfied so far. They will also do our books and such

Anders


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## ymg (Dec 19, 2009)

I have read through the thread. Very interesting.
I'm going to check the website to see what they say etc.
Even I think many people are some what struggling with setting up a self employed business or a limited. There is so much to find on the internet about setting up a business, but you are not completely sure until you reach Cyprus and take proper advise into account. Which I will do too 
Good luck!



Vegaanders said:


> Hi Niklas!
> 
> We have registered now and what we have learned is that take help to do it! Its not that easy as many say, because some of the important parts must also be done in Greek language. We used a Cyprus firm to help us. I found them after a long seach in forums. It seems to be many companies that offer help with this but only want to make money
> 
> ...


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## Veronica (Apr 5, 2008)

i have had a look at the website for the company mentioned by Anders and I am glad to see it is a Cypriot company. There are many British companioes offering similar services but from our esperience they are not fully a fait with how things are done in Cyprus and often they don't have Greek speakers on their staff which means they are not able to represent their clients efficiently.
We were foolish enough to use a British company when we first started our business and they had no idea what they were doing and almost cost us a great deal of money. Luckily we saw the warning signs before it was too late and found a good accountant who sorted everything out for us and saved us getting into serious difficulties with the tax office.


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## Guest (Mar 7, 2011)

I got references for this company from 2 banks. They also have a branch in Greece. All hs gone very smooth.
And I think Veronica is right. It is good that the company is Cyprus owned

Anders


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## Guest (Mar 7, 2011)

Very interesting, thanks 



Vegaanders said:


> Its not that easy as many say


Well I think those who says it's easy are referring to signing up as sole proprietor, when it comes to a proper company I've never heard of anyone daring to do it themselves! 

Thanks for the URL, that company seems very good price, most companies I can find states figures between €2500-3500 to get started so assuming there's no huge extra fee somewhere then €450-750 sounds great!

I'm thinking of extending my Cyprus apartment lease for another winter, however that would mean that when my next product comes out I would probably be located in Cyprus so I'm loosely looking into what that would mean business/tax-wise, 
it's good to hear that someone in the internet-based-business has done it without coming back saying "Run.. run for your life!" 

I was first a bit intimidated seeing rules like "you have to have a secretary" etc but now I'm starting to see that that stuff is all included in services like the one you mentioned.
I guess my worry now is mostly if the residency-permit is going to be a issue, as I don't have one now and since I don't have residence in any other country either that might complicate paperwork, but I'm thinking of applying for one for when I return to Cyprus for next winter-season altho I'm not quite sure if I will qualify for one, but I'll figure something out.



Veronica said:


> We were foolish enough to use a British company when we first started our business and they had no idea what they were doing and almost cost us a great deal of money.


Ouch, yeah I can imagine, thanks for the heads-up,
I've seen a lot of non-cypriot companies when searching online and I've noticed a pattern that many of them are mainly aiming for the "no visit to Cyprus necessary"-market so I can imagine even those who does know what they are doing are more expensive than the ones you can find in Cyprus who deals more with the normal person living here starting a company rather than the "newly rich brit trying a desperate attempt to escape UK taxes by setting up half-phony offshore companies".


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## ymg (Dec 19, 2009)

Which banks gave you this reference?




Vegaanders said:


> I got references for this company from 2 banks. They also have a branch in Greece. All hs gone very smooth.
> And I think Veronica is right. It is good that the company is Cyprus owned
> 
> Anders


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## Guest (Mar 7, 2011)

ymg said:


> Which banks gave you this reference?


Bank of Cyprus and Pireus Bank

Anders


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## Acestan (Mar 6, 2010)

*Self-employed in Cyprus*



Vegaanders said:


> We will be based around Paphos most likely. Our business is 100% webbased and all incomes come from abroad.
> 
> Anders


Hello Anders
Like you, my business is web-based, and income comes from UK via Smart Currency Exchange (Highly recommended). Let me know how you get on, as I am in the same predicament and would like to know the best route to go down. I have been here since November and not really done much work, as this house needed so much renovation it's taken up all my time.
Hope to get on with earning some money to pay for it all quite soon.
Did you manage to find a good accountant or tax-advisor?


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## mia100max (Feb 1, 2011)

Vegaanders said:


> We will be based around Paphos most likely. Our business is 100% webbased and all incomes come from abroad.
> 
> Anders


I too am self employed and work from home on the internet and all of my work originates from the UK. I am paid into a UK bank account. Am I liable for tax in Cyprus?


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