GoFuckYourself.com - Adult Webmaster Forum - View Single Post - So what's the deal with all those companies being registered in Cyprus?

Nathan · 10-15-2012, 12:45 AM

This is not to be considered any tax advise, there are just a bunch of half-truths in this thread which confuse people and insinuate things...

1) Cyprus tax wise is good for two reasons: a) 10% corp tax, b) 17% VAT (15% is lowest in europe)

2) EVERY COMPANY in the world has to pay VAT for transactions with european customers! It is better to have a company based in europe which do transactions with european customers since you can then optimize VAT. Anyone that thinks they do not have to pay VAT: do not come crying about getting into trouble with the authorities in europe when your company works out well and gets too big for them to overlook it.

3) There is much more to tax optimization than a single company in a single jurisdiction. Americans with a company in Cyprus for example did absolutely nothing to optimize taxes, all you are most likely doing is evading them.

4) Manwin is in the middle of yet another restructuring which happens regularly since the structure needs to be optimized after each acquisition. We are phasing out Cyprus and moving those operations to Dublin because even though Dublin has considerably higher VAT and considerably higher corp taxes than Cyprus, as a whole in the structure Dublin is better because Ireland has better tax treaties with the US.

5) Banking is no reason to stay in Cyprus, at least not for our industry. It might be easy to get an account when small, but at a certain size you can not. 95% of Manwin's bank accounts are located in Germany, because Germany's banking system is very robust, very good technically for interfacing to it and the rates for international wires are very favorable also.

6) Although this does not fit this thread 100%, but since I talked about bank accounts above and people have claimed things regarding Manwin and Austria in regards to bank accounts: We have 0 direct operations in Austria, neither a company nor bank accounts. The reason you find filings in Austria regarding M&A transactions simply is because under Austrian law we have to file there, even as a foreign entity. That's simply how M&A works and there is no conspiracy there.
Any transaction we do, unless it is very small, HAS to be filed in Austria _BEFORE_ we can do it or we break Austrian law and risk having the transaction invalidated in Austria. Which, considering we have no operations there might not matter right now, but THINK AHEAD. Who knows what happens in the future, you do not want to have a problem in a jurisdiction you might have to go into at some point!

Tax optimization and company structure is not to be taken lightly! It is rather complex and complicated and should not be done by an ACCOUNTANT, but by a real legal tax specialist and likely by more than one.

Have fun.

10-15-2012, 12:45 AM
Nathan Confirmed User Industry Role: Join Date: Jul 2003 Posts: 3,108	This is not to be considered any tax advise, there are just a bunch of half-truths in this thread which confuse people and insinuate things... 1) Cyprus tax wise is good for two reasons: a) 10% corp tax, b) 17% VAT (15% is lowest in europe) 2) EVERY COMPANY in the world has to pay VAT for transactions with european customers! It is better to have a company based in europe which do transactions with european customers since you can then optimize VAT. Anyone that thinks they do not have to pay VAT: do not come crying about getting into trouble with the authorities in europe when your company works out well and gets too big for them to overlook it. 3) There is much more to tax optimization than a single company in a single jurisdiction. Americans with a company in Cyprus for example did absolutely nothing to optimize taxes, all you are most likely doing is evading them. 4) Manwin is in the middle of yet another restructuring which happens regularly since the structure needs to be optimized after each acquisition. We are phasing out Cyprus and moving those operations to Dublin because even though Dublin has considerably higher VAT and considerably higher corp taxes than Cyprus, as a whole in the structure Dublin is better because Ireland has better tax treaties with the US. 5) Banking is no reason to stay in Cyprus, at least not for our industry. It might be easy to get an account when small, but at a certain size you can not. 95% of Manwin's bank accounts are located in Germany, because Germany's banking system is very robust, very good technically for interfacing to it and the rates for international wires are very favorable also. 6) Although this does not fit this thread 100%, but since I talked about bank accounts above and people have claimed things regarding Manwin and Austria in regards to bank accounts: We have 0 direct operations in Austria, neither a company nor bank accounts. The reason you find filings in Austria regarding M&A transactions simply is because under Austrian law we have to file there, even as a foreign entity. That's simply how M&A works and there is no conspiracy there. Any transaction we do, unless it is very small, HAS to be filed in Austria _BEFORE_ we can do it or we break Austrian law and risk having the transaction invalidated in Austria. Which, considering we have no operations there might not matter right now, but THINK AHEAD. Who knows what happens in the future, you do not want to have a problem in a jurisdiction you might have to go into at some point! Tax optimization and company structure is not to be taken lightly! It is rather complex and complicated and should not be done by an ACCOUNTANT, but by a real legal tax specialist and likely by more than one. Have fun. __________________ "Think about it a little more and you'll agree with me, because you're smart and I'm right." - Charlie Munger