04.3 Cryptocurrency in Cyprus

Cyprus, Non-Dom Status and Cryptocurrency

Crypto-transactions, the buying and selling of cryptocurrencies, are very popular in Cyprus. If you, however, regular make a profit from crypto-transactions, you should do this as a private person with Non-Dom status is Cyprus or by using a “Dividend-Company”, in order to not subject these profits to tax.

The “Dividend-Company” functions like an insurance

For those who wish to protect themselves against potential and unforeseeable legal changes in Europe both sustainably and effectively, the Non-Dom status in Cyprus is a great option. The Non-Dom status allows you to “transform” profits from crypto-transactions into tax-free dividends. Apart from a residence in Cyprus and the Non-Dom status, all you need is to set-up a “Dividend-Company”. And, guess what! The process is neither expensive nor bureaucratic!

Crypto-Transactions using a “Dividend-Company”

1. By using a “Dividend-Company”, crypto-transactions and any resulting profits are outsourced to a neutral company. Or, put differently: the profits from the buying and selling of cryptocurrencies are no longer a private “tax affair” but exclusively the business of the “Dividend-Company”.

2. Tax-freedom of the “Dividend-Company”. Provided that the “Dividend-Company” is registered at one of the offshore locations suited for this purpose, all profits made by the company are tax-free.

3. Dividends rather than profits from speculation. If the “Dividend-Company”, in which you, as a person with Non-Dom status in Cyprus, hold shares, makes a profit, you will be entitled to dividends.

4. Tax-free dividends from the “Dividend-Company”. Your dividends from the “Dividend-Company” are at your disposal at any time and, provided that you maintain your residence and Non-Dom status in Cyprus, these are tax-free.