Most people choose an offshore company the way tourists choose a restaurant: by the photo on the door.
General information, not legal or tax advice. Every structure depends on your specific facts; ENCC connects you with licensed advisers who confirm it in writing. The figures below are illustrative and are not a promise of tax savings.
The first week in Limassol tends to follow a script. You sign the lease, open the bank account, book the appointment for your tax identification number. Then, over coffee at the marina, someone explains with total confidence that he pays nothing because he has "a Wyoming LLC". Somebody else on a WhatsApp group swears that the Marshall Islands are the only serious answer. A third person sells Seychelles companies from a laptop. By Friday you have heard of five jurisdictions, three formation agents and not a single tax adviser.
This guide is written for that Friday. It is not here to sell you a jurisdiction. It gives you the whole map: what each structure actually does, what you pay for to run it, where the Cyprus Tax Department can catch you, where Germany can catch you if you are leaving from there, and how the numbers work out for five founders who chose differently. At the end there is a list of the mistakes we see most often and answers to the questions clients ask us in the first call.
One point up front. An offshore company is neither illegal nor suspicious in itself. It is simply a company incorporated somewhere you do not live. The problem is never the company. It is the gap between the paperwork and reality. Almost every structure that falls apart in an audit falls apart in exactly that gap: the documents say the company is run from Victoria, Mahé, while the emails, signatures and decisions come from a flat in Larnaca.
Part 1. The starting point: what Cyprus gives you, and what it does not
To see why people combine Cyprus with a foreign company, you first need to understand the personal regime you get in Cyprus.
Tax residence
You become Cyprus tax resident either through the classic test of more than 183 days in Cyprus in a calendar year or through the 60-day rule. The 60-day rule is not automatic. It requires, cumulatively, that you spend at least 60 days in Cyprus, that you do not spend more than 183 days in any other single state, that you maintain a permanent home in Cyprus (owned or rented), and that you carry on a business, are employed, or hold an office as director of a Cyprus company at any time in the year, without that link being terminated during the year. A plan built on "I'll spend 60 days and that's it" without the other conditions is not Cyprus residence at all.
Non-Dom status
If your domicile of origin is not Cyprus, which is true for almost every newcomer from the UK, Germany, Romania or elsewhere, you are treated as non-domiciled until you have been Cyprus tax resident for 17 of the last 20 years; from then on you are deemed domiciled. The headline effect: 0% SDC on dividends and interest for Non-Dom. SDC, the Special Defence Contribution, is the Cyprus levy that hits dividends and interest for domiciled residents. Dividends are also exempt from income tax. What remains is the GESY healthcare contribution of 2.65%, capped on income of EUR 180,000 a year.
What Non-Dom does not do: it does not exempt salary, self-employment income, profit from a business you carry on personally, or rent from progressive income tax, which rises to 35%. It does not exempt your company from corporate tax. It does not erase your obligations in the country you are leaving. Non-Dom is a regime for dividends and interest, not a blanket exemption.
The Cyprus company
From 1 January 2026 the Cyprus corporate income tax rate is 15% (Law 244(I)/2025). Older articles quoting a lower rate are out of date for 2026. A Cyprus Ltd with EUR 100,000 of profit therefore pays EUR 15,000 in corporate tax, and the rest can reach you as a dividend with 0% SDC for Non-Dom and 2.65% GESY.
That is where the offshore temptation comes from. If the company sat in a jurisdiction with no corporate tax, or territorial taxation, and the dividend still went to a Non-Dom, the 15% seems to disappear. The rest of this guide explains why "seems" is the key word.
Part 2. The three levers that decide everything
Every structure, however exotic, comes down to three questions. Understand them and you can judge any pitch you hear at the marina yourself.
Lever 1: where the company is managed
Cyprus treats as tax resident any company whose management and control is exercised in Cyprus, wherever it is registered. The test looks at substance: where strategic decisions are taken, where board meetings are held, who signs the important contracts, where banking instructions come from, where the directors live. A Seychelles company whose sole director is you, living in Limassol, is almost certainly a Cyprus company for tax purposes. It owes 15% in Cyprus, plus interest and penalties for every year that was not declared.
For the company to stay genuinely foreign you need a real director outside Cyprus who actually takes decisions and answers for them, board meetings held and minuted outside Cyprus, and a signing flow that reflects this. A "nominee" who signs whatever you send within ten minutes will not survive a serious enquiry.
Lever 2: who owns the company
The Cyprus controlled foreign company (CFC) rules, introduced in 2019 to implement the EU Anti Tax Avoidance Directive (ATAD), apply to a Cyprus tax resident company that controls a low taxed foreign entity. They attribute the foreign entity's undistributed income to the Cyprus company. They do not attribute profit to an individual. So a Seychelles company owned directly by you as a person does not fall under the Cyprus CFC rules. The same company held through a Cyprus Ltd can.
The absence of an individual CFC rule in Cyprus does not mean the absence of risk. Lever 1 (management) and permanent establishment (Part 4) apply in full.
Lever 3: how the money reaches you
Money can reach you as a dividend, a salary, a director's fee, a loan or, for a transparent entity, directly as business income. Each has its own treatment. A Non-Dom's dividend carries 0% SDC and 2.65% GESY. Salary and fees go into progressive income tax and social insurance. A loan from your own company that is never repaid can be recharacterised. Most sound structures are built around a clean dividend, declared by a proper resolution, out of real profit.
Part 3. The five structures, one by one
1. US LLC (Wyoming, New Mexico, Delaware)
A US LLC owned by a non-US person with no US trade or business generally pays no US federal income tax, because the IRS treats a single member LLC as a disregarded entity. The profit "flows" to the owner for tax purposes. That does not mean nobody taxes it. It means the question moves to your country of residence.
Cyprus has no published Tax Department circular on how it classifies a US LLC, and advisers split. Many treat a single member LLC as transparent, so the profit is your own business income taxed at progressive rates. Others treat it as an opaque foreign company, so distributions can be dividends (0% SDC for Non-Dom). Plan on the transparent reading, which is the safer base case, and if you want the opaque reading, get a written opinion from a Cyprus tax adviser that cites the LLC's operating agreement (separate legal personality, limited liability, management by managers, distributions only by resolution) and keep that opinion with your return.
US obligations: Form 5472 with a pro forma Form 1120 every year, even with no US income. The penalty for failing to file is USD 25,000. Beneficial ownership reporting to FinCEN no longer applies to companies created in the United States after the 2026 final rule.
Wyoming LLC at a glance
One-off costs: the state filing fee for the Articles of Organization, a formation service if you use one, obtaining the EIN from the IRS
Annual costs: the state annual report license tax, the registered agent, an accountant to prepare Form 5472 and the pro forma 1120, optionally a business address
Banking: Mercury, Wise Business, Relay, Stripe US; the easiest banking of any structure here
Fits: US customers, SaaS, ecommerce on Stripe and Amazon US
Main risk: Cyprus taxing the profit as your business income at progressive rates
New Mexico requires no annual report; Delaware charges a flat annual franchise tax and carries more weight with investors. For a solo founder without investors, Wyoming or New Mexico are the usual choices.
2. Seychelles IBC
A Seychelles International Business Company is an opaque company with its own legal personality that issues shares and pays dividends. Since the Business Tax (Amendment) Act 2020, Seychelles taxes on a territorial basis: foreign source income of a company that is not part of a multinational group and has no activity in Seychelles is in principle exempt, while Seychelles source income is taxed at 15% or 25%. Confirm the exact position with Seychelles counsel, because the multinational group and economic substance rules (Schedule 11) have details that matter.
Seychelles is no longer on the EU list of non-cooperative jurisdictions. It left Annex II in February 2026 and is on neither annex in the Council conclusions of 9 October 2026. That matters for the Cyprus defensive measures in Part 4.
Seychelles participates in CRS. A company account at a bank or EMI in another CRS state is reported to the state where you are resident, which is Cyprus. Assume the Cyprus Tax Department will know about the company and the account, and declare everything.
Seychelles IBC at a glance
One-off costs: incorporation through a licensed agent, constitutional documents, apostilles
Annual costs: registered agent, government licence fee, record keeping and the annual return
Biggest recurring cost: a real director outside Cyprus, paid according to how involved they are
Banking: harder; European EMIs and some banks in Switzerland, Mauritius or Asia; a strong KYC file is essential
Fits: remote services, global clients, founders who want a clean dividend to a Non-Dom
Main risk: effective management from Cyprus and a permanent establishment in Cyprus
3. Marshall Islands LLC or corporation
The Marshall Islands (RMI) are known for one of the world's largest ship registries and, more recently, for DAO LLCs. The regime for non-resident entities does not tax income earned outside the RMI. Corporate law closely follows Delaware, which gives legal predictability.
An RMI LLC faces the same Cyprus classification uncertainty as a US LLC; an RMI corporation is clearly opaque. The RMI participates in CRS (Ministry of Finance announcement, August 2025) and is not on the EU list as of October 2026. RMI economic substance rules raise their own questions for pure service companies, which you clear with the agent.
Marshall Islands at a glance
One-off costs: formation through the registry's authorised agent, constitutional documents
Annual costs: the registry's annual fee, registered agent, economic substance reporting where it applies
Banking: the hardest of all; many banks and EMIs decline RMI entities
Fits: ship holding, crypto and DAO structures, pure holding
Main risk: management from Cyprus, banking, uncertain classification for LLCs
4. Wyoming LLC owned by a Seychelles IBC
The combination tries to take the best of both. The US LLC collects US payments (Stripe US, Amazon, American clients) and enjoys easy banking, while the Seychelles IBC, as the LLC's owner, is an opaque company that pays a clear dividend to a Non-Dom.
For the IRS, a single member LLC with a foreign corporate owner generally stays disregarded, and Form 5472 obligations remain. Further filings can arise depending on the facts. In Seychelles the question is whether owning the LLC makes the IBC part of a multinational group under Schedule 11, which would change the treatment of foreign income. Get a letter from Seychelles counsel on exactly this point before you build.
Wyoming under Seychelles at a glance
One-off costs: two incorporations, plus the Seychelles counsel letter on the group question
Annual costs: compliance in both jurisdictions, the US accountant, the IBC's real director
Fits: meaningful US revenue combined with the wish for dividend treatment
Main risk: two compliance regimes, the Seychelles group question, plus the same management and permanent establishment risks
5. Cyprus Ltd
The option many people skip because it does not sound exotic. You pay 15% corporate tax, then the dividend reaches you with 0% SDC for Non-Dom and 2.65% GESY. You have a European company with a European bank account, access to Cyprus's double tax treaties and the EU directives, and no effective management question, because the company really is run from Cyprus.
Cyprus Ltd at a glance
One-off costs: the lawyer who registers the company, registry fees, registered office
Annual costs: bookkeeping, the mandatory statutory audit, company secretary, the annual levy to the registrar, tax returns
Banking: Cyprus banks and European EMIs, the simplest KYC for a Cyprus resident
Fits: founders who want peace of mind, European clients, a residence file built on a company
Main risk: only the cost of 15% on profit
A Cyprus Ltd can also support your residence: holding office as director of your own Cyprus company is one of the activities accepted for the 60-day rule, and for non-EU nationals the company can support a residence and work permit application, subject to the immigration rules that apply at the time.
Part 4. Cyprus tax risks in detail
Management and control
The practical point: the Cyprus Tax Department can ask for board minutes, correspondence with the director, banking access logs, contracts and who negotiated them. If all that exists is a resolution signed once a year by a nominee who does not know what the company does, the conclusion will be that you run the company from Cyprus. The result: 15% on the whole profit, plus interest and penalties for every open year.
CFC rules (since 2019, based on ATAD)
They apply to Cyprus resident companies that, alone or with associated persons, control more than 50% of a foreign entity whose actual tax paid is less than half of what it would have paid in Cyprus. Undistributed income arising from non-genuine arrangements is added to the Cyprus company's tax base. In practice: put an IBC under a Cyprus Ltd and you must think about CFC. Hold it personally and the Cyprus CFC rules do not apply, but every other risk stays.
Defensive measures against EU-listed jurisdictions
Cyprus applies withholding tax on dividends, interest and royalties paid by Cyprus companies to affiliated companies resident in jurisdictions on Annex I of the EU list (or incorporated there and resident nowhere). The list changes twice a year. As of October 2026 Annex I contains American Samoa, Anguilla, Guam, Palau, Russia, the Turks and Caicos Islands, the US Virgin Islands and Vanuatu. Seychelles and the Marshall Islands are on neither annex. That can change; check the list before any significant payment between companies.
SDC and GESY
For Non-Dom: 0% SDC on dividends and interest. GESY at 2.65% still applies to dividends, capped on total income of EUR 180,000. Non-Dom status has to be claimed and documented; it is not granted automatically just because your income comes from abroad.
Permanent establishment
An online business can have a permanent establishment in Cyprus. If from your home office in Limassol you habitually negotiate and conclude the foreign company's contracts, or your home effectively functions as the company's fixed place of business, the profit attributable to that permanent establishment is taxed in Cyprus at 15%. There is no magic threshold below which an online business "has no" permanent establishment. What lowers the risk: signing authority with the director abroad, standard terms accepted online where the model allows it, and a written services agreement at arm's length between you and the company, which you declare in Cyprus as your own income.
Part 5. German tax risks, if you are leaving Germany
A large share of people moving to Cyprus come from Germany or have worked there. Germany has the strictest set of departure rules in Europe, and ignoring them is the most expensive mistake in this whole guide.
While you are still German tax resident
The German CFC rules (Hinzurechnungsbesteuerung, §§ 7 to 14 AStG) can attribute the passive income of a low taxed foreign company you control (below 15% effective tax) directly to you as an individual. Unlike Cyprus, Germany applies these rules to individuals. Set up the IBC six months before the move and those first months can already be "German".
And if the foreign company is effectively managed from Germany (Ort der Geschäftsleitung, § 10 AO), it becomes fully liable to German corporate and trade tax. Germany does not look at the registered office; it looks at where decisions are taken.
The clean sequence: leave Germany first (deregistration, home given up or let to third parties, centre of vital interests moved), then set up the structure.
Exit tax (§ 6 AStG)
If you hold at least 1% at any time in the last 5 years in a corporation (GmbH, AG or comparable foreign company) and were fully German tax resident for at least 7 of the last 12 years, leaving is treated as a deemed sale: you pay tax on the latent gain without having received anything. On application the tax can be paid in 7 annual instalments. A GmbH valued at EUR 500,000 with paid-in capital of EUR 25,000 can trigger exit tax well above EUR 100,000 (gain of EUR 475,000, 60% taxable under the partial income method, at your personal rate). Plan this with a Steuerberater years in advance, not weeks.
Extended limited tax liability (§ 2 AStG)
German nationals who were unlimited taxable in Germany for at least 5 of the last 10 years, move to a country with low taxation (a preferential regime such as Cyprus Non-Dom can count) and keep essential economic interests in Germany can face § 2 AStG extended limited tax liability in the year of departure and the following 10 years. Essential economic interests include German source income above 30% of total income or above EUR 62,000, German assets above 30% or above EUR 154,000, or a German business or a § 17 EStG holding. The rule does not bite in a year where the affected income stays at or below EUR 16,500. Map these tests with a Steuerberater before the move.
§ 5 AStG extends the effect to interposed foreign companies: income that would have been caught under § 2 does not escape simply by passing through an IBC. More on leaving Germany in Germany to Cyprus, step by step.
Part 6. Five people, five structures: cases with numbers
The people are fictional. The numbers are simplified and illustrative: one Non-Dom, no other income, all profit distributed in the same year. The calculations show taxes, not service prices. They are not offers or promises of savings.
James, 34, freelance developer, formerly Manchester
Business: software development for two clients in Germany and the Netherlands
Annual profit: EUR 90,000
Temptation: a Seychelles IBC
Problem: he works alone, negotiates and signs from Limassol and has nobody real abroad; the IBC would be managed from Cyprus and have a permanent establishment there
Right choice: Cyprus Ltd
Tax, approximately: EUR 13,500 corporate tax (15%), then about EUR 2,000 GESY on the dividend; the company's annual administration comes on top
Lesson: for a consultant who is the only person in the company, an offshore structure does not hold; the Cyprus Ltd is cheaper than a dispute
Sofia, 41, SaaS founder with American customers, formerly Lisbon
Business: B2B software sold through Stripe, 70% US customers
Annual profit: EUR 150,000
Choice: Wyoming LLC owned by a Seychelles IBC, with a professional director in Seychelles who approves the budget and major contracts quarterly
Why: she needs Stripe US and Mercury; sales are automated through terms accepted online, so she does not sign sales contracts
What she adds: a services agreement with the IBC for her product work, EUR 40,000 a year, declared in Cyprus at progressive rates
What she pays each year: compliance in two jurisdictions and the director, progressive tax on the EUR 40,000, GESY on the dividend
Lesson: the structure works only because part of the income is honestly treated as her own work in Cyprus and because there is real management outside Cyprus
Markus, 46, German national, formerly Munich
Business: marketing agency run through a GmbH with an estimated value of EUR 800,000
Temptation: move, close the GmbH and run everything through a US LLC
Problem: § 6 AStG on departure for the GmbH, then § 2 AStG if he keeps the let flat in Munich and German income above the thresholds
Right choice: a two year plan with a Steuerberater: valuation of the GmbH, a decision on sale or transfer before departure, then a Cyprus Ltd once residence is solid
Lesson: for Germans, the problem is not the company in Cyprus or Seychelles but what they leave behind in Germany
Hannah, 38, private investor, formerly London
Business: a EUR 1.2 million portfolio of shares and bonds
Temptation: a Marshall Islands corporation "for protection"
Reality: as a Non-Dom, dividends and interest she receives directly already carry 0% SDC; gains on selling shares are generally not taxed in Cyprus (with exceptions, for example for Cyprus real estate)
Right choice: personal holding, a European brokerage account, no company
Lesson: sometimes the best structure is none; a company adds cost and reporting without benefit
Daniel, 29, crypto trader and DAO founder, formerly Tel Aviv
Business: a DeFi protocol with contributors in five countries
Choice: a Marshall Islands DAO LLC for the protocol, with real on-chain governance; his personal gains declared separately in Cyprus
Problem: almost no conventional banking for RMI; he uses crypto infrastructure and a specialised EMI
Lesson: RMI fits when the entity really has several members and decentralised governance, not as a disguised personal company
Part 7. Tax on EUR 100,000 of profit (illustrative)
Cyprus Ltd: EUR 15,000 corporate tax (15%), then about EUR 2,250 GESY (2.65%) on the EUR 85,000 dividend; 0% SDC for Non-Dom. Around EUR 17,250 in tax and contributions in total.
Single LLC, if Cyprus treats the profit as your business income: progressive income tax with a 35% top marginal rate, plus self-employed social insurance and GESY; usually the heaviest burden of all the options.
Seychelles IBC with a real board abroad and no permanent establishment in Cyprus: about EUR 2,650 GESY on the dividend; 0% SDC for Non-Dom.
Wyoming LLC under a Seychelles IBC, under the same conditions: likewise about EUR 2,650 GESY on the dividend.
Assumptions: one Non-Dom, all profit distributed in the same year, no other income, no permanent establishment in Cyprus and genuine management outside Cyprus for the offshore options. The figures show taxes and contributions only; the cost of running the structure (the real director, agents, accounting in two jurisdictions) comes on top and is much higher for the offshore options than for the Ltd. If the management and permanent establishment assumptions fail, the offshore options owe the same 15% in Cyprus, plus interest and penalties, plus the cost of a structure that bought nothing. This is not an offer and not a promise of savings.
Part 8. Which structure, when
You are the only person in the business and you work from Cyprus
Usual choice: Cyprus Ltd
Why: realistically, any foreign company would be managed from Cyprus
US customers, Stripe US, American banking
Usual choice: US LLC (Wyoming, New Mexico, Delaware)
Watch out: Cyprus classification is not settled: plan on the profit being taxed as your business income unless a Cyprus adviser confirms dividend treatment in writing
Remote services, global clients, you want dividend treatment
Usual choice: Seychelles IBC held personally, board outside Cyprus
Watch out: harder banking; management must be genuinely abroad
Holding, shipping, crypto, DAO
Usual choice: Marshall Islands LLC or corporation
Watch out: weakest banking; active CRS reporting
You want US payments and a dividend
Usual choice: Wyoming LLC owned by a Seychelles IBC
Watch out: Two jurisdictions of compliance; get a Seychelles counsel letter on whether owning the LLC makes the IBC part of a multinational group under Schedule 11
You only have personal investments
Usual choice: no company, personal holding as a Non-Dom
Watch out: check the exceptions for real estate and the source country of your dividends
Part 9. Step by step: building it properly
Residence first. Close your tax residence in the country you are leaving and document it. Get your Cyprus tax number, Non-Dom status and, after the first year, a tax residence certificate.
The fact sheet. Write one page: who your clients are, where they are, who negotiates, who signs, who delivers, how they pay. Without it every adviser gives you a generic answer.
The tax opinion. Ask a Cyprus tax adviser for a written opinion on the chosen structure covering management, permanent establishment, classification (for an LLC) and CFC (if a Cyprus Ltd is involved). Leaving Germany? Add an opinion from a Steuerberater on §§ 2, 6 and 7 AStG.
The director. For offshore options, choose a real, experienced director who receives reports, asks questions and can say no. Put in writing which decisions are theirs.
Incorporation. Through a licensed agent in the jurisdiction. Keep the constitutional documents, share register and operating agreement (for an LLC) on file.
Banking. Open the account in the company's name with signing mandates that match the governance. State your Cyprus residence correctly in KYC; the account will be reported under CRS.
Your contract with the company. If you work for the company, sign an arm's length services agreement and declare the income in Cyprus.
The annual calendar. Minuted board meetings, financial statements, filings in the jurisdiction, Form 5472 for US LLCs, your Cyprus return with dividends and GESY.
The annual review. The EU list, Cyprus rules and German rules change. Review the structure every year.
Part 10. The file that protects you in an audit
An audit does not start with "which jurisdiction did you choose?" It starts with "show me". The difference between a structure that holds and one that collapses almost always shows in the file. Here is what should exist, in order, for every year.
The company file
Constitution: certificate of incorporation, articles or operating agreement, register of shareholders or members
Governance: board minutes with place, date, attendees and decisions, plus the papers discussed
Contracts: with clients, suppliers and your own services agreement, with evidence of who negotiated and signed them
Finance: annual financial statements, bank statements, invoices, dividend resolutions
Compliance: returns filed in the company's jurisdiction, Form 5472 for US LLCs, agent confirmations
Your personal file
Residence: Cyprus lease or title deed, tax residence certificate, a log of days spent in each country
Departure: proof of deregistration in your home country and, for Germany, the Steuerberater's analysis of §§ 2 and 6 AStG
Opinions: the Cyprus adviser's written opinion on your structure
Returns: your Cyprus return showing dividends, GESY and the income from your services agreement
A file like this costs little to keep current if you keep it from day one. Rebuilt three years later at an inspector's request, it costs a great deal and convinces nobody. Our rule: if an important decision has no written trace showing where and by whom it was taken, for the tax authority it was taken where you live.
One more detail that makes the difference is correspondence. If the director abroad receives monthly reports, asks questions, requests clarification and sometimes says no, you have real governance. If the only emails say "please sign the attached", you have a façade, and it shows immediately.
Part 11. The mistakes we see most often
You are the director. A Seychelles company with you as sole director, living in Cyprus, is a Cyprus company for tax purposes.
Company before departure. Set up while you are still resident in Germany or the UK, the company can be caught by the rules of the country you are leaving.
"Nobody reports anything." CRS reports accounts; FATCA reports US ones. Declare everything.
Ignoring permanent establishment. A laptop is no excuse: what matters is where contracts are negotiated and concluded.
Dividends without a resolution. Transfers from the company account to your personal account, with no dividend resolution and no accounts, can be recharacterised as your income.
Calculating with an outdated rate. For 2026 the Cyprus corporate tax rate is 15%.
Forgetting Form 5472. A USD 25,000 penalty for a two page form.
The 60-day rule without the conditions. Without a permanent home, activity in Cyprus and no more than 183 days in any other single state, you are not Cyprus resident.
The GmbH left behind in Germany. § 6 AStG on departure, then § 2 AStG for ten years.
Structures copied from WhatsApp groups. What works for an Amazon seller with US customers does not work for a consultant with German clients.
Part 12. Frequently asked questions
Is it legal to own an offshore company as a Cyprus resident?
Yes. What matters is that you declare it, manage it where you say it is managed and pay the tax due on your personal income from it.
Do I pay nothing at all if I have a Seychelles IBC and Non-Dom status?
Not automatically. If the IBC is genuinely managed outside Cyprus and has no permanent establishment there, the dividend to you carries 0% SDC for Non-Dom, but you pay 2.65% GESY and the cost of the structure, and any work you do for the company is taxed in Cyprus. If the IBC is managed from Cyprus, it pays 15% in Cyprus.
Is a US LLC transparent or opaque in Cyprus?
There is no published official position. Plan on the transparent reading, with the profit taxed as your business income, and rely on the opaque reading only with a written opinion from a Cyprus adviser.
Can I be the director of my offshore company?
Formally, yes. For tax, if you live in Cyprus and take decisions there, the company becomes Cyprus tax resident. The real director has to be outside Cyprus.
Do the Cyprus CFC rules apply to my Seychelles company?
Not if you own it personally: Cyprus CFC applies to Cyprus resident companies. If you hold it through a Cyprus Ltd, they can.
Can an online business have a permanent establishment in Cyprus?
Yes. If you habitually negotiate and conclude contracts from Cyprus, or your home is effectively a fixed place of business, the attributable profit is taxed in Cyprus at 15%.
Which bank will open an account for a Seychelles IBC?
It depends on the profile. European EMIs and some banks in Switzerland, Mauritius or Asia accept IBCs with a good KYC file: real activity, identifiable clients, documented source of funds. No account opening is guaranteed.
Will the Cyprus Tax Department learn about my offshore company?
Assume yes. Seychelles and the Marshall Islands participate in CRS, and the company's accounts are reported to your state of residence. Declare everything.
I am not German. Does § 2 AStG affect me?
No, unless you also hold German citizenship. But the German CFC rules and exit tax (§ 6 AStG) can apply to anyone who was tax resident in Germany, regardless of citizenship.
I am leaving the UK. Is there anything similar?
The UK has its own temporary non-residence rules, under which certain gains and distributions received while abroad can be taxed on return if you come back within five years. Check this with a UK adviser before taking large dividends or disposals early in your Cyprus years.
Is Cyprus on any blacklist?
No. Cyprus is an EU member state and is not on the EU list of non-cooperative jurisdictions.
Are Seychelles and the Marshall Islands on the EU blacklist?
No, as of October 2026 they are on neither annex. Seychelles left Annex II in February 2026. The list is reviewed twice a year.
What does an offshore structure realistically cost each year?
Think in components, not one number. One-off: incorporation, documents, possibly apostilles and the tax opinion. Annual: registered agent and government fees in the jurisdiction, bookkeeping and filings (including Form 5472 for US LLCs), a real director for an IBC, plus your Cyprus adviser. For offshore options the largest component is almost always the real director; for a Cyprus Ltd, bookkeeping and audit. Get written quotes before deciding.
Is an offshore structure worth it below EUR 50,000 profit?
Rarely. The annual cost of a real director and foreign compliance eats a large share of the tax difference, and the risk remains. Below that level a Cyprus Ltd or plain self-employment is usually more rational.
Can I change the structure later?
Yes, by redomiciliation where the jurisdictions allow it, or by liquidation and re-incorporation. Each change has its own tax consequences; plan them with your adviser.
The detailed guides
The ENCC view
There is no perfect jurisdiction, only the one that fits your clients, your payments, your residence file and your patience with paperwork. After many conversations with founders moving to Cyprus, our conclusion is simple: the structures that last are the ones where the paperwork matches reality. Someone working alone from Limassol usually needs a well run Cyprus Ltd, not an island in the Indian Ocean. Someone with American customers, a team and a real director abroad can put an LLC or an IBC to good use. And anyone leaving Germany starts with what they leave behind, not with what they set up.
ENCC prepares your fact sheet, helps you ask the right questions and connects you with licensed formation agents and tax advisers in Cyprus, in Germany and in the chosen jurisdiction.