Under pressure from the EU, the attitude of Cypriot banks towards clients – legal entities and individuals – has become less liberal, new requirements and restrictions have appeared. However, if you follow them and if the client is ready for a certain level of transparency, it is still quite possible to open an account in Cyprus.
Bank Account in Cyprus: Difficult but Possible; A few years ago, opening a bank account in Cyprus practically did not cause any difficulties, and in the eyes of the inhabitants of Russia and other CIS countries, the island state has long gained popularity as one of the most understandable zones with relatively low taxes. However, in recent years the situation has changed. Nevertheless, it is still quite possible to open an account in Cyprus.
Opening an account for an individual – a non-resident of Cyprus
Regardless of whether a non-resident foreigner plans to obtain a residence permit and / or citizenship of Cyprus or he needs an account for some other reason, the bank will certainly require an explanation of the reason for opening an account in Cyprus. Also, in any case, you will need to document the legal origin of income. This can be done by providing, for example, a contract for the sale of real estate, extracts from the commercial register confirming the receipt of dividends, the sale of shares, etc., or a certificate of income received from the tax office of your country. In addition, it is necessary to confirm the address of permanent residence (the type of the corresponding document depends on the citizenship of the client).
As a rule, as a rule, non-residents who do not apply for a residence permit come to Cypriot banks in order to open a savings or investment account to accumulate funds. Such clients (especially if the deposit amount is at least 300,000 euros) can count on a fairly liberal treatment, since they are usually not active and, therefore, do not bear risks for the bank.
Opening an account for an individual – a resident of Cyprus
Usually, opening a personal account for a resident of Cyprus (or someone who is going to become one) is not difficult. The bank asks for the original passport, fresh (issued no earlier than 6 months before submission) original documents confirming the address of permanent residence (proof of address) in Cyprus. If it is a first invoice, and the foreigner is in the process of obtaining a residence permit or citizenship on the basis of the purchase of real estate, such confirmation may be the contract of sale of the relevant object. If a person already has a connection with the island state, the bills for the Internet, telephone, electricity or an extract from another Cypriot bank will also work, since the address of residence will be indicated there.
You will also need to explain the origin of the income.
Opening an account for a legal entity
The struggle for the transparency of money and business in general has reached Cyprus. In 2018, under pressure from the EU, the central bank of the island state banned local banks from servicing the accounts of legal entities with signs of shell companies (they are also shell companies, shell companies).
In particular, if a company is not physically present in the country where it is registered (i.e. there is neither a real office nor a governing body), it is very likely to be classified in this category and denied service. The same will happen if the company cannot prove its economic value and real activity with documents in hand.
There are also some exceptions. For example, if a company has one of the characteristics listed above, but it is established as a shareholder of capital or shares in some real business with identifiable beneficiaries or to own intellectual property, tangible and intangible assets, etc., it may be considered for admission to Cypriot bank.
In general, Cypriot banks, for obvious reasons, are much more willing to serve clients with a Cypriot registration or at least a physical presence in the country (for example, in the form of an office with real employees) and / or business activities here (i.e. we have a partner in Cyprus, here she conducts trading activities.
When opening the first account in Cyprus, a company, especially a foreign one, firstly, will have to prove the legality of its own income (for example, by providing contracts with partners, customers, etc.) and the income of its owners – to make sure that the beneficiary is real, and not “dummy” . If the company is new and does not yet have concluded agreements, the bank may require to show a business plan and / or agreements with potential partners. If the company is already operating in other countries, opening an account in Cyprus may require a letter of recommendation from the bank where it has an account.
If a legal entity registered in Cyprus with a history of economic activity wants to open a new account, the bank will request from it:
- office lease agreement and utility bills;
- documents confirming that the business is real (contracts, invoices);
- financial report.
As in the case of a foreign client, the bank will also be sure to request documents confirming the relationship of the declared owner with the company in order to exclude the possibility of a nominal owner.
It is worth considering that if a company is registered in a country where there is no requirement for mandatory accounting and it does not keep this account on its own, or if it is registered in one of the territories included in the “black lists” of the EU, OECD and other international organizations, it they will refuse to open an account even if, according to other signs, it passes “face control”.
Our partners from PR Special Pro are ready to provide the necessary advice on residence permits and citizenship in different countries of the world, registration of foreign companies and opening bank accounts.