Banks & Finances Cyprus

In Cyprus, foreigners can open accounts in various banks, however, conditions and requirements may differ. Some banks are more open to cooperation with non-residents, offering convenient conditions and services.

Banks loyal to foreigners

Alpha Bank Cyprus: Provides services to foreign clients, including account opening and loan issuance.

AstroBank: Focuses on working with international clients, offering a variety of banking products.

Cyprus Development Bank: Serves non-residents, providing account opening services and other financial products.

Eurobank Cyprus: Works with foreign citizens and international companies, providing a wide range of services.

Personal account: designed for everyday operations such as receiving salaries, paying bills, and shopping.

Account opening process

Choosing a bank: Both local and international banks operate in Cyprus. It is recommended to study the conditions of various banks and choose the most suitable one.

Gathering the necessary documents: Requirements may slightly vary between banks, but usually, the following documents are required:

- Valid passport or ID card.

- Proof of residence (e.g., a recent utility bill not older than 3 months).

- A reference letter from a previous bank confirming a good credit history (not older than 3 months).

- Income information (tax returns, income statements, etc.).

- A detailed CV.

Submitting an application: Some banks offer the option to apply online through mobile apps, where document scans and identity verification are required. However, in most cases, a personal visit to the bank branch is necessary to complete the process.

Reliability check: Banks conduct client verification in accordance with "Know Your Customer" (KYC) procedures and anti-money laundering measures, which can take from several days to several weeks.

Recommendations

Contact the selected bank in advance: Clarify the current requirements and procedures to prepare a complete document package.

Consider fees and charges: Pay attention to account service fees, transfers, and other services that may vary between banks.

Professional assistance: If necessary, contact a financial consultant or lawyer specializing in Cypriot banking law to accompany the account opening process.

Using ATMs

Availability: ATMs are widely available in Cyprus, especially in cities and tourist areas. Most of them accept international payment system cards such as Visa and MasterCard.

Fees: Cash withdrawals from a foreign card may incur fees. Your bank may set its own fees for international transactions. Some banks in Cyprus charge a fee for using their ATMs with foreign cards.

Restrictions: Some ATMs may have limits on the maximum withdrawal amount per transaction. It is recommended to clarify these limits in advance and, if necessary, conduct several transactions.

Alternative ways to get cash

CASHBACK service: Some stores and gas stations in Cyprus offer a CASHBACK service, allowing you to get cash when paying for purchases with a card. However, this service is usually only available for local bank cardholders.

Recommendations

Check bank conditions: Before traveling, check with your bank the conditions for using the card abroad, including fees and possible restrictions.

Choosing an ATM: It is preferable to use ATMs of large banks such as Bank of Cyprus or Hellenic Bank to reduce the risk of additional fees.

Currency exchange: Consider additional expenses when withdrawing euros due to currency conversion.

Bank transfers

SEPA transfers: If you are sending funds to countries in the European Economic Area in euros, you can use a SEPA transfer. Fees for such transfers are usually lower, and the execution period is 1–2 business days.

International SWIFT Transfers: To send money outside the EEA or in another currency, SWIFT transfers are used. Fees and durations depend on the bank and recipient country.

Payment Systems

Western Union and MoneyGram: These services allow for fast money transfers to almost any point in the world. Fees depend on the amount and direction of the transfer. Funds are usually available for receipt within minutes.

Online Payment Systems: Platforms like PayPal, Revolut, or Wise offer international transfers with competitive fees and convenient conditions. To use these services, you need to register an account and link a bank account or card.

Postal Transfers

Cyprus Post offers international money transfer services in cooperation with various partners. Fees and delivery times depend on the chosen service and destination country.

The optimal way to send money from Cyprus to another country depends on your individual needs, transfer urgency, and acceptable level of fees.

Loan Availability for Foreigners

Residents of Cyprus: Foreign citizens who permanently reside in Cyprus and have a confirmed income can qualify for standard credit products, including mortgages. Banks assess the applicant's solvency, their credit history, and income stability.

Non-Residents: For non-residents wishing to purchase property in Cyprus, special mortgage programs are available. However, after Brexit, some banks have limited or suspended lending to UK citizens.

Borrower Requirements

Documents: Passport, proof of residence, documents confirming income (such as tax declarations or employment certificates), and credit history.

Down Payment: A down payment of usually 20-40% of the property value is required.

Creditworthiness: Banks assess the borrower’s financial condition, considering their income, obligations, and credit history.

Mortgage Process

Selecting a Bank: It's recommended to study offers from various banks, such as Bank of Cyprus, Hellenic Bank, and Alpha Bank, to choose the most suitable conditions.

Application Submission: After collecting the necessary documents, a loan application is submitted. The bank evaluates the application, checks the documents, and makes a decision on granting the loan.

Property Valuation: The bank may require an assessment of the property being purchased to confirm its value.

Contract Signing: In case of approval, a loan contract is signed, and the funds are allocated for the property purchase.

Recommendations

Consultation with Professionals: Consult financial advisors or lawyers specializing in Cypriot law to get detailed information and support in the loan process.

Relevance of Information: Considering possible changes in banking policy and legislation, it is recommended to contact the selected banks directly to clarify the current lending conditions.

Property Payment

Cashless Settlement: Property purchases are usually made via bank transfer. This ensures transaction transparency and compliance with Cypriot anti-money laundering legislation.

Car Payment

Cashless Settlement: When purchasing a car, it is preferable to use a bank transfer or payment through a bank card. This provides documentary confirmation of the transaction and simplifies the vehicle registration process.

Cash Payment Limits

Transaction Limit: According to legislation, any transactions exceeding €10,000 using cash are considered illegal. This applies to both the purchase of goods and services and real estate acquisition.

Penalties for Violation: Breaking this rule results in a fine of 10% of the illegal transaction amount.

Recommendations

Consultation with Professionals: Before making large purchases, it is recommended to consult with a lawyer or financial advisor to ensure compliance with all legal requirements and protect your interests.

Documentary Evidence: Always maintain documents confirming the source of funds and the payment to avoid potential legal complications.

Bank Deposits

Time Deposits: Local banks offer time deposits with fixed interest rates for a specific term. For example, some banks offer deposits with increasing interest rates up to 4% per annum with a minimum deposit amount of €50,000 for an 18-month term.

Savings Accounts: Designed for regular savings with the possibility of adding and withdrawing funds. Interest rates are usually lower than time deposits but provide greater flexibility.

Investments in Stocks and Bonds

Stock Market: Investors can acquire shares of Cypriot and international companies through brokerage platforms. For beginner investors, it is recommended to consult a financial advisor to create a balanced portfolio.

Bonds: Government and corporate bonds provide the opportunity for fixed income with relatively low risk.

Investment and Exchange-Traded Funds

Mutual Funds: Offer diversified portfolios managed by professionals, which minimizes risks for investors.

Exchange-Traded Funds: Allow investing in a wide range of assets, including stocks, bonds, and commodities, with low costs.

Real Estate

Residential and Commercial Real Estate: Investments in real estate in Cyprus remain popular due to stable price growth and the possibility of rental income. Moreover, real estate investments can facilitate obtaining residency.

Alternative Investments

Cryptocurrencies: Despite high volatility, cryptocurrencies attract investors seeking high potential returns. It is recommended to exercise caution and thoroughly study the market before investing.

Investments in Startups: Cyprus is developing a startup ecosystem, providing opportunities for venture investments with high potential returns and associated risks.

Recommendations for Investors

Before making investment decisions, it is recommended to consult licensed financial advisors to develop an individual strategy that considers your goals and risk tolerance.

In the Republic of Cyprus, foreigners’ tax obligations depend on their tax residency status and sources of income.

Determining Tax Residency

An individual is considered a tax resident of Cyprus if they meet one of the following criteria:

183-Day Rule: Staying in Cyprus for one or more periods, totaling more than 183 days in a calendar year.

60-Day Rule: Staying in Cyprus for at least 60 days in a year while simultaneously meeting the following conditions:

- Not residing in another state for more than 183 days.

- Having a permanent residence in Cyprus (ownership or rental).

- Conducting business or employment in Cyprus, or holding a position in a Cypriot company.

- Not holding tax residency status in another state.

Details of these rules are available on the Cyprus Tax Department’s website.

A person not meeting the above criteria is considered a non-resident.

Personal Income Tax

Residents: Taxed on worldwide income on a progressive scale:

Up to €19,500: 0%

€19,501 – €28,000: 20%

€28,001 – €36,300: 25%

€36,301 – €60,000: 30%

Over €60,000: 35%

Non-residents: Taxed only on income sourced from Cyprus at the same rates.

Contributions to the Healthcare System

All individuals working or residing in Cyprus are required to contribute to the healthcare system.

Capital Gains Tax

Gains from the sale of property in Cyprus are taxed at 20%.

Value Added Tax

The standard VAT rate is 19%. There are also reduced rates of 9% and 5% for certain goods and services.

Double Taxation Avoidance Agreements

Cyprus has agreements with more than 60 countries to prevent double taxation and define which jurisdiction taxes certain income types.

Recommendations

It is recommended to consult with tax advisors to assess individual obligations and optimize the tax burden.

More detailed information is available on the official website of the Cyprus Tax Department.

In the Republic of Cyprus, the tax declaration process for foreigners depends on their tax residency status and sources of income.

Determining tax residency: tax resident or non-resident.

Tax declaration process

Registration with the Tax Department: Foreigners earning income in Cyprus must register with the Tax Department and obtain a tax identification number.

Online system TAXISnet: After registration, it is necessary to create an account in the TAXISnet system for electronic submission of tax returns.

Submission of tax return: Tax residents are required to submit an annual income declaration, usually by July 31st of the following year. Non-residents only declare Cypriot income. The declaration is submitted through TAXISnet.

Payment of taxes: After submitting the declaration, the amount of tax due is calculated. Payment is made through banks or online payments.

Features for foreigners

Double taxation: Cyprus has agreements to avoid double taxation with various countries, preventing double taxation of the same income.

Consultation with professionals: It is recommended to consult with tax advisors to accurately determine obligations and optimize taxation.

For more information and access to the necessary forms, please visit the official website of the Cyprus Tax Department.

Registration and tax accounting

Registration with the Tax Department: Self-employed individuals must register with the Cyprus Tax Department and obtain a Tax Identification Number. Registration can be completed online through the "Tax For All" portal.

Registration in the social insurance system: Mandatory for the payment of social contributions.

Registration in the VAT system: If the annual turnover exceeds the set threshold (currently €15,600), it is necessary to register as a VAT payer.

Taxation

Personal income tax: Self-employed income is taxed on a progressive scale:

Up to €19,500: 0%

€19,501 – €28,000: 20%

€28,001 – €36,300: 25%

€36,301 – €60,000: 30%

Over €60,000: 35%

Special regime for small enterprises (SME-SS): Provides simplified procedures and benefits for small businesses with an annual turnover of up to €25,000.

Social contributions

Contributions to the Social Insurance Fund: Self-employed individuals are required to make contributions calculated as a percentage of their income.

Contributions to the healthcare system: Mandatory for all working individuals, including the self-employed.

Accounting and reporting

Accounting: Self-employed individuals are required to keep accurate records of their income and expenses for tax purposes.

Submission of tax returns: The annual submission of an income declaration is mandatory.

Recommendations

It is recommended to consult with tax advisors to ensure compliance with all requirements and optimize the tax burden.

More detailed information can be found on the official website of the Cyprus Tax Department.