So what's the deal with all those companies being registered in Cyprus?
 

Is it a tax thing? Obviously it benefits them in some way. What is it?

the weather

it might also be the 10% corporate tax rate

Ah, that's most likely the reason.

...taxes

http://i.ytimg.com/vi/yalxCnnp8XI/0.jpg

:anon

ADG

:thumbsup

Bouzouki. More bouzouki.

no it's not because of money

enlighten us...

Climate.

True .. the money feels better there .

The pussy.

A lot of the processing banks in the EU require a EU corp and EU bank account. Cyprus is one of the easiest to setup + the low tax rate there.

They either use Cyprus or the UK. You will also see a lot of UK corps on the bottom of paysites.

A hidden island to run away to lol

I don't know exactly how it works but for some reason its very easy for Russians to live and do business there.

What`s so good about the UK? I thought taxes there are sky high just like any other
western european country?

From what i know taxes in Malta are only 4.8%...

I think for a foreign company the tax % is quite interesting, kind of like in holland. Tons of adult companies registered here all on the same p.o. Box ;))

An accountant trying to legally minimise tax would get a raging hardon reading :

uniform corporate tax rate of 10%, the lowest in the EU;
no tax on dividends or interest payments to non-residents;
no withholding taxes on royalty payments relating to the use of rights outside Cyprus;
favourable tax treatment of losses;
no tax on profits from permanent establishment outside Cyprus, subject to conditions;
double taxation treaties with over 40 countries;
no tax on capital gains from disposal of securities listed on a recognised Stock Exchange;
no tax on profits from reorganisations;
tax free repatriation of profits and capital.

[ Source : http://www.businessincyprus.gov.cy/m...2575EE002F29C8 ]

Yup that and the fact that a cyprus bank will accept any amount deposit, cash or otherwise.. regardless of how big or small with nothing more than the client's attestation of the source.

So if a drug dealer walked in with a million dollars cash and say he sold his old ford pick up truck to a drunk Los Vegas gambler.. A cyprus bank will be happy to say "thank you very much please come back with more real soon."

The use of a Cyprus bank was old and well known back in my day (the 1970s) And in the 1970s most of those involved in the european porn industries who had a cyprus corporation or bank account were publically saying they did one type of business but behind closed doors were making their money doing something else they didn't want anyone to know about.

So obviously tube sites provide a great public * SOurCE * for anyone that's earning money secretly another way.

Comforting to know nothing has changed. Porn just keep doing the same thing over and over again and each generation thinks it's doing something new or revolutionnaire.

It has to do with costs and ease of setup.

Setting up a UK corp just takes a few days and is very cheap (you basically just buy an existing corp and change the name and ownership).

What most do is probably just 'invoice' the company for management fees, so their won't be actual profits in the UK.

Same for Cyprus, it's fairly easy and cheap to setup a company and bank account. You can do it all trough email and then you sign the docs and fedex them and you're setup.
And there are no minimum deposits/balances for the bank accounts and no minimum deposits/balances to setup a company. That's also a very big reason for Cyprus to be so popular. It's a lot more expensive and requires fairly high deposits in other countries. And also in other countries there is a thing with the VAT, like officially you'd have to pay VAT for all the EU customers.

You mean all the ones that were setup trough VXSBill in IJmuiden or something? A lot of the people who did that got huge problems with their local tax agencies about not paying VAT for the EU customers.

Did you guys had downloads back then in the 70s?:)

Yeah... now that you say that... that would be why the Rolling Stones are also registered in Amsterdam...

So we inhabitants are getting fucked by dutch goverment but when you`re from somewhere else you get great benefits... that`s simply fucking great... just like always...

Hmmm... anyone knows what`s the tax% in the uk for foreigners?

Why would Canadian company choose Barbados over Cyprus? Would not Cyprus be easier?

Well we had our share of pirates.

I remember an incident where a pirate went into a porn theatre and filmed an entire movie with a super 8 camera and a casette recorder. He then went home and worked out an entire scam of where if one customer could sign up 3 other customers to buy the film... not only would he get his copy free but he would get a percentage of how much money his friends spent.

And if his friends signed up other people he would get a kick back on that too. Then later if the same customer provided a good quality copy of a film, he would get a percentage of the sales.

Within a year the creep had almost 30 films, was distributing to theatres and the man that brought me into the porn business was in spain standing outside of a mail drop service with a piece of chain to settle the problem.

----
So I guess I should have said that the format changes but the game remains the same.

Today the only problem is the pirate's ability to hide is better. In the old days we kind of handled the problems ourselves. But you know when I think about it, that's kind of what Adult King is doing. (He's found a virtual baseball bat)

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.

Nice post Nathan

Thx Bako. I will now watch getting it ripped apart out of context by the general GFY village idiots.. :)

Dublin has been popular for some time, Google and Dell can testify to that.

:2 cents:

Mike's gonna be all over that, like white on rice:2 cents::1orglaugh

Is this still possible? I thought they changed the laws a couple of years ago to prevent money laundering. I had plans to move to Cyprus and last time I checked I had to show up there in person and also bring a lawyer to the bank to open a account.

AFF can attest to the VAT problem...

10% corp tax and double taxation treaty with other EU countries - so you can get the money taxed in cyprus and bring it legally into your country at that 10% rate.

Great post!

Yes, the VAT thing already got quite some porn webmaster into trouble with their tax agencies. You can get huge fines if you don't pay VAT on the EU customers.

You don't have to show up.
Contact these people: profelltd dot com

As for the bank, a lot of banks in Cyprus are not too keen to work with companies that do porn, but with a Cyprus company you can also easily open a bank account in Germany, for example at http://www.wirecardbank.com/ you can do it online.

Make sure you do get an accountant, you DO need to prepare and file accounts/financial statements if you have a Cyprus company.

I see many companies also registered in GIBRALTAR or PANAMA...

Yeah many adult companies register in Cyprus.

Gibraltar is where I had my first bank account like 15 years ago. I flew out there every few months to bring my iBILL and CCBill checks. Back then it was super easy to open bank accounts, a lot has changed in the past 15 years.

Nathan, your #2 is wrong. Electronic services, such as programming like we do for instance, are considered to be done at the location of the buyer - so in our case for instance we don't have VAT for non-eu customers.

I am talking simply end user B2C transactions! Not B2B. And only online services. Like memberships and such.

Advice. :winkwink:

Excellent post.

I had no idea about the Austrian headaches. You should buy them and put your headquarters in an old castle. Then line the street up to that castle with wax heads of those you have put out of business or acquired, like Dracula did, but use wax and not real heads because you're actually a nice guy and probably wouldn't really behead people in real life even if you thought you could get away with it, which at this point I'm pretty sure you could. So yea, wax heads just for that finishing touch. That would be pretty bad ass.

So be it, Konrad...

http://i.imgur.com/OGPZt.jpg

Single point of entry VAT numbers are very useful in these situations :2 cents:

Thanks for the info, Nathan!

As always my threads are full of excellent info. I should be paid to post here.

NewNick until they change the VAT law in 2013 and all of the EU will function like external corps right now, so you always pay VAT rate of the customer's location.

Indeed - but the administration is reduced to one VAT return, instead of one for each member state.

And, for those who might be interested in such things, VAT fraud is so much more straightforward......

50 Cyprus shell companies ?