Tax Advisor Braunschweig Cyprus: Your Expert for International Tax Planning

Today, I want to talk to you about a topic that is increasingly relevant for entrepreneurs from Braunschweig: How can I reduce my tax burden legally and safely?

Here in Braunschweig, I meet ambitious businesspeople every day. They have built successful companies, operate internationally—and are frustrated by their high German tax rates. That naturally leads to the question: What if I run my business through Cyprus?

But wait.

Before you make a hasty decision, let me guide you through the process. As your tax mentor, I’ll show you how Cypriot companies really work—no jargon, no hidden risks.

Today you’ll learn:

• Why Cyprus is so attractive for entrepreneurs from Braunschweig
• Which tax benefits you can actually expect
• How to set up a legally compliant structure
• Which pitfalls you absolutely must avoid

The best part: I’ll explain everything in a way you can understand. Because complex tax structures don’t have to be explained in a complicated way.

Ready for your journey to Cyprus?

Why Entrepreneurs from Braunschweig Choose Cyprus

Let me tell you about Thomas. He runs a successful IT business here in Braunschweig. Annual turnover: €800,000. His tax burden in Germany: Over 40% of his profits.

This left him frustrated.

Thomas isn’t alone. The Braunschweig-Wolfsburg area is home to many innovative companies. Think of the automotive industry and research centers around TU Braunschweig. These entrepreneurs think globally—and find themselves wondering: Do I really have to pay so much in taxes?

The Situation in Braunschweig: High Taxes Meet International Mindset

Here’s the reality for business owners in Braunschweig:

That’s almost €64,000 in taxes—money Thomas would much rather have invested in growth.

But here’s the thing: Thomas already works internationally. His clients are in London, Amsterdam, Dubai. So why should he pay taxes on earnings in Germany?

Cyprus as an EU Solution for Braunschweig Entrepreneurs

This is where Cyprus gets interesting. The island offers a unique combination:

• EU Membership: Legal certainty and free movement of capital
• Low Taxes: 12.5% corporate tax rate
• International Reputation: No offshore stigma
• Double Taxation Agreements: With over 60 countries, including Germany

Theoretically, Thomas could reduce his tax burden from €63,850 to €25,000—a yearly saving of almost €39,000.

But—and this is crucial—this only applies if certain conditions are met.

Why Braunschweig and Cyprus Are a Perfect Match

You might be wondering: Why should I, as an entrepreneur from Braunschweig, consider Cyprus?

The answer lies in the character of our region. Braunschweig has always been internationally oriented. The proximity to Wolfsburg and VW, the research landscape, the central location between Hanover and Berlin—all this makes Braunschweig businesspeople natural border crossers.

Cyprus also offers practical advantages for our time zone. There’s only a one-hour difference. Meaning you can work from Braunschweig in the morning and still be in sync with your Cypriot structures during office hours.

Cypriot Companies: What You Need to Know as an Entrepreneur from Braunschweig

Let me explain Cypriot companies to you the same way I explain them to my clients in Braunschweig—no legalese, just clear facts.

The Cypriot Limited (Ltd): Your Vehicle for Tax Optimization

A Cypriot Limited is similar to a German GmbH—but with key differences:

This may sound almost too good to be true. And here’s where I must warn you:

There are rules you have to follow.

The Substance Rules: Why Shell Companies Don’t Work

This is where it gets interesting. A Cypriot company must have real economic substance. That means:

1. Onsite Management: Key business decisions must be made in Cyprus
2. Physical Presence: An actual office, not just a mailbox
3. Local Staff: At least one qualified person on the ground
4. Genuine Business Activity: The company must be actively trading

For you as a business owner from Braunschweig, this means: You can’t just set up a company and hope for the best. You need a well-thought-out structure.

Which Business Models Work in Cyprus

Not every business lends itself to a Cypriot structure. Here’s what I’ve seen in practice:

Well-suited:

• IT services and software development
• Online marketing and e-commerce
• Consultancy services
• Licensing and IP management
• International trading

Challenging:

• Local services (craft trades, gastronomy)
• Real estate business within Germany
• Businesses mainly serving German clients

The golden rule: The more international your business, the better suited is a Cypriot structure.

Tax Advantages in Detail

Now let’s get concrete. Let me show you the actual tax advantages of a Cypriot company—with real numbers, not marketing promises.

Corporate Tax: 12.5% instead of over 30%

The most obvious advantage is the low corporate tax rate. But be careful: this 12.5% only applies if you meet certain conditions.

Here’s an example for an IT entrepreneur from Braunschweig:

Those are impressive figures. But don’t forget: you need to meet the substance requirements.

Dividend Taxation: A Real Benefit

This is where things get really interesting. When you, as a German taxpayer, receive dividends from your Cypriot company, the Double Taxation Agreement applies.

This means:

• Withholding tax in Cyprus: 0% (for substantial companies)
• Offsetting in Germany: Possible tax optimization through timing

But here’s the kicker: as a German tax resident, you’re generally liable to tax on your worldwide income. That is, you’ll have to declare the dividends in Germany.

Still, there are legal optimization strategies, such as:

1. Timing your dividend payments
2. Retaining profits in the Cypriot company
3. Combining with other tax strategies

IP-Box Regime: Up to 80% Tax Reduction on Intellectual Property

This is an insider tip for innovative entrepreneurs from Braunschweig. The Cypriot IP Box Regime allows for up to 80% tax reduction on income from intellectual property.

This means: Instead of 12.5%, you pay only 2.5% tax on license income.

Practical example: You develop software in your Braunschweig company and transfer the rights to your Cypriot company. The Cyprus company licenses the software internationally and pays just 2.5% tax on this revenue.

But—and this is key—the IP must be substantially developed or further developed in Cyprus.

Practical Implementation: From Braunschweig to Cyprus

You’re probably now wondering: That all sounds good, but how do I actually make it happen? Let me guide you step by step.

Step 1: Is Your Business Model Suitable?

Before you invest a single euro, we need to clarify: Does a Cypriot structure make sense for you?

This checklist will help you decide:

• ✓ Do you work with international clients? (at least 50% of revenue abroad)
• ✓ Can you manage your business remotely?
• ✓ Is your annual profit over €100,000?
• ✓ Are you willing to invest in real substance?
• ✓ Do you understand the tax consequences?

If you answered Yes to at least four of these, Cyprus could be an interesting option for you.

Step 2: Developing the Right Structure

There isn’t just one Cypriot structure. Depending on your business model and your goals, we’ll develop different approaches:

Your choice depends on your individual circumstances. That’s why personal advice is essential.

Step 3: Company Formation and Building Substance

Once your structure is defined, it’s time to make it happen. Here are the typical steps:

1. Company formation (2–4 weeks, approx. €2,500)
2. Open a bank account (can be done remotely)
3. Rent an office (from €300/month for a shared office)
4. Appoint a local director (from €1,200/year)
5. Set up tax registration and accounting

You should budget for initial investments of €8,000–15,000. Plus running costs of about €3,000–6,000 per year.

The Braunschweig Advantage: Practical Tips for Implementation

As someone from Braunschweig, you have a practical advantage: Close proximity to Hanover airport. From there, Larnaca is about a 4-hour flight. That’s important, because you’ll need to travel to Cyprus regularly.

My advice: Plan on making at least 4–6 trips to Cyprus per year. On these you can:

• Hold board meetings
• Document business decisions
• Maintain local contacts
• Strengthen the substance of your company

And by the way: many from Braunschweig use these trips as a holiday too—after all, Cyprus is a beautiful island.

Typical Pitfalls and How to Avoid Them

This is where it gets serious. Every day I see entrepreneurs making mistakes with Cypriot structures—mistakes that can be costly. Here are the most common pitfalls, and how to avoid them.

Pitfall 1: Missing Substance—the Classic Beginner Mistake

This is by far the most common error: Founders set up a Cypriot company and think they can run everything from Braunschweig as before.

It doesn’t work that way.

German tax auditors aren’t fools. They take a close look:

• Where are key decisions made?
• Who manages day-to-day operations?
• Where does the economic activity actually take place?

If you can’t convincingly answer Cyprus for these, you have a problem.

How to avoid this:

1. Appoint a qualified local director
2. Hold regular board meetings in Cyprus
3. Document all key decisions
4. Ensure genuine business activity onsite

Pitfall 2: CFC Rules—the German Tax Office Strikes Back

This gets complex. Germany enforces rules against tax avoidance: Controlled Foreign Corporation (CFC) rules under §§ 7–14 AO.

Simply put: If you control a foreign company that lacks sufficient substance, profits are treated as if you earned them directly in Germany.

That would erase all your tax optimization.

The solution: Build up real substance. It costs money, but saves you far more in the long run.

Pitfall 3: Unclear Transfer Pricing

If your German and Cypriot companies do business with each other, prices must be at arm’s length—the same as you’d agree with an independent third party.

Many entrepreneurs underestimate this. They push all profits to Cyprus, then are shocked when the tax office challenges them.

The solution: Carefully document all transfer pricing. Ideally, have a transfer pricing file prepared.

Pitfall 4: Compliance Issues

Cyprus is tax-friendly, but still in the EU. That means strict compliance regulations.

You are required to:

• Keep proper accounts
• Prepare annual financial statements
• File tax returns on time
• Make registry notifications
• Comply with anti-money laundering laws

Failing to comply can be expensive—up to forced dissolution of the company.

The Path to Your Optimal Tax Structure

You’ve now learned a lot about Cypriot companies. But how do you know if and how they’ll work for you? Here’s my proven process.

Phase 1: Analyze Your Current Situation

Before we talk Cyprus, let’s look at your current tax position. I analyze:

1. Your business model: How do you earn your money?
2. Your client structure: How international is your business?
3. Your profit margin: Does it justify the effort?
4. Your plans for the future: Where do you want to go?

Only when I understand these things can I give you honest advice.

Phase 2: Tax Modeling

Now it’s time to crunch the numbers. I prepare different scenarios for you:

I consider not just the taxes, but also:

• Setup and running costs
• Time needed and complexity
• Legal and tax risks
• Your personal circumstances

Phase 3: Thoughtful Implementation

If you decide on a Cypriot structure, we’ll move forward in stages:

Months 1–2: Preparation

• Detailed planning of the structure
• Selecting local partners
• Preparing all documents

Months 3–4: Formation

• Company formation in Cyprus
• Bank accounts and infrastructure
• Initial compliance measures

Months 5–6: Start Operations

• Commence business activity
• Hold first board meetings
• Documentation and reporting

Year 1+: Optimization

• Regular reviews
• Adjustments as needed
• Expansion of activities

What You Can Expect from Me as Your Tax Mentor

I’m not just your advisor—I’m your partner on this journey. That means:

• Honest advice: If Cyprus isn’t right for you, I’ll say so
• Holistic view: Not just taxes, but your whole business
• International expertise: I know the rules in different countries
• Long-term partnership: Your structure grows with your business
• Local roots: As someone from Braunschweig, I understand your situation

I always speak plainly. No consulting buzzwords, no false promises. You’ll get the unvarnished truth—even if it’s sometimes uncomfortable.

Tax Consulting in Braunschweig: Your Partner for Cyprus Structures

You’re probably wondering now: How do I find the right partner for my Cypriot structure? Here in Braunschweig and Lower Saxony, there are plenty of tax consultants—but not all of them understand international structures.

What Makes a Good Cyprus Specialist in Braunschweig?

From my experience, your consultant should have these qualifications:

• International experience: They’ve already managed Cyprus structures themselves
• Local connections: Strong links to Cypriot lawyers and advisors
• Holistic approach: Not just taxes, but also legal and operational aspects
• Honest communication: Someone who says no if it’s not the right fit
• Local roots: An understanding of the Braunschweig business scene

Be wary of consultants who promise unrealistic savings or downplay the complexity.

The Importance of Local Expertise in Braunschweig

Why is it important to have an advisor on site? Simple:

1. Trust: You can meet in person and build a relationship
2. Quick response: Your consultant is there for questions or problems
3. Local understanding: They know the Braunschweig business environment
4. Network: Contacts with other consultants, lawyers, and banks in the region

This personal contact is invaluable, especially in the early phases. You’ll have many questions, uncertainties, concerns. It helps if you can just pick up the phone or stop by.

Costs of Professional Cyprus Consulting in Braunschweig

Let me be frank: Professional consulting for Cyprus structures costs money. But in the long run, it saves you much more than it costs.

Here’s what Braunschweig entrepreneurs can typically expect:

That may sound like a lot initially. But considering it can save you €50,000 or more per year, the investment pays off quickly.

Why I’m Different as Your Tax Mentor

You might wonder: What sets me apart from other tax advisors in Braunschweig?

The answer is simple: I speak your language.

I don’t explain why things are complicated. I show you how to make them simple. And I never forget: You’re the entrepreneur, I’m your advisor. You make the decisions, I give you the information you need.

My approach:

• Straight talk instead of jargon: You’ll understand what we do and why
• Honesty, not sales pitch: I only recommend what truly fits
• Partnership instead of consulting service: We develop your strategy together
• Pragmatism instead of perfectionism: 80% executed is better than 100% planned

This has won me many satisfied clients in Braunschweig and surrounding areas—entrepreneurs now operating internationally, paying far less tax.

Frequently Asked Questions About Cyprus Structures in Braunschweig

To wrap up, here are the questions Braunschweig entrepreneurs ask me most often:

Is a Cypriot company legal for German entrepreneurs?

Yes, absolutely. Cyprus is an EU member, and Germany has a double taxation agreement with Cyprus. As long as you follow all the rules, a Cypriot structure is completely legal.

The only important point: You have to build real substance and fulfill all your tax obligations. Shell companies don’t work.

How often do I need to travel to Cyprus?

It depends on your structure. As a rule of thumb, I recommend at least 4–6 trips per year. You should make and document key business decisions during these visits.

From Braunschweig, it’s very doable. Via Hanover, you reach Larnaca in about 4 hours by air.

What does it cost to set up a Cypriot structure?

Expect €15,000–30,000 for setup and €5,000–12,000 in annual running costs. That sounds like a lot, but at the right profit level, the investment pays off quickly.

Can I simply move my existing Braunschweig GmbH to Cyprus?

No, it’s not that easy. You can, however, set up a Cypriot company and strategically restructure your German business.

There are many legal and tax aspects to consider, so professional advice is essential here.

What happens in a German tax audit?

If you’ve done everything correctly, it’s not a problem. But German tax auditors will look closely. You have to prove that your Cypriot company has real substance.

That’s why clean documentation is so important. Every decision, meeting, and business activity must be traceable.

Is a Cyprus structure suitable for any business?

No, definitely not. Local service providers in Braunschweig—like tradespeople or restaurateurs—don’t benefit from a Cyprus structure.

It’s best suited for international service providers: IT companies, consultants, online retailers, software developers. The more international your business, the better Cyprus fits.

How do I find a reliable partner in Cyprus?

This is vital for your success. I only work with partners I know personally and who have a proven track record.

Be wary of providers making unrealistic promises or offering very low prices. Quality comes at a price.

What’s the first step for interested entrepreneurs from Braunschweig?

The first step is always an honest analysis of your situation. We look at your business model, your profit structure, and your goals.

Only once we know whether a Cyprus structure makes sense for you do we discuss concrete implementation.

How long does it take to build a working structure?

Plan on 4–6 months from decision to operational functionality. That may sound like a long time, but a solid structure requires time.

Quick fixes usually cause problems later. Better to do it right the first time than fix it twice.

Can I dissolve my Cyprus structure later?

Yes, you can exit at any time. Proper dissolution costs about €2,000–5,000 and takes 3–6 months.

The only important point: Make sure you’ve met all tax obligations—otherwise, it may get expensive.

What role does the German CFC (controlled foreign company) rule play?

This is a key issue. Germany’s CFC rules can destroy all your tax planning if you’re not careful.

That’s why real substance in Cyprus is so important. With the right structure and sufficient substance, you can legally bypass these regulations.

Got more questions? Reach out to me. As your tax mentor here in Braunschweig, I’m here to help.

Yours truly,
RMS