OnlyFans Creators Moving to Cyprus: Company Setup, Non-Dom Status and Tax Planning

(real client enquiry)

Hello Client - my comments are below in blue.

Let's chat the last week of August when we return to the office.

We have many clients working for OF; the model works and the savings are tremendous!

Looking forward to chatting with you.

Dear CYAUSE team,

Thank you for your detailed reply.

I am currently seriously considering Cyprus as a potential relocation destination, so I would be happy to proceed with the introductory call once your office reopens.

In the meantime, I thought I would provide you with the information you requested so that you have a clearer picture of my situation beforehand:

1. I am an Italian/EU citizen.

2. I am currently tax resident in Belgium.

3. I am considering relocating to Cyprus as soon as possible to establish the company there if it turns out convenient

4. My main source of income is OnlyFans.

5. My income has increased significantly over the past four months, mainly because I started working with an OnlyFans management agency based in Italy. The agency provides account management, chatting and monetisation services for my OnlyFans activity.

6. This is still a relatively recent development, so I would not consider my current level of income fully established or guaranteed long-term.

7. My income over the most recent four months has approximately been 15k $, and I expect my income over the next 12 months to be around 60k $, although this is still subject to fluctuations and potential growth, my income is quite volatile and depends on algorithms and a variety of other factors. It's unpredictable. 

8. OnlyFans pays the income directly to me (the platform already withholds 20%; the estimated figures are net of this percentage), and I pay the management agency separately for its services 35% of the earning of the month.

9. I have not yet established a company or opened a dedicated business/tax position for this activity, so I am currently in a position to choose the most appropriate structure before formalising the business.

10. I would expect to spend the majority of the year in Cyprus and intend to establish my main residence there. Such a beautiful island!

11. My preference would be to use a Cyprus Limited Company if this proves to be the most tax-efficient and appropriate structure. I am willing to pay the lowest tax rate!

Before the consultation, I would particularly like to understand the following:

• Based on my expected turnover and the fact that the business is still relatively new, would you recommend a Cyprus Limited Company or individual activity? Cyprus Limited Company 

• If using a Cyprus Ltd, what would generally be the most tax-efficient way for me to extract the profits personally (salary, dividends, or a combination)? A combination of low salary (important for the non dom) and large dividends which are tax free.

• Could you give me an approximate indication of the total annual tax burden and company costs for a Cyprus Ltd at my expected level of income? 15% on profits, appr 25% on salary (employee and employers contributions)

• Could you also explain how the Cyprus non-dom regime would affect the taxation of dividends in my particular situation? It will make them non taxable - we will get you the non dom as we do with all of our international clients.

I already have a Belgian tax accountant who handles my current Belgian tax affairs, so I would mainly like your advice regarding the Cyprus side, including the most appropriate structure once I relocate, so that I can do the comparison. And these information could be helpful to prepare myself for the call.

I understand that a precise calculation would require a paid advisory engagement and further information. I am mainly hoping to use the introductory call to understand whether Cyprus would be financially and structurally suitable for my situation and what the next steps would be.

Just one additional question following my previous email, as I think this would help me better understand whether the Cyprus structure would be financially suitable for me.

For comparison purposes, could you please give me an approximate indication of how much I would ultimately be able to retain personally if the Cyprus Limited Company generated €100,000 in annual gross revenue from OnlyFans? Appr Euro 85k!!!

Ideally, I would like to understand the approximate amount remaining after:

• corporate taxation; 15% on year end company profits

• mandatory social/health contributions, if applicable; applicable and important for the healthcare

• any personal taxation; Only social securities - I will explain over the phone

• taxation on dividends, if dividends were used to extract the profits; Zero dividend tax

• and the main recurring costs of maintaining the company. Appr Euro 2,000 + VAT per annum

I understand that this would only be an illustrative example and not a formal tax calculation. I would simply like to have an approximate net figure that I can later compare with the equivalent situation in Belgium.

Please let me know if you would like me to provide any additional information before the call. This suffices.

Kind regards,