Banking, money and taxes in Cyprus continue to be influenced by the country’s austerity measures and the after-effects of its banking crisis.
Having invested heavily in Greece, banks in Cyprus were forced to write off millions of Euros in bonds and loans, causing a shortfall of capital that the government couldn’t fill. As a result, its European partners agreed to finance a 10 billion EUR aid package.
High taxes and job losses have since been prevalent as the government attempts to prevent long-term catastrophes with harsh short-term measures.
Money in Cyprus
Cyprus adopted the Euro (EUR) in 2008, moving over from the Cypriot Pound. The Cyprus Euro is split into seven banknotes and eight coins, and is differentiated from other coins on the continent by designs that are symbolic of the country.
Notes: 5 EUR, 10 EUR, 20 EUR, 50 EUR, 100 EUR, 200 EUR and 500 EUR
Coins: 1c, 2c, 5c, 10c, 20c and 50c and 1 EUR and 2 EUR
Banking in Cyprus
The Central Bank of Cyprus oversees and licenses all banks on the island, ensuring that commercial banks comply with EU bailout conditions. The Bank of Cyprus is the biggest bank on the island. Numerous international banks operate branches or have subsidiaries in the country.
ATMs are widespread in Cyprus and can be found in most towns and large villages. Many banks offer internet banking facilities in English.
Banks in Cyprus are generally open Monday to Friday, 8.30am to 1.30pm.
Opening a bank account in Cyprus
Opening a bank account in Cyprus is easy, even for expats. Under most circumstances, banks require individuals to open an account in person at one of their branches, although there are exceptions.
Expats will need numerous documents to open an account, including:
A valid passport or, for EU citizens, an identity card bearing a signature and photo
Proof of address, such as a recent utility bill or bank statement
A reference letter from the applicant’s previous bank giving information about their credit rating
Taxes in Cyprus
Taxes in Cyprus have traditionally been low, resulting in people from other countries investing their money in Cypriot banks to the point where their deposits were much bigger than the country’s GDP. This has played a large part in the country’s financial difficulties. The government has subsequently had to reconsider its system of taxation, raising the amount of tax that expats are required to pay.
Cyprus has double taxation agreements with the UK, Canada, South Africa and the USA, meaning that expats from these countries won’t have to pay tax in their home country in addition to taxes in their new host country.
Taxation is a complex issue – especially for expats in Cyprus. As such, they should seek the advice of a qualified tax advisor or accountant in Cyprus.
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