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Cyprus - Banking
In the last several years, banking, money and taxes in Cyprus have been under the influence of the country’s austerity measures and the after-effects of its banking crisis. After some very large investments in Greece, banks in Cyprus had to write off millions of Euros in bonds and loans. This caused a significant shortfall of capital that the government couldn't easily fill. As a result, the country's European partners agreed to offer the aid package of 10 billion Euros. Since then, job losses and high taxes have been prevalent, while the government is still attempting to prevent some larger long-term catastrophes, proposing some harsh short-term measures.
Money in Cyprus
Cyprus adopted the Euro (EUR) as the official currency in 2008, replacing the long time Cypriot Pound. The Cyprus Euro is split into seven banknotes and eight coins. It differs from the coins we might encounter on the continent by its design, which shows Cypriot symbols.
Notes: 5, 10, 20, 50, 100, 200 and 500 EUR
Coins: 1, 2, 5, 10, 20 and 50c and 1 and 2 EUR
Banking in Cyprus
The Central Bank of Cyprus is the main institution for administrating, overseeing and licensing all the banks on the island, also aiming to ensure that numerous commercial banks comply with EU bailout conditions. The biggest bank in the country is the Bank of Cyprus. There are also numerous international banks that operate branches or have some subsidiaries in the country. ATMs are densely spread across Cyprus and can be easily found in most towns and larger villages. Cyprus has a number of banks that offer Internet banking facilities in English. The work hours of banks in Cyprus are usually Monday to Friday, from 8:30am to 1:30pm.
Opening a bank account in Cyprus
It is not very hard to open a bank account in Cyprus, even for expats. The majority of banks require individuals to open an account in person at one of their branches, although there may be some exceptions.
When opening an account, expats usually need to provide numerous documents, which include the following:
- 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
The Republic of Cyprus is known for its traditionally low taxes. This results in people from other countries investing their money in Cypriot banks. It has now reached the point where their deposits are much bigger than the country’s gross domestic product, the GDP. These events played an important role in the financial difficulties of Cyprus. The government has been subsequently forced to reconsider its system of taxation, by raising the amount of tax that expats are required to pay.
Cyprus has double taxation agreements with some countries such as the United Kingdom, Canada, South Africa and the United States of America. This means that expats won’t have to pay tax in their home countries in addition to the taxes required in their new host country. Taxation is still a complex issue, though. It is recommended that all expats seek the advice of a qualified tax advisor or accountant in Cyprus.
Expat banking in Cyprus
Since the early years, the Republic of Cyprus has succeeded to develop a well shaped banking system which is mostly influenced by the British banking system. The Central Bank of Cyprus has responsibility for monetary and credit policy. In addition to that, there are also nine commercial banks and three specialist financial institutions. A large number of foreign banks also have branches in Cyprus, including HSBC, which now has branches even in the northern region. The branches in the south of the island were established earlier. The Bank of Cyprus, Laiki Bank and Hellenic Bank are the three largest commercial banks in the country, with branches throughout the Republic of Cyprus.
While the banking hours in the Republic of Cyprus are Monday to Friday from 8:30 am to 1:30 pm, there are also some banks in tourist areas that are open in the afternoons. As for the standard of facilities, the banking system is sophisticated and well equipped with user friendly modern technology. Transferring salaries, pensions and income from abroad into Cyprus is an easy process. There are also numerous Turkish and Turkish Cypriot banks that operate in the Turkish Republic of Northern Cyprus. These banks are generally open from Monday to Friday, between 8:00 am and noon. Credit cards and travellers’ cheques are usually accepted in hotels, restaurants and larger shops in both the south and the north of the Republic of Cyprus.
Anyone who is a valid resident in Cyprus can open a local bank account, by providing evidence of their identity and some other documentation that specific banks may require. All the banks in Cyprus have to monitor overseas transactions and remittances to prevent money laundering. There are also limits on deposits of foreign currency within a calendar year, without the prior approval of the Central Bank. Anyone who enters or leaves Cyprus with 12,500 Euros or more must declare this amount to customs.
Read more about this country
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