Enquiry - Company formation and fees

Dear Client,

I hope this email finds you well.

It was a pleasure to e-meet you yesterday.

Following our conversation, we would like to inform you about our costs and fees for the services we can provide you once the company is incorporated.

1. Incorporation fees - 700 euros + VAT + disbursements (Disbursements can be paid once the company is formed and usually the fees are between 300-700 euros)
2. Nominee fees - as per below
3. Accounting and audit fees - please use this link to see the fees as per the movement/transactions the company will have once the operations starts. This can be modified and agreed in a later stage.
4. Additional costs/services to be provided:

• UBO Declaration - This relates to the creation of a profile and submitting the details of each UBO through that profile. The initial fee for this service is 300 euros + VAT. Thereafter, the annual fees for updating the UBO details will be 75 euros + VAT.
• HE32 fees - This relates to the submission of the annual financial statements. The fees are 150 euros + VAT + 20 euros disbursements.
• HE32 registration for getting codes from the Registrar of Companies - 50 euros + VAT.
• Tax registration - 150 euros + VAT, one-off fee
• VAT registration - 150 euros + VAT, one-off fee

As per point 2, the nominee fees for each position are as follows:

1. Director of the company - 800 euros + VAT, annual fee
2. Secretary of the company - 500 euros + VAT, annual fee
3. Registered office/address of the company - 800 euros + VAT, annual fee
4. As discussed, the shareholders of the company can be the 5 of you directly.

Finally, in respect to your question for the activities of the company and if the company is applicable to VAT registered, could you please provide us with more information as per below:

1. The commission income to be received, will it be agreed with the landlords who will advertise their properties on the platform?
2. The clients who want to rent, will be directly the landlords through this platform? If yes, will the landlords pay you the commission after the first payment is made?
3. Will you have agreements with the landlords which you will agree from before the commission income to be received? If yes, then the landlords might be VAT registered in order to know if the invoices need to include VAT or not.

If you have any further questions, please do not hesitate to contact us.

Kind regards,

Dear CYAUSE,

Thank you very much for your detailed email!

To answer your questions, I'll give you the exact way that we want to operate:

On our platform, travelers will be able to view profiles of individuals (not professionals) who want to host them at their homes. The same house that they are living in, too. The traveler will be able to see the price, book, and pay directly on our platform. Our platform will be connected to Stripe (the most reputable PSP worldwide). From the total amount of money, we keep our commission and transfer the rest to the host's bank account. Our commission will be standard for all hosts and will be mentioned clearly in our signed agreements. 

I hope that I answered your questions, and I look forward to hearing from you.

Best regards

Dear Client,

Thank you for your email and the update provided.

We are currently waiting for the response from the VAT department in respect to the issuance of the invoice based on the commission and if the CY company should charge 19% (VAT rate) or 0%.

As an initial point of view, we believe that since you will have signed agreements with the hosts worldwide, the VAT on the commission income will be charged accordingly based on the location of the property.

For example, if the property is located in Cyprus, then 19% VAT charge will be added in the commission income.

If the property is located in the EU, then 0% VT charge will be added in the commission income and we will include it in the VIES (especially if the host is registered under VAT in his/her country). If they are not registered then, 19% will be added.

However, once we receive an official response from the VAT authorities, we will let you know.

Kind regards,

Dear Client,

Good morning and hope you are well.

Following an update from the VAT Department, it seems that what we have informed you about the VAT for the commission income stands as it is.

They have informed me that once the client proceeds with the establishment of a new company in Cyprus they will see this matter closely and inform us how the VAT will be handled.

In addition, if you have any further questions, please do not hesitate to contact us.

Kind regards,

Dear CYAUSE,

Thank you very much for your response about VAT.

I'll be in touch with you as soon as we have our final decision about the registration's country.

Best regards,