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Cyprus and EU capital control, open offshore account

It's been a couple of turbulent weeks for Cyprus, after the disastrous decision was made to levy haircuts on bank accounts in Cyprus. From the beginning it looked like it would affect all banks, even the sounder ones that we have been working with. We now know that it will only affect Bank of Cyprus and Cyprus Popular Bank (Laiki), both of which we have not been dealing with. However it was also decided to impose capital controls, something that will affect all bank accounts in Cyprus and make it more difficult to move money out from the country. The official press release say that these measures will only be imposed for 7 days. But in our opinion it will take weeks, until they gradually try to remove them. We recommend everyone to start making preparations to move their money out from Cyprus, but also from other EU-countries Italy, France, Spain and Greece. In the longer run we think even stronger EU-countries like Belgium, Luxembourg, Germany, Netherlands and Finland. Even Sweden and Denmark (non-euro countries) are in dangerous territory with one of the highest Loan to Deposit ratios in the world.

In our opinion Switzerland is the only true safe haven in Europe. Outside of Europe, you have Hong Kong, Singapore, but even smaller offshore centers like Belize have a very sound banking system with capital adequacy ratios of around 20%.

For Cyprus corporate account holders, we recommend to open a second corporate account in Switzerland for 595 EUR (normally it is 995 EUR, but for a limited time, existing clients with a Cyprus company will receive a 400 EUR discount).

So don't wait, act now to save your hard-earned assets, whether it is moving your assets to Switzerland, Hong Kong, Singapore or Belize (or other possible jurisdictions).

For more details regarding the capital controls put in place, please see below:

For payments up to €5.000 no restrictions;

For payments of between €5.001 and €200.000 they will need to produce related contracts and invoices. Payment orders received by each bank that fall into this category will be gathered (by the bank) and sent as a total to the Central Bank of Cyprus for approval, based on the bank's liquidity, within 24 hours;

For payments larger than €200.000 along with the supporting docs (contracts and invoices) each individual payment will be sent to the Central of Cyprus for approval--this might take 48 hours.

The above restriction are in place for the next 7 days.

Inter group company Loan Agreements are not expected to be approved by the Central Bank. Also banks will look for the breaking down of transactions below the €200.000 threshold to prevent abuse of the above restrictions.