You no longer have to prove that property is to be purchased with foreign currency. The Central Bank of Cyprus, which is the supervisory authority for all banks operating in the Republic of Cyprus, introduced the Capital Movement Law in 2003, which aimed to harmonise Cyprus legislation with that of the EU’s Free Movement of Capital laws. Certain amendments to banking law are currently under review, following the country’s EU accession. Always check with your financial adviser or the Central Bank in Cyprus about the latest regulations.
The Capital Movement Law specifies that cash in any currency or gold up to the value of €12,500 may be freely imported or exported into Cyprus. The Central Bank of Cyprus operates strict anti-money laundering regulations and so any sums higher than that (especially those in cash) must be declared to Customs and Excise at the port of entry.
All banks are required to obtain full identification from account customers, be familiar with customers’ normal account movements, and report any amounts deposited in excess of US$100,000, especially if they’re in cash. Transfers of capital are tax free, but any worldwide income is liable to be taxed.
International Bank Transfers
If you plan to import money to Cyprus for the purposes of buying property or setting up a business, there are a number of ways it can be done, all of which are detailed below. When transferring money to Cyprus, research the best exchange rate and the lowest costs.
Banks are sometimes willing to negotiate on fees and exchange rates when you’re transferring a large amount of money. If you intend to send a large amount of money abroad for a business transaction such as buying a property, you should ensure that you receive the commercial rate of exchange rather than the tourist rate. Keep well informed about exchange rate fluctuations, so that you’re able to negotiate effectively with a bank.
Don’t be optimistic about the exchange rate, which can change at short notice and mean that your property purchase can cost you a considerable amount more than you planned.
When transferring or sending money to (or from) Cyprus, you should familiarise yourself with the alternatives and shop around to get the best deal. Before you decide on the best method of transferring funds, check the charges and how soon your money will be available to use. You will be charged by the bank in Cyprus and the bank in your home country.
Compare your bank’s rate with that of at least one foreign exchange broker who specialises in sending money abroad (particularly large sums). Some of these companies allow you to fix or guarantee the exchange rate for an agreed period, or set upper limits on the rate that you’re prepared to accept, although you must pay for these facilities. The leading companies include Currencies Direct (Tel. UK 020-7813 0332, www.currenciesdirect.com), Foreign Currency Direct (Tel. UK 01494-725353, www.currencies.co.uk) and Moneycorp (Tel. UK 020-7808 0500, www.moneycorp.com).
All commercial banks in Cyprus are members of the Society for Worldwide Interbank Financial Telecommunication (SWIFT) and this is probably the fastest and most efficient method of transferring money to and from Cyprus. The bank that initiates the transfer will charge you a fee and, although a transfer theoretically takes as little as two or three hours, it may be several working days before you actually gain access to your money.
Transferring funds within Europe has been made simpler with the introduction of the International Bank Account Number (IBAN), which standardises the procedure and identifies an account held at any bank anywhere in the world. Despite its name, the IBAN is not a separate bank account number but precedes your own account number and contains the country code under the IBAN system, certain check digits and the bank branch reference number.
One of the quickest (it takes around ten minutes) and safest methods of transferring cash is via a telegraphic transfer, e.g. Moneygram, which also has an E-Moneygram service, allowing you to transfer via the internet (Tel. UK 0800-666 3947, www.moneygram.com) and Western Union (Tel. Cyprus 22-710 400, www.westernunion.com). However, this method is one of the most expensive, e.g. commission of 7 to 10 per cent of the amount sent!
Bank Drafts & Personal Cheques
For UK citizens, a bank draft or a personal cheque drawn on a UK bank account is acceptable for credit into an account in Cyprus. Check with your bank in Cyprus to see how long it will take to clear a bank draft or cheque. Clearance of personal cheques can take a long time (currently 22 working days). Some banks may offer a shorter clearance service than others to established customers.
This is a standing instruction to allow the bank to transfer funds to a specific account at a later date. You should set this up well in advance so that when you need to use the service, procedures can be set in motion smoothly and effectively. Once it’s set up, this is usually a very efficient way of transferring money to Cyprus from abroad.
This article is an extract from Buying a Home in Cyprus. Click here to get a copy now!