ChristineBiz

Yes somewhat, thanks.

Do you know of any U.S. banks operating out of Cyprus?

zygiman

No, but you can "safely" have a bank account with many banks in Cyprus, just keep your funds to a minimum. Keep the bulk of your funds, not forgetting the guarantee limit of €100,000 in the EU, elsewhere if you feel safer. There is no need to transfer all your funds to Cyprus. Banks are going bust everywhere in the world, so spread your risk.

zygiman

Cyprus Corporation Tax raised to 12.5%

Interest & Dividend Tax raised to 30%

Bank levy on deposits raised by banks & credit institutions raised to 0.15%

Gordon Barlow

In December I wrote an item titled "How to buy gold" on my blog, that ended with the words "There is more risk in custody than in price, in these wicked days." I think those words - and zygiman's, "spread your risk" - should be borne in mind by everybody with more assets than just cash enough for next week's groceries.

When even very large banks are having to be bailed out by governments - or, increasingly, by the banks' own customers - it's not at all easy to identify "quality" custodians. Nations are scrambling to pass laws to enable insolvent banks to steal their customers' credit balances - Switzerland, Canada, New Zealand... Cyprus seems to have been just a trial run. In the US, brokers' segregated funds are no longer safe from unauthorised acquisition, for goodness sake.

The situation is so dodgy that I personally am pretty much resigned to losing up to a third of my family's savings, sooner or later. Zygiman, what do you reckon?

zygiman

I agree that Cyprus was a trial run. They could afford Cyprus leaving the Euro, and patch up the ponzi scheme. The point was, Cyprus could not afford to leave the Euro and return to the Cyprus Pound. That was then though. Now many people believe that Cyprus will have just as much pain leaving the Euro as staying in.

People are already looking for other investments, Vintage Cars, Antiques, etc. It was always good financial advice to spread your risks anyway, even more important now. The time has now come for people to keep as less money in banks as possible, and invest in other things so they may have control of their savings.

The time has come for banks, with their large bankers bonuses, to start gambling with their own money, and not with people's money. The withdrawal of funds from banks will give them a real shock, as they will then have to raise money in the markets with strings attached.

zygiman

A new decree allowing the transferring of up to €300,000 in deposits or funds from one credit institution per transaction if the transactions falls within the normal business activity of the customer with the presentation of the necessary justifying documents, without prior approval of the Committee.

zygiman

Cyprus Charities, Insurance Companies & Private Educational Institutions to take a 27.5% loss on their savings.

zygiman

Cyprus interest rates lowered as from 01 May 2013

zygiman

Payments and money transfers from one financial institution to another in Cyprus extended from €3,000 to €10,000 monthly per individual.

zygiman

Business transactions for goods and services limit is €300,000. Over this limit, documentation is required.

zygiman

Payments and/or transfers within the country, for transactions falling under a bank account holder’s usual business activity, are extended to €500,000 per transaction on submission of documentation; for amounts above €500,000, approval is required from a special supervisory committee.

Gordon Barlow

Zygi. How are the importers coping with these daily changes? Supermarkets ordering goods for overseas, for instance: some of them would have been buying a million euros $500K a week of inventory from their wholesale-suppliers on the mainland. Their shelves must have been half-empty the whole time, before the limit was raised to $500K.

As a business consultant to a small chain of supermarkets on my island here in the Caribbean, I'm very interested to know how things are done - in case exchange control is ever imposed by our government. Oh, and how long does the average inventory-purchase take to get approved by the bureaucrats?

Veronica-K

At no time have the shelves in supermarkets been anything other than as full as before, at least not noticably so.
Business people I have spoken to say that they only had problems paying for large purchases for about a week or 10 days and then they were able to get approval within about 24 hours of applying.
As a result containers were delayed at the docks but not long enough to have any real impact on the levels of most everyday goods in the shops.

Gordon Barlow

OK, thanks for that, Veronica; good to know. Very encouraging.

Gadgetgeek

Up to date info on Capital contols by Ministry of Finance can be found here http://www.mof.gov.cy/mof/mof.nsf/in...n?OpenDocument