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Posted by Cyp08 - Created: 9 years ago
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7 replies (Showing replies: 1 to 7)

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Posted by Cyp08 - 9 years ago

Contract signed now. NO Guaranture`s, no nothing.

We are now opening our Business Bank Account with Cyprus Bank.

Hassle over and done with....................

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Posted by Cyp08 - 9 years ago

Thanks AndrewMoni. They wanted €60,000 full stop, no money back at all each year. They would have our money in a frozen account with no interest on it at all.
We seemed to have come an arrangement with the solicitors of the Landlady.

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Posted by AndrewMoni - 9 years ago

What confuses me about this is as follows:

If the annual rental is 12000 then it seems pointless to have a guarantor for 12000 and the amount deposiited - it may as well just go to the landlord as rent in advance. Furthermore, if the 5 year rental is 60000 then the full amount should not need to remain on deposit for the full period as the outstanding amount is reducing annually. Seems as though someone (the bank) is just trying to make money for nothing. I dont see the need for a guarantor if you pay annually in advance - what has the landlord got to lose even if you do a bunk?

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Posted by achilleas - 9 years ago

I am sorry, but if you think anyone, without knowing you and with no security, is going to give you a letter of credit, for which they will be liable for if you do a runner, then you really are very optimistic.
Even if you are going to spend a considerable amount on equipment, etc., then no one would give you that letter.
People are skeptical and want "in advance" and "guarantees" because people have done just that.

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Posted by newlyweds - 9 years ago

We set up our shop and all we had to guarantee was 6 months rent. We had to have the money in the bank and it is the bank who issue the letter. When the letter is issued they freeze the amount. I have to say that we do have a very good landlord who is a real businessman not one who is playing at it and going for the short term gain, sadly the good ones are very hard to find. It took us 9 months to find a shop in the end. I would try to negotiate the terms if I were you.

Good Luck

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Posted by catmeister212 - 9 years ago

No-one is going to give you a Guaranture for free. So what happens if you miss a payment? Having money in England does not mean anything, Cyprus has no legal jurisdiction to demand money from another country. You need to have your assets in Cyprus be it money or property. Otherwise your guarantor will be risking 60K euros from their own pockets.
You can very easily disappear back to England and your guarantor will be forced to pay your payments. This is why they want you to have assets in Cyprus, that way you cannot disappear and if you do, the asset they "freeze" from your use, is a guarantee that if things go wrong they can access that fund to pay for it.

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Posted by lime-676998 - 9 years ago

Letter of guarantee would usually mean an irrevocable undertaking to the third party (here - seller) by a guarantor (here - bank) to pay for the obligations of the principle (here - you). Lets say you default on your payments - the bank would be forced to cough up the cash to pay to the seller for your obligations. As such, the obligations of the bank are rather significant, thus the bank is not going to do anything until it obtains some protection (here - frozen deposit account).

If you have the requisite amount of money in a foreign bank, you could do one of the following:

1) Try to get the seller to accept a letter of guarantee of the foreign bank. Theoretically, this should be good enough, unless the bank is in a very unstable financial situation.

2) Try to get the the local bank to issue a guarantee against a letter of guarantee of the foreign bank (is likely to be much more expensive due to fees charged by each bank)