Establishing Residency in The Republic of Cyprus
Cyprus lies at the crossroads of three continents, occupying a strategic position for access to Europe, Asia and Africa. Its two international airports – Larnaca and Paphos – make Cyprus an excellent platform for travelling throughout Europe and the rest of the world.
This location, together with its membership of the European Union, its culture and advanced infrastructure all make Cyprus a very attractive destination for those looking to establish a European business and/or your primary or secondary place of residence. It also has one of the most attractive tax regimes in Europe.
Its climate, with more than 320 days of sunshine per year, offers the archetypal Mediterranean lifestyle. One of the safest countries in Europe, Cyprus also boasts advanced healthcare services and a great selection of international schools, making it ideal for raising a family.
Establishing Residency in Cyprus
Cyprus offers a range of residency programmes that cater for most personal requirements and budgets, which provide both EU and Non- EU nationals and their qualifying dependants with the right to live in Cyprus and travel throughout Europe. Successful applicants receive a Cyprus residence permit and the following benefits:
Cyprus Non-Domicile Tax Residency Programme
The Cyprus tax residency programme provides preferential tax incentives for qualifying non-domiciled individuals who are resident in Cyprus.
A person is considered non-domiciled if they do not have a domicile of origin or domicile of choice in Cyprus and have not been a Cyprus tax resident for at least 17 of the last 20 years.
The main qualification requirements are as follows:
- ‘The 183-day Rule’ – For an individual to be considered a tax resident of Cyprus under standard terms, they are required to be physically present in Cyprus for more than 183 days in a calendar year.
- ‘The 60-day Rule’ – A reduced physical presence requirement applies to individuals who:
- Maintain (by owning or renting) a permanent home in Cyprus within a tax year.
- Establish a business and/or are employed in Cyprus and/or holds an office with a Cyprus tax resident company at any time during the tax year.
Tax Efficient Benefits
The Cyprus Tax Residency Programme provides qualifying non-domiciled residents the following tax benefits:
- No income tax on dividend and interest related income
- No income tax on salaried services rendered outside Cyprus for more than 90 days in a tax year
- Low progressive income tax rates, with the first €22,000 being tax exempt
- A 50% income tax exemption on income earned through Cyprus based employment provided annual income exceeds €55,000 per annum. The exemption applies for a period of up to 17 tax years
- Those earning less than €55,000 per annum through Cyprus based employment may qualify for a 20% income tax exemption. The exemption applies for a period of up to 7 tax years.
- No tax on profits from disposal of securities, including shares, bonds, options and units in collective investment schemes
- A low corporate tax rate of 15% for Cyprus tax resident companies
- Tax free repatriation of profits and capital
- Overseas Pensions income that exceeds the amount of €5,000 euro is taxed at only 5%.
- No Capital Gains Tax on assets other than immovable property situated in Cyprus
- No wealth, inheritance taxes or gift taxes
Non-domiciled tax status is available for 17 years from the date the individual first becomes a Cyprus tax resident. Non domiciled individuals may also choose to extend the benefits for two consecutive five-year periods by paying a lump sum of €250,000 per period.
Establishing Citizenship Through Naturalisation in Cyprus
To qualify for citizenship though naturalisation, applicants must have lived permanently in Cyprus for 7 years within a 10-year period.
On 23rd of November 2023, the Cypriot government introduced a new law which expedites the time frame for highly skilled professionals to 4 and 3 years. Non-EU nationals living in Cyprus who are highly qualified employees, either working for international companies as directors, key personnel, or specialists, will see their qualifying residency period reduced.
Qualifying professionals must also earn a minimum of €2,500 monthly, hold a university degree or equivalent, have two years’ relevant employment experience and demonstrate a modest proficiency in Greek.
The qualification timeframes applicable under the new rules are reduced to:
- 3 years for B1 Greek language certificate holders
- 4 years for A2 Greek language certificate holders
To be eligible under the new legislation, applicants must also adhere to several essential requirements:
- A prerequisite is 12 months of legal, uninterrupted residence in Cyprus directly before applying, with allowable short absences not exceeding 90 days that do not break the continuity.
- A history of lawful residence in Cyprus for a total of three, four, or seven years within the last decade, tailored to the specific citizenship route chosen.
Please contact us if you have any questions or queries and your local representative will be in touch with you as soon as possible.
