Cyprus, A Welcoming Mediterranean Island for Affluent Individuals - September 2023
Cyprus as a member of the EU, is an attractive destination for wealthy European and international migrants and their families, thanks to its political stability, growing economy, low crime rate, competitive tax rates, strategic location, and favourable business environment.
Director - Business Development, Cyprus
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The Cyprus government has established the island as a regional financial and business hub, attracting professionals from various fields whist bringing diversity and cultural enrichment. It has implemented a strategy to incentivise foreign talent to relocate to the island, which has contributed very positively to the country's economy and broadened its demographic composition. This strategy includes work permits, permanent residency schemes, Non-Dom status and various tax incentives, including income tax exemptions and the 60-Days Tax Residency rule.
60-Days Tax Residency
Individuals who spend at least 60 consecutive days per year in Cyprus can be considered tax residents of the country, and as such eligible for favourable tax rates and exemptions.
In addition to residing in Cyprus for at least 60 days, individuals must also meet the following conditions to qualify:
- do not reside in any other country for a period exceeding 183 days per year
- are not considered tax resident by any other country
- have other defined Cyprus ties, i.e. carrying out any business in Cyprus and/or being employed in Cyprus and/or holding an office (director) of a company tax resident in Cyprus at any time in the tax year, provided that such is not terminated during the tax year
- maintain in the tax year a permanent residential property – either owned or rented - in Cyprus.
Cyprus tax residents are subject to income tax on their worldwide income but can benefit from a wide range of exemptions and deductions, including:
- Depending on the amount of income, a progressive tax rate which varies from 0% to 35% (where income up to €19,500 is tax free)
- Dividends, interest, and profits from the sale of securities are tax free
- No inheritance tax or wealth tax
- Double taxation treaties with numerous countries, which can help avoid or minimize double taxation.
Individuals can benefit from certain tax advantages by being considered non-domiciled in Cyprus. Non-Dom status can be obtained by individuals who were not tax residents of Cyprus for a period of 20 consecutive years before the tax year in question.
Some of the benefits of Non-Dom Status include:
- Exemption from taxation on dividend income, irrespective of its source (whether local or foreign)
- No tax on interest income earned both locally and internationally
- No Special Defence Contribution tax on rental income
- Reduced or eliminated taxation on capital gains arising from the disposal of certain assets
Cyprus offers several other reasons why it may be an attractive destination for economic migration and why individuals might consider the 60 Days Tax Residency and Non-Dom regimes:
- Strategic Location: Cyprus is strategically located at the crossroads of Europe, Asia, and Africa. Its location offers excellent connectivity and access to markets in Europe, the Middle East, and beyond. For businesses and professionals involved in international trade, Cyprus provides a convenient base for operations and networking.
- Growing Economy: Despite being a relatively small country, Cyprus has experienced robust economic growth in recent years. The country's economy is diverse, with sectors such as tourism, real estate, financial services, shipping, and technology contributing to its development. Economic migrants may find ample job opportunities and a thriving business environment.
- Quality of Life: Cyprus offers a high standard of living with a Mediterranean climate, beautiful beaches, and a relaxed lifestyle. The island is known for its safety, quality healthcare, excellent education system, and cultural heritage.
- English Proficiency: English is widely spoken and used in business and daily life in Cyprus. This makes it easier for English-speaking migrants to communicate and integrate into the local community.
- EU Membership: Cyprus is a member of the European Union (EU), which provides certain benefits and opportunities. EU membership allows for freedom of movement within the EU, facilitating travel, work, and business across member states.
How We Can Help
Each individual's situation and goals are unique, so taking some expert advice and seeking the support of an experienced third party are crucial when considering economic migration to Cyprus or any other country. Our specialist team in Cyprus can assist with:
- Preparing and submitting the relevant application forms and communication with the local Tax and Immigration authorities.
- Opening and administering a Cyprus bank account.
- Drafting rental, purchase and other related contracts.
- Undertaking due diligence reports on investments (properties, purchasers, sellers etc.)
- Drafting rental, purchase and other related agreements
- Providing corporate administration and fiduciary services in relation to investments and holding companies.
- Arranging the transfer and registration of property before the Lands and Surveys Department and conducting all required actions to effect a transfer.
If you are relocating or planning to establish a company, trust or fund in Cyprus and want to learn more about the jurisdiction or discuss how we can assist you, please contact Christina Economou in our Cyprus team at email@example.com