Non-Dom Cyprus Status

Cyprus’ location between continents is as strategic as it is central. Located in the cross-section of Africa, Europe, and Asia, it enjoys a low crime rate and a luxurious way of life.  As an EU member with connections in most major continents, it earned a spot on the coveted Forbes “Best Countries for Business” list. Better yet, it’s made its non-domicile status attractively easy to leverage. 

In the case of Cyprus, a Non-Dom tax residency allows individuals to benefit from certain tax exemptions and incentives designed to attract high-net-worth individuals and professionals. The “non-domiciled” status is available to individuals who do not have a permanent home or connection to Cyprus (i.e., they are not “domiciled” there, even if they are tax residents). Cyprus has introduced this status as a way to attract global talent, business people, and investors by offering them significant tax benefits, particularly for individuals who are not originally from Cyprus but wish to establish residence in the country.

Key Benefits of Cyprus Non-Dom Progam:

The program foregoes all remittance-based taxation; therefore, you can hold, distribute, or move capital earnings internationally freely.

• Exemption from Dividend and Interest Taxation: Individuals who are considered non-domiciled tax residents are exempt from tax on dividend income and interest income earned worldwide for 17 years. This is a particularly attractive benefit for investors and individuals with significant global assets. Exemption on Capital Gains from Securities: Profits arising from the sale of securities (such as shares, bonds, debentures, etc.) are exempt from taxation in Cyprus. This includes capital gains on investments and the sale of shares, which is a major incentive for individuals involved in financial markets or business investments.

• Salary Tax Exemptions for High-Earners: Cyprus allows Yearly income below 19.500 € to be income tax-free. Further, Cyprus provides a 50% tax exemption on income earned from employment if the individual’s salary exceeds €55,000 annually. This exemption lasts for 17 years, offering significant tax savings for high-income earners.

• Exemption from Tax on Employment Income Earned Abroad: Salaried employment income earned from work carried out outside of Cyprus is exempt from Cypriot tax if the individual is employed by a non-Cyprus tax resident employer and spends more than 90 days outside Cyprus during a tax year.

• No Inheritance or Wealth Tax: Cyprus does not impose inheritance tax, wealth tax, or estate tax, making it an attractive jurisdiction for individuals with substantial family assets or wealth.

• No Capital Gains Tax on the Sale of Property (Under Certain Conditions): While Cyprus does impose capital gains tax on the sale of property, the sale of immovable property can be exempted from tax under certain conditions if the property is used for specific business purposes. 

• Access to EU Benefits: As a member of the European Union, Cyprus provides non-domiciled residents with access to various benefits within the EU, such as mobility across EU member states and access to certain EU programs and rights, including healthcare.

To qualify for Non-Dom tax residency in Cyprus, individuals must meet the following conditions:

Tax Residency: The individual must spend more than 60 days in Cyprus during a tax year and meet certain other criteria, such as:

• Not spending more than 183 days in any other country.
• Not being a tax resident of any other country.
• Carrying on business in Cyprus or being employed by a Cyprus-based company.
• Permanent Residence: The individual must maintain a permanent residence in Cyprus, either through ownership or rental.
• Non-Dom Status: The individual must prove that they are not “domiciled” in Cyprus, which means they do not have a permanent home or family ties in the country.

Why Choose Cyprus for Non-Dom Status?

Cyprus is an attractive destination for high-net-worth individuals due to its combination of favorable tax laws, EU membership, a high standard of living, and strategic location. Almost every foreign Cyprus resident can benefit from the Non-Dom system since the law doesn’t impose any financial threshold or distinctions for EU and third-country nationals. However, there are several variances if you wish to obtain a visa to reside in the country based on your EU, non-EU, or financial status.

The Non-Dom regime is especially beneficial for individuals seeking to optimize their tax planning while enjoying a high quality of life in a safe and stable environment. According to the Cyprus tax laws, if an individual is a tax resident under the 183 or 60 days’ rules, though he is non-domiciled, he is still exemplified from the Special defense contributions

In summary, the Non-Dom tax residency status in Cyprus offers substantial benefits such as exemptions on dividends, interest, and capital gains tax, making it a highly attractive option for individuals looking to maximize their wealth and enjoy the benefits of Cypriot and EU residency. 

The Non-Dom Certificate

After you complete the application and you’ve met all the requirements, your certificate comes with a 17-years guarantee by Cyprus and the EU.

If you are a national from EU countries, you have no visa restrictions, but you must notify a migration officer once you enter the nation. If you are a third-country national, you must apply for a permanent resident permit.