The Cyprus Government, in order to encourage foreign investments, offers Investment Programs with which investors may acquire permanent residence permits or the citizenship of the Republic of Cyprus.

These programs have been particularly popular for a number of reasons:

  • The political stability of Cyprus
  • The extremely favorable tax regime in Cyprus
  • The status of Cyprus as a full member of the EU and the Eurozone
  • The exceptional infrastructure of Cyprus which has established it as a reputable financial center
  • The working and living conditions in Cyprus due to its safe environment and ideal climate

According to these programs, foreign citizens, together with their spouses and children, may obtain

  • Permanent Residence Permit (certain conditions apply including, but not limited to, the obligation to purchase a residential property of a minimum value of €300,000).
  • Non-dom tax residency

Cyprus
Cyprus is the third largest island in the Mediterranean and is strategically located between three continents, Asia, Europe and Africa.
It is a member state of the European Union, a member of the Eurozone and it offers a solid legal system and a favorable tax regime which, over the years, established it as a popular and reputable international business center.
With its long history, excellent infrastructure, safe environment and ideal climate with almost year-round sunshine, Cyprus offers an excellent place to work and live.

Cyprus Residency

Benefits

  • Fast track procedure requiring only 2 months.
  • The investment required is only €300,000 (plus VAT if applicable) in property.
  • The residence permit is granted to the main applicant, their spouse, dependent children up to the age of 25 and the parents of both spouses.
  • Residence permits issued to dependent children are not revoked when they lose their dependant status or when they pass the age of 25.
  • Permanent residence permit holders are free to enter and live in Cyprus as they please but are not obliged to relocate to Cyprus.
  • The possibility of becoming a Cyprus tax resident that has significant tax advantages.
  • No transfer fees for properties which are subject to VAT.
  • A 50% reduction of transfer fees for properties which are not subject to VAT.
  • No capital gains tax on profits from the sale of properties purchased before 31/12/2016 regardless of when these will be sold.
  • No inheritance tax.
  • No SDC tax on rental income and no tax whatsoever on dividend and interest income.

Requirements

To obtain a Permanent Residence permit applicants should:

  1. Purchase one or more new residential properties of a total value of at least €300,000 (plus VAT if applicable).
  2. Pay at least €200.000 (net of VAT if applicable) towards the purchase before the application is submitted.
  3. Provide evidence that the purchase is made with funds received from abroad.
  4. Provide evidence that the applicant’s annual income from abroad, such as salaries, pensions and dividends, amounts to at least €50.000. This amount is increased by €15.000 for the spouse and €10.000 for any dependant family member (spouse or children) and by €8.000 for any parent of the main applicant or their spouse.
  5. Provide proof of a clean criminal record and private health insurance.
  6. Visit Cyprus at least once every two years.

Non-dom tax residency

Benefits

  • Dividends and interest are exempt from Cyprus income tax.
  • Profit from sale of shares and other qualifying titles is specifically exempt from Cyprus taxation, provided that the underlying assets do not include immovable property located in Cyprus.
  • First €19,500 of taxable income is tax exempt. Any taxable income in excess of this amount is taxed at progressive rates ranging from 20% (for income exceeding €19,500) to 35% (for income exceeding €60,000).
  • 50% exemption for remuneration from employment exercised in Cyprus by persons who were resident outside Cyprus before commencement of their employment. The exemption applies for 17 years commencing from the year of employment, if such income exceeds €55,000 per year.
  • 100% exemption on remuneration for salaried services rendered outside Cyprus for more than 90 days in a tax year to a non-Cyprus resident employer.
  • 100% exemption on lump sum payments from life insurance schemes or from approved provident funds.
  • Overseas pensions are exempt from tax up to the amount of €3.420 and taxed at the rate of 5% thereafter. The taxpayer may opt to be taxed in the normal way, where this special mode of taxation of income results in a higher tax liability (this election can be made from year to year).
  • Flat taxation at the rate of 8% (minimum tax of €10.000 per annum) available to fund managers of specific Cyprus-based funds in regards to earnings from carried interest, under conditions.
  • No inheritance and gift taxes. • No wealth taxes. • No immovable property taxes.
  • Capital gains
    • Capital gains tax is only imposed on the disposal of immovable property situated in Cyprus, as well as on the transfer of shares directly or indirectly held in companies (other than listed shares) in which the underlying asset is immovable property situated in Cyprus and at least 50% of the fair market value of the shares is derived from the immovable property.
    • The sale of immovable property situated outside Cyprus is exempt from capital gains tax.

Requirements

To obtain a non-dom tax residence permit applicants should:

  1. Spend at least 183 days in Cyprus per annum or at least 60 days without spending more than 183 days in any other country.
  2. Not be tax residents of any other country
  3. Maintain a permanent home in Cyprus (owned or rented)
  4. Engage in business in Cyprus or be employed in Cyprus or hold an office in a Cyprus tax resident company at any time during the tax year.

For more information please contact us.