CYPRUS FOREIGN INVESTOR INCENTIVES

Incentives for individual investors in Cyprus are among some of the best in Europe. A tax resident in Cyprus is one who is resident for a minimum of 183 days in Cyprus. This enables the investor to be taxed on income originating within Cyprus as well as internationally. 

 

Requirements

 

However, a special incentive scheme was passed in 2017 to attract high net worth individuals (HNWI), professionals and executives. This is the Cyprus Foreign Investor initiative, which is based on the following requirements: 

 

  1. Non-domiciled tax residency status is gained with only 60 days of presence in Cyprus, providing the investor is not registered in any other tax jurisdiction and does not reside in another country for more than 183 days per year; 
     

  2. Has a business presence or connection to Cyprus, i.e. is formally employed by a Cypriot company; is the owner of a Cypriot company or is the director of a Cypriot company; 
     

  3. Has a personal presence or connection to Cyprus, including a formal place of residence, documented by a property rental contract or property ownership title deeds, and utility bills. 

 

Benefits of Non-Domiciled Tax Residency

 

There are a number of benefits for the foreign investor: 

 

  1. Income Exemption: An individual with a personal salary of over € 100,000, who was not a tax resident of Cyprus before his/her employment, is entitled to a 50% income tax reduction on his/her income. This deduction is valid for 10 years starting on the date of employment, and assuming this income is paid in Cyprus.
     

  2. Income Exemption for Foreign Employees of Cyprus Foreign Establishments: Any employee who is employed by the foreign office of a Cyprus company for more than 90 days per year is exempt from income tax in Cyprus. 
     

  3. Worldwide Tax Exemption: Any worldwide income, including dividends and interest, is exempt from tax. 
     

  4. Securities Tax Exemption: The profit from the sale of securities, including bonds, shares, debentures and other instruments, is exempt from taxation. This does not apply to property taxes in Cyprus. 

 

The advantages of this incentive, particularly for investors with high interest or dividend incomes, are obvious.