How to Establish Tax Residency in Cyprus
February 27, 2025
According to ancient Greek mythology, Aphrodite, the goddess of love and beauty, was born from sea foam off the coast of Cyprus.
Petra tou Romios, also known as Aphrodite’s Rock, rises dramatically from the crystal-clear waters of the Mediterranean near the spot where she was supposedly born.
Local legend recounts how swimming around this iconic rock brings good luck in love.
It’s a great story and just one of many that underpin Cypriot country. But while the legends remain in the past, Cyprus is a forward-looking country.
Visitors may choose to rely on the mysterious Aphrodite rock for good fortune in romance, but investors won’t have to rely on chance to experience financial and personal success in Cyprus.
Well-known for its favourable tax regime, Cyprus welcomes individuals seeking to establish tax residency and enjoy all the perks that come with it.
For most people, taxes consume a considerable amount of annual income. Cyprus does not tax capital gains on most overseas assets, wealth, or inheritance.
In the world of tax residency, Cyprus, with its low-tax outlook and stable economy and society, is a great option for some, though not for everyone.
There’s a lot to consider when establishing a tax residency in Cyprus, and, as always, getting the right advice from the start can save you lots of time, effort, and money.
Rather than relying on local providers, it pays to have impartial advice from international experts with no specific allegiance to any one jurisdiction.
That’s just one of the reasons people choose Nomad Capitalist – we have direct experience across multiple jurisdictions and will help you weigh up the pros and cons of each.
We’ve helped more than 2,000 clients do just that. We want to work with you, too. Just reach out and let us help you ‘go where you’re treated best’.
Why Cyprus?
Cyprus has several appealing aspects that draw people from all over the globe, including its temperate climate, natural beauty and low crime rate.
In the past, at least, you could justify Western Europe’s high costs and taxes by appealing to the region’s relative stability and growing economies. But today, high costs and taxes seem less and less justified.
Places like Cyprus offer wealthy people greater financial success, a warm welcome and low taxes. In Cyprus, there is no capital gains tax on assets other than immovable property located in the country.
However, the main advantage of Cypriot Tax Residence is its non-domiciled tax regime for expats.
In simple terms, non-domiciled Cyprus tax residence status means you’re exempt from being taxed on income from dividends, interest and rental income, regardless of where the income is sourced.
To succeed in getting non-domicile status, you must prove that either you or your father was born in another country and that you plan to eventually return to that country.
To be eligible, you must be:
- A tax resident for at least 60 days during a tax year
- Carry out business activities or be employed in a Cyprus tax resident company
- Have a permanent residence in Cyprus by either renting or owning a home.
Income from employment carried out outside Cyprus is exempt from Cyprus income tax, provided that the employment exceeds 90 days per tax year.
Proper business structuring is required to ensure it does not trigger unwanted Permanent Establishment or Controlled Foreign Company (CFC) tax implications.
The most significant benefit of Cyprus’s Tax residence and non-domiciled taxation is that this regime is valid for 17 years. Non-dom tax status in Cyprus benefits those who get most of their income from dividends and capital gains.
In addition, Cyprus has agreed to treaties with more than 60 countries to avoid double taxation.
Tax Residency in Cyprus
If Cyprus’s tax system sounds appealing, you may be wondering about the requirements for obtaining a tax status in the country.
Cyprus counts you as a tax resident if you:
- Spend 183 days in Cyprus.
- Spend 60 days in Cyprus under the condition that you:
- Do not spend more than 183 days a tax year in any other country
- Are not tax residents anywhere else
- Carry out any business in Cyprus
- You are employed in Cyprus or hold an office at a company (like being a business director)
- Maintain a permanent residential property in Cyprus that you own or rent in the tax year.
You must spend at least 60 days in Cyprus each year to renew your tax status. You also cannot spend 183 days or more in any other country to be counted as a tax resident of Cyprus.
Cyprus Tax Residency Application Process
Cyprus has several pathways to residency. Below, we’ll provide the basic details for gaining residence by forming a company. Although the process sounds complicated, you don’t have to go through it alone.
Check out our services and let us handle the hard work for you.
Cyprus Tax Resident by Company Formation
If you’re unable to spend 183 days in Cyprus and the 60-day rule suits you better, then forming a company on the island is a mandatory requirement.
There’s no need to worry about transferring all your business activities to Cyprus. In fact, we don’t recommend you transfer anything near the majority if your current business structure is tax-optimised.
In terms of forming a company, you’ll need to provide the following:
- Name of the company to check its availability
- Names, ID/Passport numbers, birth dates, jobs and addresses of the company’s directors, secretary and shareholders
- Purpose and activities of the company.
Once you have prepared these documents, the following steps are as follows:
- Form a Cypriot company and hire yourself as a director. You will need to pay yourself a salary and make mandatory social contributions
- Obtain a Social Security Number and open a corporate bank account in Cyprus, which can take up to three months
- Transfer a minimum of €41,000 to the bank account to satisfy Cyprus immigration laws
- Apply in person for the employment permit and temporary residence at the Civil Registry and Migration Department
- Wait up to six months for approval.
For EU and non-EU citizens, becoming a tax resident in Cyprus is the same process. However, EU citizens are not required to obtain special permits to live in Cyprus, while non-EU citizens need to obtain the correct visa and permit.
If an individual has paid all their taxes, they can obtain a tax certificate from the Cyprus Tax Office to show to other countries.
Are you tired of shelling out a significant portion of your hard-earned income in yearly taxes?
If you aspire to live in a Mediterranean paradise that offers enticing tax benefits, look no further than Cyprus.
If you want to pursue citizenship, residency is a great way to start the process. The good news is that Cyprus recently updated its residency requirements for citizenship, meaning you now only need to wait four to five years rather than the previous seven.
Our philosophy at Nomad Capitalist is that going where you are treated best can help you realise the best combination of tax planning, second residence, dual citizenship and asset protection. Let us shape a holistic plan tailored to your needs.
How to Become a Tax Resident in Cyprus: FAQs
Under the Cyprus Income Tax Law, there are only two ways to become Cypriot tax residents: the 60-day rule or the 183-day rule.
A tax resident of Cyprus is an individual residing in the Republic for one or more periods totalling more than 183 days within a tax year and an individual who meets the conditions under the 60-day rule (for every tax year). The conditions for the 60-day rule are that the Cyprus tax resident person:
Resides in Cyprus for one or more periods for an aggregate of at least 60 days
Does not reside in any other single state for one or more periods exceeding 183 days in total
Is not considered tax resident by any other state for the same tax year
Carries out business in Cyprus, is employed in Cyprus or holds office (i.e., directorship) in a company tax resident in Cyprus until 31 December of every tax year)
Maintains a residential property in Cyprus, either owned or rented.
Cyprus are calculated as follows:
The day of departure from Cyprus counts as a day of residence outside Cyprus
The day of arrival in Cyprus counts as a day of residence
Arrival and departure from Cyprus on the same day count as one day of residence in Cyprus
Departure and arrival in Cyprus on the same day count as one day of residence outside Cyprus.
For this tax residency status, you need to obtain a unique tax number from the Tax Department. This tax number comes in very handy when opening bank accounts.
You also need to prove that you are not Cypriot by descent by sharing your parents’ birth certificates. As a company director, you must pay 8.8% of your employer-based income to National Insurance. Additionally, your profits from a Cypriot company will be subject to the standard corporate tax rate of 12.5%, although start‐ups can pay less. But remember, we said that if you have a tax residence in Cyprus, your main operating business should be outside the country. Under the country’s income tax law, you are exempt from any income tax (provided you take dividends instead of salary) on the income you’ve earned working for a Cypriot company for 17 years.
Geographically, Cyprus forms part of Asia but is an EU member state. Cyprus lies south of Turkey and west of Lebanon.
Yes. Greek and Turkish are the official languages. However, Cyprus was ruled by Britain before becoming independent in 1960, and therefore, English is still widely spoken.
Capital gains tax is charged at a rate of 20% for non-residents on immovable assets based in Cyprus.
No, personal income tax rates range from 0%-35%. Corporation tax is charged at a rate of 12.5%.
It depends on your definition of a tax haven. Some people consider Cyprus a tax haven because there is no tax charged on most types of income earned overseas.
Interested in Becoming a Cyprus Tax Resident?
Cyprus is a tax-friendly jurisdiction for investors and entrepreneurs who generate income in a different country, plus it only takes 60 days on the island to become a tax resident there.
It’s a pleasant place to spend a couple of months a year, perhaps as part of a Trifecta strategy.
The Mediterranean island enjoys warm summers and mild winters. Its population is mostly English-speaking, and there are plenty of opportunities to network with like-minded entrepreneurs.
It’s usually not that simple to figure out where Cyprus could fit in your nomad tax strategy or even if it’s a suitable fit for your scenario at all.
That’s where Nomad Capitalist comes in.
We’ve helped 2,000+ high-net-worth individuals to ‘go where they’re treated best’, whether that’s by moving their business offshore, moving to a tax-friendly jurisdiction or even seeking a second citizenship.
Learn more about our holistic Nomad Capitalist plans and how they could help you here.
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