Cyprus has long been recognized for its favorable tax environment, attracting individuals and businesses seeking efficient financial planning and strategic relocation. As of 2025, the Cypriot tax landscape continues to offer significant advantages, particularly through its tax residency rules and non-domicile (non-dom) status.

How to Qualify for Tax Residency in Cyprus

Cyprus provides two pathways for individuals to achieve tax residency:

183-Day Rule

An individual qualifies as a tax resident by spending at least 183 days in Cyprus within a calendar year.

60-Day Rule

Introduced in 2017, this alternative offers more flexibility. To qualify, an individual must:

• Spend at least 60 days in Cyprus during the tax year.
• Not reside in any other country for more than 183 days in the same year.
• Be employed, engage in business, or hold a directorship in a Cyprus-based company.
• Maintain a permanent residence in Cyprus (owned or rented).
• Not be a tax resident of any other country during the tax year.

The Non-Domicile (Non-Dom) Advantage

The non-dom regime is one of Cyprus’s most attractive features, offering substantial tax exemptions for qualifying individuals. Designed to appeal to expatriates and foreign investors, it eliminates certain taxes on global income, even for Cyprus tax residents.

Tax Benefits for Non-Doms

• Dividends: Exempt from the Special Defence Contribution (SDC), regardless of their source.
• Interest Income: Completely exempt from SDC.
• Rental Income: Exempt from SDC but subject to personal income tax, with significant deductions (e.g., 20% of gross rental income and related expenses).
• No Wealth or Inheritance Taxes: Cyprus imposes neither, making it highly appealing for long-term financial planning.

Who Qualifies?

Non-dom status is available to individuals who:

• Have not been domiciled in Cyprus (by origin or choice).
• Have not been tax residents in Cyprus for at least 17 of the last 20 years.

Personal Income Tax Rates and Incentives

Cyprus offers a progressive tax system with competitive rates and exemptions designed to attract talent and investment:

Personal Income Tax Rates

• Up to €19,500: 0%
• €19,501–€28,000: 20%
• €28,001–€36,300: 25%
• €36,301–€60,000: 30%
• Over €60,000: 35%

Incentives for High Earners

• 50% Exemption: Available for individuals earning over €55,000 annually for up to 17 years, provided they were not Cyprus tax residents for at least 10 consecutive years prior to employment.
• 20% Exemption: For those earning below €55,000, a 20% exemption or €8,550 (whichever is lower) is available for seven years.

Corporate Tax Benefits

Cyprus boasts one of the lowest corporate tax rates in the European Union at just 12.5%. When paired with the non-dom regime, it creates significant opportunities for entrepreneurs, executives, and corporations seeking efficient tax structures. Businesses operating in Cyprus can also benefit from the island’s strategic location as a gateway to the EU, Middle East, and Africa.

Double Tax Treaties

Cyprus has signed over 60 double tax treaties with countries worldwide. These agreements minimize the risk of double taxation on foreign income and provide reduced withholding tax rates on dividends, interest, and royalties. This extensive network further enhances Cyprus’s appeal for international investors and professionals.

Recent Global Tax Policy Developments

Shifts in tax policies across key jurisdictions have made Cyprus even more attractive:

• United Kingdom: The planned abolition of the UK’s non-domicile tax regime by 2025 is prompting high-net-worth individuals to seek alternative jurisdictions.
• Italy: The recent doubling of Italy’s flat tax on foreign income for new arrivals has discouraged expatriates, making Cyprus a compelling alternative.
• Spain: The termination of Spain’s golden visa program has driven property investors to explore Cyprus’s investor-friendly policies.

These shifts underscore Cyprus’s strategic importance as a stable and rewarding destination for individuals and businesses.

Conclusion

Cyprus’s strategic location, combined with its advantageous tax residency rules, non-dom status, and competitive tax rates, continues to make it an appealing destination for individuals and businesses aiming for financial efficiency and growth. The flexibility in residency options and the comprehensive tax benefits underscore Cyprus’s position as a leading choice for relocation and investment in 2025.

Note: Tax laws are subject to change. It is advisable to consult with a tax professional or legal advisor for personalized guidance.