IN510 - Moving to Cyprus - The Benefits for Individuals and Key Advantages of Cyprus Companies

Cyprus is an attractive option for individuals seeking to move their country of residence. It offers a warm climate, good infrastructure, and convenient geographic location. It also offers attractive tax advantages for companies and incentives for individuals through the Cyprus non-domicile regime, as well as benefits for highly paid employees moving to Cyprus.

Cyprus is accessible from Europe, Asia and Africa and Nicosia is its capital. The population of Cyprus is approximately 1.2 million with 180,000 foreign nationals living in Cyprus (15% of the population).

Individuals Moving to Cyprus

EU nationals are free to move to Cyprus.

There are two options available to non-EU nationals seeking to relocate to Cyprus:

  1. Cyprus Investment Programme

This programme offers non-Cypriot nationals a means of obtaining a Cypriot passport and freedom to travel, work and reside within the EU. Non Cypriot citizens and their families can acquire Cyprus Citizenship by investing a minimum €2.5 million in Cyprus (€500,000 of the investment must be in a residential property).

A non-Cypriot citizen, who meets the financial criteria detailed below, can apply for citizenship ‘through neutralization by exception’.

Criteria A

  • All applicants must have a privately owned residential property in Cyprus, the purchase price of which must be at least €500,000.

In addition, investment needs to be made in ONE of the following:

  • Investment in the Financial Assets of Cypriot Companies or Cypriot Organisations licensed by CySec

The applicant must purchase financial assets in a Cypriot company or organisation with a minimum value of €2 million.

The company or companies must have a physical presence and substantial economic activity in the Republic of Cyprus.

OR

  • Purchase, Establish or Participate in a Cypriot Business or Company

The applicant must invest at least €2 million through purchase, establishment or participation in a business or company that is based and operating in Cyprus. Such businesses or companies must have a tangible presence in Cyprus and employ at least five Cypriot or EU citizens.

OR

  • Investment in Real Estate, Land Development or Infrastructure Projects

This is by far the most popular investment route.

The applicant must invest a minimum €2 million through purchase or construction of buildings or other land development projects.

If the investment is made ONLY in residential property, and at least one property is worth €500,000, which is a permanent, privately owned residence in Cyprus that will be retained for life, criteria ‘A’ overleaf does NOT need to be additionally met.

This therefore reduces the total contribution required to meet this financial criteria to €2 million (rather than the €2.5 million for each of the other criteria).

OR

  • Investment in Government Bonds

The applicant must purchase Cyprus state bonds to a maximum value of €500,000 and these bonds must be retained for a minimum of three years. This investment option is only available as part of the “Combination of Criteria” detailed below.

OR

  • Combination of Criteria

The applicant must meet a combination of the above criteria, with the total investment amounting to at least €2 million.

Additional Criteria

The applicant and family members must prove that they have no criminal record and their name must not be included on the list of individuals whose property has been frozen in the EU.

A Cyprus passport will be received between three and six months after the application has been submitted. There is no requirement to physically reside in Cyprus either before or after obtaining Citizenship.

Members of the same family can apply separately as investors to collectively acquire a residence. The value of the property must equal at least €500,000 multiplied by the number of applicants.

  1. Cyprus Permanent Residence Permit

A Permanent Residence Permit gives individuals the right to permanently reside in Cyprus and can act as a gateway for the organisation of business activities in Europe. The procedure should take no longer than two months from the date of the application. A permanent residence permit facilitates the acquisition of a Schengen Visa, which enables the holder to travel to all of the other EU countries.

Non-EU nationals who do not intend to be employed in Cyprus must purchase at least one new real estate property in Cyprus, with a total purchase cost of at least €300,000. The main applicant must have a minimum annual income of €30,000 from outside Cyprus.

In addition, a fixed deposit of €30,000 must be transferred to Cyprus for at least three years. This amount increases by €5,000 for each dependant family member (spouse or children) and by €8,000 for each dependant parent.

Benefits Provided by the Cyprus Non-Domicile Regime

New tax laws came into effect in July 2015 which provide significant benefits to high net worth individuals relocating to Cyprus.

Cypriot non-domiciliaries benefit from a zero rate of tax on the following sources of income:

  • Interest
  • Dividends

These zero tax benefits are enjoyed even if the income has a Cyprus source and is remitted to Cyprus.

There are no wealth and no inheritance taxes in Cyprus.

The Benefits of Establishing a Company in Cyprus

In the last decade, Cyprus has become an increasingly popular jurisdiction with international tax planners.

Cyprus offers some of the lowest tax rates in Europe and has over 50 double tax treaties to assist in international tax structuring.

The benefits of establishing a company in Cyprus include:

  • The corporate tax rate in Cyprus is 12.5%.
  • There is no withholding tax on dividends paid from a Cyprus company to its shareholders, as long as the shareholders are not Cyprus tax resident.
  • Tax relief is available in the form of tax credits for withholding tax on income received in Cyprus.
  • There is no taxation on dividend income (subject to conditions).
  • The incorporation process is simple and straightforward.
  • No restrictions on individuals acting as directors and/or shareholders.
  • Fast and efficient procedure for opening a bank account.

Benefits for Employees in Cyprus

Individuals earning more than €100,000 per annum in Cyprus, and not previously resident there for work purposes, are entitled to a tax exemption of 50% on their employment income in Cyprus, for a period of 10 years.

Cyprus’ standard income tax rates are:

  • €0 - €19,500 - 0%
  • €19,501 - €28,000 - 20%
  • €28,001 - €36,300 - 25%
  • €36,301 - €60,000 - 30%
  • Greater than €60,000 - 35%

How Can Dixcart Assist?

  • Dixcart has been providing professional expertise to organisations and individuals for over 45 years.
  • Dixcart has staff located in Cyprus who can provide a detailed understanding of the Cyprus Residence Programmes, the obligations that need to be met by applicants and the fees involved.
  • Dixcart can assist with applications for the Cyprus Residence Programmes, draft the relevant documents and submit and monitor the application.
  • Dixcart can assist in organising visits to Cyprus and finding property on the island.
  • Dixcart offers advice regarding efficient restructuring of worldwide assets.
  • Dixcart can provide assistance in establishing and managing a company in Cyprus.

Additional Information

For more information on relocation to Cyprus, please contact Robert Homem in the Cyprus office: advice.cyprus@dixcart.com or speak to your usual Dixcart contact.

Categories: Cyprus, 2018, Dixcart Domiciles