Category: Residence and Citizenship

Introduction

Following the announcement in March 2024 from the UK’s Treasury Department, that the current UK non-domiciliation rules will cease to exist from 6 April 2025, many UK non-domiciled residents may start the decision process to relocate to tax efficient jurisdictions

The Benefits of Cyprus

• attractive tax incentives for individuals wishing to become Cyprus residents.
• excellent education infrastructure
• reasonable cost of living
• high quality public and private health care services
• advanced infrastructure of services
• a warm and friendly community in which to live.
• simple tax regime that is fully EU and OECD compliant
• well drafted laws on Corporate and Commercial matters
• easy access to international litigation and arbitration

And last but not least, the excellent weather with beautiful surroundings and culture.

Moving to Cyprus

There are various options in terms of moving to Cyprus, as outlined below:

EU non-domiciled UK residents moving to Cyprus.

All nationals of the Member States of the European Union have the right to move freely within the European Union and to enter and reside in any EU Member State. This right to freedom of movement is guaranteed by article 21 of the treaty on the functioning of the EU (TFEU).

EU and EEA Citizens entering Cyprus to work, stay or remain as visitors for more than 3 months on the island need to register for a residence permit for EU citizens. The registration certificate they get is commonly known as Yellow Slip.

Third country non-domiciled UK residents moving to Cyprus.

A. Moving to Cyprus, from the UK, as an Investor

The recently revised Residency by Investment programme allows foreign nationals to obtain permanent residency by investing in a Cypriot property worth at least €300,000, plus VAT. Applicants must also have an annual income of at least €50,000 plus €15,000 for a spouse and €10,000 for each dependent child or family member included in the application.

The applicant and his spouse/husband must certify that they do not intend to be employed in the Republic of Cyprus except for their employment as Directors in a Company in which they have chosen to invest within the framework of the policy, as detailed below.

B. Living in Cyprus with a Temporary Residence Permit

1. Establishment of a Foreign Interest Company.

A Foreign Interest Company is an international company, which, subject to meeting specific criteria, can employ non-EU national employees in Cyprus. This programme enables employees and their families to gain residence and work permits under favourable terms.

The Main Requirements Enabling an International Company to Qualify as Foreign Interest Company

• The third country shareholder(s) must own more than 50% of the total share capital of the company.
• There must be a minimum investment of €200,000 or €260,000 (depending on the circumstances) into Cyprus by the third country shareholder(s). This investment can be used later to fund future expenses incurred by the company when it is established in Cyprus.

2. Acquiring a temporary residence permit as an employee at a Foreign Interest Company.

Employees at Foreign Interest Companies and their family members can acquire temporary residence and work permits which are renewable.

3. Temporary / Retirement / Self-Sufficiency Residence Permit

The Cyprus Temporary Residence Permit is an annually renewable self-sufficiency visa that allows an individual and their qualifying dependants, to live in Cyprus as a visitor, without employment rights.

The main qualification requirements are as follows:

• Annual income, that is sourced from outside Cyprus, of a minimum of €24,000, which increases by 20% for a spouse and by 15% for each dependent child.
• A title deed or rental agreement for a residential property in Cyprus that is for the sole use of the applicant and his/her family.
• A certificate of ‘no criminal record’ and of not being under investigation for criminal offences, that is certified, by the relevant authorities of the applicant’s country of current residence.
• Private medical insurance.
• An original medical examination certificate to confirm that the applicant does not have certain medical conditions.

It is essential that the holder of a Cyprus temporary residence permit should not stay outside of Cyprus for more than three months at a time, because this could result in the permit being cancelled.

Additional Information

For further information about the attractive tax regime for individuals in Cyprus please contact the Dixcart office in Cyprus: advice.cyprus@dixcart.com.

Understanding the Portuguese Golden Visa Fund

The Portuguese Golden Visa Fund is an investment option that allows non-EU citizens, including Indians, to obtain a Portuguese residence permit. This residence permit provides visa-free travel within the Schengen Area, the right to live, work, and study in Portugal, and a path to Portuguese citizenship after five years.

I thought that the Portuguese Golden Visa had Ended?

Following a recent restructure of the programme, certain routes are no longer available, as finally voted on the 21 of September 2023. The new programme changes what types

of investment qualify for the scheme; real estate and capital transfer investments are no longer eligible.

What is a Collective Investment Entity (CIS)?

A Collective Investment Entity (CIS) is a type of investment fund that pools money from multiple investors, to invest in a diversified portfolio of assets.

To qualify for the golden visa, the CIS must be established under Portuguese legislation, with a length of maturity of at least five years, and with at least 60% of the value of the investments being made in commercial companies headquartered in the national territory of Portugal. A CIS is regulated by an independent body, which overseas such funds, and is known as the Portuguese Securities Market Commission (CMVM – Comissão do Mercado de Valores Mobiliários).

Evaluating a Good Investment Entity

When evaluating a CIS for the Portuguese Golden Visa, consider the following factors:

• Track record: Choose a CIS with a proven track record of generating returns
• Investment strategy: Understand the CIS’s investment strategy and ensure it aligns with your risk tolerance.
• Fees: Compare the fees charged by different CIS’s.
• Regulatory compliance: Verify that the CIS is fully compliant with Portuguese
• regulations.
• Management team and expertise: definitely consider experience to date.

Examples of Investments Made by CISs

CISs invest in a variety of asset classes, including private equity, where companies, with a mature profile or promising growth, are invested in. Specific examples include; operating hotels and resorts, solar project developments, annual crop yield improvement projects, farm development, amongst many examples. There is an investment for almost every interest!

Tangibility and Risks of a CIS

CISs are intangible assets, meaning they do not have a physical form. However, they represent ownership in a portfolio of tangible assets. Investing in a CIS involves risks, including:

• Market risk: The value of a CIS investment can fluctuate with market conditions.
• Credit risk: There is a risk that the companies or securities invested in, by the CIS, may default on their obligations.
• Liquidity risk: There may be a delay in selling your investment in a CIS.

Comparability to other EU Residency Programmes

The Portuguese Golden Visa Fund offers several advantages when compared to  other EU residency programmes, including:

• Lower investment requirement: The minimum investment for the Portuguese Golden Visa Fund is €500,000, which is lower than the investment requirements for many other EU passport programmes.
• Flexibility of stay: You are only required to spend seven days per year in Portugal to maintain your residence permit.
• At the end of five years of legal residency, you can apply for a Portuguese passport, which is not permitted in all of the other residency programmes available in the EU.

Navigating Indian Exchange Control Issues

Indian residents are subject to exchange control regulations that restrict the amount of foreign exchange they can transfer out of the country. Dixcart Portugal Lda has assisted many Indian clients with their investments in Portugal, and you are welcome to discuss such matters with us.

Portugal – A preferred Route for Indian Nationals?

According to the Portuguese Immigration Authorities, as of October 2023, a total of 1,234 Indian nationals have applied for the Portuguese Golden Visa. This represents almost 5% of all Golden Visa applications received to date!

It is therefore not surprising that, there is a large and growing Indian community in Portugal.

How to choose the right partner for your Portuguese Golden Visa?

When selecting a partner to assist with your Portuguese Golden Visa, consider their; experience, reputation, communication, fees, location, and expertise in your investment type. Additionally, try to ensure that they are responsive, keep you updated, and can explain complex concepts clearly.

Dixcart Portugal Lda: Your Experienced Partner for the Portuguese Golden Visa

Dixcart Group has over 50 years of experience, with 35 years of experience in Portugal, working with private clients and advising corporates. We are headquartered in the UK and have a proven track record. We have clientele based all over the world – including a substantial client book of business from India.

We have also been able to refer specific cases to the right legal team in instances  where biometrics have been lost, or other challenges have arisen, such as missed biometric appointments. These are special cases which require expertise and experience to manage successfully – which we have been able to achieve to date.

Dixcart Portugal Lda were one of the first companies to coordinate and help manage golden visa applications, through introductions to Portuguese legal advisers, who have assisted many individuals and families to complete the programme and obtain a Portuguese passport. In addition, Dixcart Portugal Lda already have experience of the many changes that have been made to the programme over time, and have helped clients deal with these revisions.

Contact Dixcart Portugal Lda Today to Learn More

If you are an Indian individual interested in a Portuguese Golden Visa Fund, please contact Dixcart Portugal Lda today, to learn more about your options and how we can help you achieve your immigration goals and connect you with the right legal advisers: advice.portugal@dixcart.com

Why Cyprus?

Cyprus is an appealing European jurisdiction, located in the eastern Mediterranean Sea offering a warm climate, attractive beaches and the perfect balance of cosmopolitan living and rural villages. Strategically located at the crossroads of three continents, Cyprus is accessible from Europe, Asia and Africa. Nicosia is the centrally located capital of the Republic of Cyprus however, the growing financial hub is Limassol on the southern coast. The official language is Greek, with English also being widely spoken. Cyprus offers a palette of both corporate and personal tax incentives for expatriates and high net worth individuals relocating to Cyprus. Cyprus has a favourable business environment and, as a result, has become an attractive an international business hub.

Are you looking to relocate your business and/ or start a new business in Cyprus? Maybe you’re considering setting up a holding company or restructuring the fiscal position of a family office structure? If you are, please consider the below information and become convinced of a great way to optimize your business structure We will start by looking at the tax benefits available to individuals and to corporates.

Tax Benefits Available to Individuals

What are the Advantages of Becoming Cyprus Tax Resident?

Cyprus non-domicile status can be an effective means to optimise personal wealth planning. The advantages of becoming Cyprus tax resident, an option for individuals not previously tax resident in Cyprus, include the following:

1. Non-Domicile Status

The non-domicile tax regime is particularly interesting for individuals whose main source of income is either dividend or interest income, as these sources of income are not taxed in Cyprus.

Individuals can also take advantage of the exemption from taxation of capital gains, other than on the sale of immoveable property in Cyprus.

In addition, there is an exemption from taxation on capital sums received from pensions, provident and insurance funds as well as several other tax advantages, including; a low rate of tax on foreign pension income, and no wealth or inheritance taxes in Cyprus.

The zero tax benefits, mentioned above, are enjoyed even if the income has a Cyprus source and/or is remitted to Cyprus.

2. Employment Income Tax Exemption

New incentives for first employment in Cyprus

The 50% exemption:

As from 1 January 2022, 50% of the remuneration of employees whose first employment in Cyprus began on, or after, 1 January 2022 is exempt from income tax for a period of 17 years, provided that their annual remuneration exceeds €55,000 (previous threshold €100,000), and the employees were not residents of Cyprus for a period of, at least, 15 consecutive years before the commencement of their employment in Cyprus.

In cases where in a tax year the relevant conditions are not satisfied (e.g., annual remuneration is less than €55,000) the above-stated exemption will not be granted for that specific tax year. This exemption is available for a period of up to 17 years.

The 20% exemption:

Individuals whose first employment in Cyprus began after 26 July 2022 and earn less than €55,000 are eligible for a 20%, or €8,550 exemption (whichever is lower) from their employment income, for a maximum period of 7 years provided that the employees were not residents of Cyprus for a period of, at least, 3 consecutive years before the commencement of their employment in Cyprus.

This exemption can be claimed from the year following the year of commencement of employment in Cyprus.

3. Tax Exemption on Income from Employment Outside Cyprus

Individuals who are employed outside of Cyprus, for more than 90 days in aggregate in a tax year, by a non-Cyprus tax resident employer or foreign permanent establishment of a Cyprus tax resident employer, are exempt from income tax on this income.

Tax Benefits Available to Companies

1. Corporate Tax Rate

Cypriot companies enjoy a 12.5% rate of tax on trading, and a zero rate of capital gains tax.

2. NID

NID is deducted from taxable income. It cannot exceed 80% of the taxable income, as calculated prior to the NID, arising from the new equity.

A company could achieve an effective tax rate as low as 2.50% (corporate tax rate 12.50% x 20%). Please contact the Dixcart office in Cyprus for further information: advice.cyprus@dixcart.com

3. Increased Tax Deduction for Research and Development Expenses

 Eligible research and development expenses can be deducted from taxable income equivalent to 120% of the actual spend.

Additional Information

For further information about the attractive tax regimes available to individuals and companies in Cyprus, please contact the Dixcart office in Cyprus: advice.cyprus@dixcart.com.

Switzerland, with its snow-capped peaks, pristine lakes, and efficient infrastructure, has long been a dream destination for many individuals seeking a balance between a high-quality lifestyle and professional opportunities. As one of the most prosperous and picturesque countries in Europe, it also attracts individuals due to its strong economy, political stability, and exceptional living standards. If you are considering making Switzerland your new home, here’s the ultimate guide to navigating the logistics of working and living in this alpine haven.

You may find also find this Dixcart Swiss Article of interest to read: Switzerland – Could this be your Next Move? – Dixcart

Relocating Logistics

Visa and Residency

Before planning your move, it is essential to understand Switzerland’s visa and residency requirements. Depending on your nationality and purpose of stay, you might need to obtain a visa or a residence permit. Ensuring you have the necessary paperwork in order, will smooth the transition process.

Accommodation

Switzerland boasts a diverse housing market, from urban apartments to picturesque countryside chalets. Local real estate agents and online platforms can help you find the perfect place to call home.

Healthcare System

Switzerland is renowned for its excellent healthcare system, which is often ranked among the best in the world. Familiarise yourself with the country’s health insurance requirements and the different insurance providers available, to ensure that you and your family have comprehensive coverage.

Working in Switzerland

Job Market

Switzerland is home to a thriving economy, particularly in sectors such as finance, pharmaceuticals, and technology. Understanding the job market, networking with professionals in your field, and researching employment opportunities will increase your chances of finding a fulfilling career.

This Dixcart Article includes a useful section regarding working in Switzerland: How Can I Relocate to Switzerland and What Help is Available? – Dixcart

Work Culture

Swiss work culture is known for its punctuality, precision, and strong work ethic. It’s crucial to familiarise yourself with the local customs and etiquette, including the importance of maintaining professionalism and respecting hierarchical structures within the workplace.

Taxes and Finance

Switzerland has a well-established tax system, but it can be complex for newcomers. Educate yourself on the tax regulations and financial planning to ensure compliance and make the most of the various benefits offered to residents.

It is worth seeking professional advice and the Dixcart office in Switzerland can help guide you regarding the various taxes: advice.switzerland@dixcart.com

Living in Switzerland

Cultural Immersion

Embrace the Swiss way of life by participating in local cultural activities, festivals, and events. Learning one of the country’s official languages—German, French, Italian, or Romansh can also help you integrate more seamlessly into the community.

Outdoor Lifestyle

Switzerland’s breathtaking natural landscapes offer an abundance of outdoor activities, from skiing and snowboarding in the winter to hiking and swimming in the summer. Embrace the Swiss passion for nature and adventure by exploring the country’s extensive network of hiking trails and ski resorts.

Community Engagement

Swiss communities value active participation and engagement. Get involved in local community initiatives, clubs, or volunteer organisations to build meaningful connections and foster a sense of belonging in your new surroundings.

For Expert Assistance, Reach Out to advice.switzerland@dixcart.com

Relocating to Switzerland can be a rewarding and enriching experience, but it requires thorough preparation and a comprehensive understanding of the country’s customs, laws, and lifestyle.

For personalised guidance and professional support in navigating the intricacies of the relocation process, reach out to our expert advisers at advice.switzerland@dixcart.com. Our team at Dixcart Switzerland is dedicated to ensuring a seamless transition and helping you make the most of your Swiss adventure.

Malta, a charming Mediterranean island nation, has become increasingly popular among expatriates and professionals seeking to relocate to a vibrant, culturally rich, and economically stable country.

One of the key factors driving this interest is the Highly Qualified Persons Programme (HQP), introduced by the Maltese government to attract talented individuals and strengthen its economy. This programme offers a range of benefits to eligible applicants, making it an attractive option for highly qualified individuals from around the world.

What is the Criteria?

In order to be eligible for the HQP programme, you would need comply with the following rules below:

1. Eligible Employment:  An individual must be employed in an eligible office with a company that is licensed, and/or recognised by the Competent Authority regulating the specific sector.  Qualifying roles typically include positions in fields such as; finance, gaming, aviation, and other sectors that are in high demand in Malta.
2. Minimum Qualifications and Salary: You should possess specific qualifications and skills that are relevant to your profession. Additionally, your annual gross salary should meet a minimum threshold, which may vary depending on the specific eligibility criteria at the time of your application. As of October 2023, the minimum salary requirement is €93,669 for the basis year 2023.
3. Health Insurance: You are required to have valid health insurance that covers you and any accompanying dependents.
4. Residential Property: HQP applicants are usually required to either purchase (only available for EU Nationals), or rent a qualifying property in Malta, which serves as their primary residence.
5. Clean Criminal Record: Applicants and their dependents should not have any criminal convictions.
6. Genuine Link to Malta: You should establish a genuine link to Malta, which may include having a physical presence in Malta and being an active part of the community.
7. Application Fees: Applicants need to be prepared to pay the necessary application and processing fees when applying for the programme.

What are the Benefits?

Tax Incentives

The HQP program is well-known for its attractive tax incentives, which are among the most compelling benefits for applicants. Successful candidates can enjoy a flat tax rate of 15% on their Malta-source income, provided it meets the eligibility criteria. Income exceeding €5,000,000 is exempt from income tax in Malta.

The Malta tax benefits under this scheme apply to EEA and Swiss nationals for a maximum consecutive period of 5 years, preceding the first year of assessment and to third country nationals for a maximum consecutive period of 4 years.

EEA/Swiss nationals who take advantage of this tax benefit shall be eligible, upon application, for a two-time extension of 5 years, making the qualifying period a maximum of 15 years of assessment and offering significant savings compared to other countries, with higher income tax rates.

Third country nationals may extend their programme twice by another 4 years, bringing their maximum time in Malta to 12 years.

The tax benefits make Malta particularly appealing for high-earning professionals and entrepreneurs who want to optimise their financial planning.

Diverse Business Opportunities

The HQP programme is limited to specific industries, including; Financial Services , Research & Development, Gaming, and Aviation and Oil and Gas. Malta has established itself as a hub for various industries, offering ample opportunities for entrepreneurs and skilled professionals. The Government is keen to attract foreign investment, leading to a business-friendly environment that promotes innovation and growth.

Education Opportunities

The HQP programme offers access to Malta’s high-quality education system. International schools in Malta provide an excellent education for expatriate children, often following international curricula. In addition, Malta’s two universities, the University of Malta and the Malta College of Arts, Science and Technology, offer a wide range of programmes and research opportunities, making it an excellent destination for those seeking advanced academic degrees.

Quality of Life in Malta

Malta offers an exceptional quality of life. Its pleasant Mediterranean climate, picturesque landscapes, and a rich cultural heritage, make it an ideal place to live and work. The country boasts a strong sense of community, a safe environment, and a high standard of healthcare and education. Furthermore, Malta’s strategic location makes it an excellent hub for travel and exploration of the broader European region.

Malta’s historical and cultural heritage is one of its most distinctive features. The island is home to numerous UNESCO World Heritage Sites, including the ancient city of Valletta. Its vibrant arts scene, diverse festivals, and cuisine, attracts individuals looking for a rich cultural experience. Malta’s multicultural society also welcomes people from various backgrounds, creating a dynamic and inclusive environment.

Conclusion

The Highly Qualified Persons Programme in Malta is a remarkable opportunity for highly skilled professionals and their families to move to a Mediterranean island.

With its enticing tax incentives, EU membership, diverse business opportunities, and an exceptional quality of life, Malta has become a top destination for those looking to enhance their personal and professional lives.

The programme’s inclusivity, and the rich sunny weather on offer, also make Malta an appealing choice for those seeking a new place to call home while advancing their careers and quality of life.

How Dixcart can help?

As a Licensed Residency Agent, Dixcart can assist in the submission and management of the HQP application, and ensure a smooth and steam lined process, making it as straight forward as possible.

For further information about the benefits of the HQP, please contact Jonathan Vassallo, at the Dixcart office in Malta: advice.malta@dixcart.com.

Alternatively, please speak to your usual Dixcart contact.

Dixcart Management Malta Limited Licence Number: AKM-DIXC.

Background

Numerous tax advantages exist in Cyprus, for companies and previously non-Cypriot resident individuals. Please see Article:  Tax Efficiencies Available in Cyprus: Individuals and Corporates.

Individuals

Individuals can move to Cyprus, to take advantage of the tax efficiencies available, by spending at least 183 days in Cyprus without additional conditions.

For individuals with closer ties to Cyprus such as running/operating a business in Cyprus and/or being a director of a company which is tax resident in Cyprus, the ‘60 Day Tax Residency Rule’ might be of interest

1. The “60 Day” Tax Residency Rule 

Since the implementation of the 60-day tax residency rule, a number of individuals have relocated to Cyprus to take advantage of the various tax benefits that are available.

Criteria to Meet the “60 Day” Tax Residency Rule

The “60 day” tax residency rule applies to individuals who in the relevant tax year:

• reside in Cyprus for at least 60 days.
• operate/run a business in Cyprus and/or are employed in Cyprus and/or are a director of a company which is tax resident in Cyprus. Individuals must also have a residential property in Cyprus which they own or rent.
• are not tax resident in any other country.
• do not reside in any other single country for a period exceeding 183 days in aggregate.

Days Spent In and Out of Cyprus

For the purpose of the rule, days “in” and “out” of Cyprus are defined as:

• the day of departure from Cyprus counts as a day out of Cyprus.
• the day of arrival in Cyprus counts as a day in Cyprus.
• arrival in Cyprus and departure on the same day counts as a day in Cyprus.
• departure from Cyprus followed by a return on the same day counts as a day out of Cyprus.

Please note that for the majority of jurisdictions you do not become tax resident if you reside there for less than 183 days a year. In certain jurisdictions, however, the number of days to be considered tax resident, is fewer than this. Professional advice should be taken.

2.  Starting a Business in Cyprus as a Means of Relocation for Non-EU Nationals

Cyprus is an attractive jurisdiction for trading and holding companies, with access to all EU directives and an extensive network of double tax treaties.

To encourage new business to the island, Cyprus offers two temporary visa routes as a means for individuals to live and work in Cyprus:

• Establishing a Cyprus Foreign Investment Company (FIC)

Individuals can establish an international company which can employ non-EU nationals in Cyprus. Such a company can obtain work permits for relevant employees, and residence permits for them and their family members. A key advantage is that after seven years, non-EU nationals can apply for Cyprus Citizenship.

• Establishment of a Small/Medium Size Innovative Enterprise (Start-up Visa) 

This scheme allows entrepreneurs, individuals and/or teams of people, from countries outside the EU and outside the EEA, to enter, reside and work in Cyprus. They must establish, operate, and develop a start-up business, in Cyprus. This visa is available for one year, with the option to renew for another year.

3. The Permanent Residence Permit

Individuals wishing to move to Cyprus can apply for a Permanent Residence Permit which is useful as a means to ease travel to EU countries and organise business activities in Europe.

Applicants must make an investment of at least €300,000 in one of the investment categories required under the programme, and prove they have an annual income of at least 50,000 (which can be from pensions, overseas employment, interest on fixed deposits, or rental income from abroad). If the holder of a Permanent Residence Permit resides in Cyprus, this may make them eligible for Cyprus citizenship by naturalisation.

4. Digital Nomad visa: non-EU nationals who are self-employed, salaried, or working on a freelance basis can apply for the right to live and work from Cyprus remotely.

Applicants must work remotely using information technology and communicate remotely with clients and employers outside Cyprus.

A Digital Nomad has the right to stay in Cyprus for a period of up to one year, with the right to renew for another two years. During the stay in Cyprus the spouse or partner and any minor family members, cannot provide independent work or engage in any kind of employment activity in the country. If they reside in Cyprus for over 183 days in the same tax year, then they are considered to be tax residents of Cyprus.

Each digital nomad must have; a salary of at least €3,500 per month, medical cover and a clean criminal record from their country of residence.

Currently the cap of the total amount of allowed applications has been reached and therefore this programme is currently unavailable.

1. Application for Cypriot Citizenship

The option is available to apply for Cypriot citizenship after a period of five years of residence and work within the Republic of Cyprus.

Additional Information

For further information about the attractive tax regime for individuals in Cyprus, and the visa options available, please contact Katrien de Poorter at the Dixcart office in Cyprus: advice.cyprus@dixcart.com.

Background

Cyprus has uniquely positioned itself as a tax jurisdiction of choice for individuals. Various positive aspects of Cyprus Income tax legislation are available to individuals seeking a flexible and attractive tax regime.

What makes Cyprus a jurisdiction of choice for individuals is the non-domicile tax Regime which allows qualifying individuals to receive dividend and interest income exempt of income tax.  In addition, individuals relocating to the island for the first time can benefit from reduced taxation on their employment income.

Day traders or individuals holding and managing their own investment portfolio can benefit extensively from the exemption of capital gains on the sale of equities.

The 60-day tax rule lends itself well for highly mobile individuals who travel extensively for work purposes and are not tied to one particular place of residence.

The tax benefits are further extended to individuals looking for a place to retire to.

Income Tax Reduction on Employment Income

On the 26^th July 2022 the long-anticipated tax incentives for individuals were implemented. As per the new provisions of the income tax legislation, a 50% exemption for income in relation to first employment in Cyprus is now available for individuals with annual remuneration in excess of €55,000 (previous threshold EUR 100.000). This exemption will be available for a period of 17 years.

Cyprus Tax Residency in 60 Days

An individual can become Cyprus tax resident in 60 days. This rule is applicable to individuals who do not spend more than 183 days in Cyprus or in any other jurisdiction.

The “60 day rule” applies to individuals who in the relevant tax year reside in Cyprus for at least 60 days, operate/run a business in Cyprus and/or are employed in Cyprus and/or are a director of a company which is tax resident in Cyprus.

Individuals must also have a residential property in Cyprus which they own or rent and not be tax resident in any other country. The individual must not reside in any other single country for a period exceeding 183 days in aggregate.

Non-domicile Status

Individuals can acquire Cyprus tax residency after having complied with spending either 183 days or 60 days in Cyprus. Please contact the Dixcart office in Cyprus for further details about these two alternatives: advice.cyprus@dixcart.com

The Non-domicile tax regime is particularly interesting for individuals whose main source of income is either dividend income or Interest Income. In addition individuals can take advantage of the exemption of taxation on capital gains.

UK nationals and Other Non-EU Resident Applicants

Due to Brexit, UK nationals are now considered as non-EU nationals and therefore need to follow the same application procedure as other non-EU nationals:

Non-EU nationals and the Permanent Residence through Investment Programme

In order to acquire a Permanent Residence Permit the non-EU national needs to make an investment of at least €300,000, (excluding VAT) in one of the following investment categories: residential real estate, other types of real estate such as offices, shops, hotels or investment in the share capital of a Cyprus company, or in units of a Cyprus Investment Organization of Collective Investments (type AIF, AIFLNP, RAIF). In addition, evidence of a secure annual income of at least €50,000 must be provided. This required annual income, increases by €15,000 for the spouse and €10,000 for every minor child.

• Non-EU Nationals and Temporary Residence through a Foreign Interest Company

A Foreign Interest Company is an international company, which, subject to meeting specific criteria, can employ non-EU national employees in Cyprus.

This programme enables employees and their families to gain residence and work permits under favourable terms. The main requirements enabling an international company to qualify as a Foreign Interest Company are all third country shareholder(s) must own more than 50% of the total share capital of the company, and there must be a minimum investment of €200.000 into Cyprus by these third country shareholder(s). This investment can be used at a later date, to fund future expenses incurred by the company when it is established in Cyprus.

• Temporary residence on a visitor basis without the right to undertake any form of employment.

Non-EU nationals can acquire a temporary residence permit based on a visitor visa, which can be renewed for a period of up to 10 years.

This type of residence does not allow the undertaking of any form of employment.

This basis of residence is most suitable for pensioners wishing to establish themselves in Cyprus and enjoy the advantageous tax regime applicable to foreign pensions. Please contact the Dixcart office in Cyprus for more details: advice.cyprus@dixcart.com.

Additional Information

For additional information about the attractive tax regime for individuals in Cyprus, please contact: Katrien De Poorter at the Dixcart office in Cyprus: advice.cyprus@dixcart.com.

Background

Cyprus is a hidden European gem in terms of the opportunities and benefits available to individuals and corporates, moving there on a permanent basis and/or establishing residency through the ’60 Day Tax Residency Rules’.

EU and Non-EU Individuals

For non-EU nationals there are various programmes for individuals to enable them to move to Cyprus, with one option being to establish a company in Cyprus. EU nationals are free to move to Cyprus, as Cyprus is in the EU.

The ‘60 Day Tax Residency Rule’ is  a route for EU and non-EU nationals, to optimise the tax efficiencies available from Cyprus, without needing to reside there more than 60 days a year.

We will start by looking at the tax benefits available to individuals and to corporates.

Tax Benefits Available to Individuals

What are the Advantages of Becoming Cyprus Tax Resident?

Cyprus non-domicile status can be an effective means to optimise personal wealth planning. The advantages of becoming Cyprus tax resident, an option for individuals not previously tax resident in Cyprus, include the following:

1. Non-Domicile Status

The non-domicile tax regime is particularly interesting for individuals whose main source of income is either dividend or interest income, as these sources of income are not taxed in Cyprus.

Individuals can also take advantage of the exemption from taxation of capital gains, other than on the sale of immoveable property in Cyprus.

In addition, there is an exemption from taxation on capital sums received from pensions, provident and insurance funds as well as several other tax advantages, including; a low rate of tax on foreign pension income, and no wealth or inheritance taxes in Cyprus.

The zero tax benefits, mentioned above, are enjoyed even if the income has a Cyprus source and/or is remitted to Cyprus.

2. Employment Income Tax Exemption

There is a 50% exemption from taxation, for income for ‘first time’ employment in Cyprus, for individuals with an annual remuneration income of over €55,000.

This exemption is available for a period of  up to 17 years.

3. Tax Exemption on Income from Employment Outside Cyprus

Individuals who are employed outside of Cyprus, for more than 90 days in aggregate in a tax year, by a non-Cyprus tax resident employer or foreign permanent establishment of a Cyprus tax resident employer, are exempt from income tax on this income.

Tax Benefits Available to Companies

1. Corporate Tax Rate

Cypriot companies enjoy a 12.5% rate of tax on trading, and a zero rate of capital gains tax. In addition, Cyprus tax resident companies and Cyprus permanent establishments (PEs) of non-Cyprus tax resident companies, are entitled to a Notional Interest Deduction (NID), on the injection of new equity used to generate taxable income.

2. NID

NID is deducted from taxable income. It cannot exceed 80% of the taxable income, as calculated prior to the NID, arising from the new equity. A company could achieve an effective tax rate as low as 2.50% (corporate tax rate 12.50% x 20%). Please contact the Dixcart office in Cyprus for further information: advice.cyprus@dixcart.com

3. Increased Tax Deduction for Research and Development Expenses

Eligible research and development expenses can be deducted from taxable income equivalent to 120% of the actual spend.

Starting a Business in Cyprus as a Means of Relocation for Non-EU Nationals

Cyprus is an attractive jurisdiction for trading and holding companies and offers a number of tax incentives, as detailed above.

To encourage new business to the island, Cyprus offers two temporary visa routes as a means for individuals to live and work in Cyprus:

1. Establishing a Cyprus Foreign Investment Company (FIC)

Individuals can establish an international company which can employ non-EU nationals in Cyprus. Such a company can obtain work permits for relevant employees, and residence permits for them and their family members. A key advantage is that after seven years, third country nationals can apply for Cyprus Citizenship.

2. Establishment of a Small/Medium Size Innovative Enterprise (Start-up Visa) 

This scheme allows entrepreneurs, individuals and/or teams of people, from countries outside the EU and outside the EEA, to enter, reside and work in Cyprus. They must

establish, operate, and develop a start-up business, in Cyprus. This visa is available for one year, with the option to renew for another year.

Please see the Dixcart Article: Programmes to Move to or Become Tax Resident in Cyprus.

Additional Information

For further information about the attractive tax regimes available to individuals and companies in Cyprus, please contact Robert Homem or Katrien de Poorter at the Dixcart office in Cyprus: advice.cyprus@dixcart.com