THE NON-DOM REGIME FOR HIGH-NET-WORTH INDIVIDUALS IN CYPRUS HOLDS NO TAXATION ON INTEREST & DIVIDENDS

Effective as of April 2025, the recent abolishment of the non-UK domiciled tax regime, leaves UK -based High-Net-Worth Individuals on the look out for alternative tax residency options. Where does that leave us with?

Since 2015, Cyprus constitutes an ideal location for taxation of worldwide income for HNWIs who transfer their tax residence to the famous island. With the unique beneficial status of an EU member in combination with a Commonwealth state, as an ex British colony, Cyprus holds jurisdiction within the EU and is judiciary similar to the UK in terms of company legislation and assurance standards. Holding a large network of double-taxation treaties with more than 60 countries, U.K included, Cyprus boasts a sophisticated business destination. Furthermore, HNWI’s turn to Cyprus for its tax friendly incentives, available to companies and individuals for an overall lower tax burden compared to other EU jurisdictions, on top of highly competitive corporation tax rates at 15% (for MNEs and large domestic groups with annual consolidated revenues exceeding €750 million), standing as one of the lowest tax rates in Europe and certainly lower to the UK’s current corporation tax rate of 20%.

On top of being a tempting business destination for its tax – schemes, Cyprus has plenty of additional advantages to offer, such as wide availability of a highly qualified and expertly educated work force that is fluent in English, low operational costs, strategic location connecting it with three key continents, under a stable European economy. The individuals themselves can enjoy a low cost of living and doing business, combined with high quality of life, education and a national healthcare system at EU standards.


In order to benefit from the Cypriot Non-Dom regime, and to transfer one’s tax residence to the Republic of Cyprus,
individuals and companies must meet the following criteria for the same tax year (1/1-31/12): 

• Spend 60 days minimum in Cyprus (not necessarily consecutive)
• Spend no more than 183 days in any other country,
• Are not tax residents of any other country,
• Maintain a permanent home in Cyprus (owned or rented).
• Hold a business, are employed, or hold office in a company registered in Cyprus until minimum the end of that year.


Side note to the above:
• An individual can be considered as a Cyprus tax resident, after spending more than 183 days in Cyprus during a calendar year.
•  The Cyprus Tax Authorities may also issue a tax residency certificate, even during the tax year, to qualifying individuals upon request.

 

The present article is for informational purposes only and does not, under any circumstances, constitute legal advice.
For further information on the subject, please contact our law firm and one of our attorneys shall be glad to assist you.

 

Nika Kalifatidou
Advocate – Legal Consultant
Managing Partner
T.K. & Associates Law Firm