The Non-Dom Status in Cyprus: A Smart Move for EU Entrepreneurs
August 22, 2024
If you're an entrepreneur from the EU looking for a strategic location to base your business or personal tax residency, Cyprus might just be the ticket. Here's why the non-domicile (non-dom) status in Cyprus could be beneficial for you.
What's the Deal with Non-Dom Status?
Cyprus introduced the non-dom status to attract foreign investment and high-net-worth individuals by offering significant tax advantages. Here's what you need to know:
1. Tax Exemptions: As a non-dom, you're exempt from tax on dividends, interest, and rental income. This means if you're earning from investments or from your company's profits, Cyprus won't touch that income.
2. Low Presence Requirement: You only need to be in Cyprus for 60 days in a year to qualify for tax residency, which is pretty handy for those who like to keep moving or have businesses elsewhere.
3. No Tax on Securities: Cyprus doesn't impose a tax on the sale of securities, which can be a significant advantage if you're trading in stocks or other types of securities.
Why Cyprus?
1. Business-Friendly Environment: With one of the lowest corporate tax rates in the EU at 12.5%, Cyprus is attractive for setting up businesses. Plus, there's no withholding tax on dividends paid to non-resident shareholders.
2. Quality of Life: Beyond taxes, Cyprus offers a high standard of living, with great weather, English widely spoken, and a strategic location between Europe, Asia, and Africa.
3. EU Membership: Being an EU member state, Cyprus provides stability and access to the European market, which is crucial for entrepreneurs looking to expand or operate within Europe.
How to Get Non-Dom Status?
1. Residency: You need to become a tax resident. This involves spending 183 days in Cyprus. Alternatively, you can get tax residency by spending 60 days in Cyprus, if you also have permanent residency (owned or rented) and having economic activity in cyprus such as a company or a job.
2. Not a Previous Resident: You shouldn't have been a tax resident in Cyprus for 17 out of the last 20 years before applying for non-dom status.
A Point to Consider:
Cultural Shift: If you're moving from another part of the EU, be prepared for a Mediterranean pace of life which might be slower than what you're used to but comes with its own perks.
Conclusion
For EU entrepreneurs, Cyprus's non-dom status isn't just about saving on taxes; it's about strategic business positioning within the EU while enjoying personal financial benefits. It's a place where your business can thrive, and your personal wealth can grow with minimal tax interference. Just remember, while the tax benefits are appealing, the lifestyle, business environment, and strategic location add layers of attraction to this Mediterranean gem. If you're considering a move or just a new tax strategy, Cyprus deserves a serious look.
