Non-Dom Status in Cyprus

The Non-Dom status allows newly relocated residents to exempt almost all foreign-earned income from taxation in Cyprus for a period of up to seventeen years. This regulation applies regardless of whether the income in question is transferred to a Cypriot account or not, thus presenting a clear incentive for international entrepreneurs and capital investors.

Requirements

The prerequisite for obtaining Non-Dom status is relocating one’s tax residence to Cyprus and spending at least sixty days per calendar year there. Formally, registration takes place through the Cypriot residence permit (‘Yellow Slip’) and registration with the tax authorities, whereby a utility bill in one’s own name serves as proof of residential address.

Tax Benefits

With Non-Dom status, all income from dividends, interest earnings, rental income, and profits from cryptocurrencies is tax-free. Additionally, the so-called Special Defense Contribution, which is otherwise levied on certain types of income, is eliminated. Entrepreneurs also benefit from the low corporate tax rate of 12.5% on company profits.

Controlled Foreign Company (CFC) Rules

Since 2019, regulations to prevent profit shifting abroad have been in effect in Cyprus. According to these, income from foreign subsidiaries may be subject to Cypriot taxation under certain conditions. This regulation serves to protect against abusive structures without undermining the basic concept of Non-Dom status.

Application Examples and Target Groups

Particularly entrepreneurs with cross-border business models, digital nomads, and investors in the fields of online trading, affiliate marketing, or cryptocurrency trading use the Non-Dom status to optimize their earnings globally. Through the combination of tax-free foreign income and a business-friendly environment, business activities can be conducted effectively and cost-efficiently.