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Guide to Acquiring Tax Residency in Cyprus

Discovering the steps to become a tax resident in Cyprus and the advantages that come with it.

, and Administrator

2025 September 26 . 10:45 PM

3 min read

Guidelines for Acquiring Tax Residence Status in Cyprus

Guide to Acquiring Tax Residency in Cyprus

In the eastern Mediterranean, the island nation of Cyprus offers a unique blend of ancient history and modern appeal. But it's not just its stunning beaches and legendary myths that make Cyprus a popular destination. The country is also known for its favorable tax regime, attracting expats and businesses from around the globe.

Aphrodite's Rock, or Petra tou Romios, is a breathtaking rock formation near the coast, believed by locals to bring good luck in love. But Cyprus's luck doesn't end there. The country offers a non-domiciled tax regime, exempting expats from being taxed on certain incomes, making it an attractive destination for those seeking a tax-friendly haven.

Cyprus is not a tax-free country, with personal income tax rates ranging from 0%-35% and corporation tax charged at a rate of 12.5%. However, for non-domiciled tax residents, the tax benefits are substantial. To qualify, one must prove that either they or their father was born in another country and plan to eventually return to that country.

Under the Cyprus Income Tax Law, there are two ways to become a Cypriot tax resident: the 60-day rule or the 183-day rule. The 60-day rule requires a person to reside in Cyprus for one or more periods for an aggregate of at least 60 days, while the 183-day rule requires a person to be present in Cyprus for at least 183 days in a tax year.

To form a Cypriot company, one needs to provide the name of the company for checking its availability, the names, ID/Passport numbers, birth dates, jobs, and addresses of the directors, secretary, and shareholders, and the purpose and activities of the company. Once the documents are prepared, the steps to form a Cypriot company include hiring oneself as a director, paying a salary and making mandatory social contributions, obtaining a Social Security Number and opening a corporate bank account in Cyprus, transferring a minimum of €41,000 to the bank account, applying in person for the employment permit and temporary residence at the Civil Registry and Migration Department, and waiting for up to six months for approval.

Cyprus has agreed to treaties with more than 60 countries to avoid double taxation, ensuring a smooth tax experience for expats. It's important to note that proper business structuring is required to ensure it does not trigger unwanted Permanent Establishment or Controlled Foreign Company (CFC) tax implications.

English is widely spoken in Cyprus, making it easy for expats to settle in and navigate the country. For EU and non-EU citizens, becoming a tax resident in Cyprus follows the same process, with EU citizens not requiring special permits to live in Cyprus.

International experts advise people considering tax residency in Cyprus to carefully plan and consult specialists to optimize tax advantages such as the Non-Dom status with 0% on dividends, exploiting Cyprus’s high tax-free allowance and low tax rates, as well as structuring holdings properly to benefit from EU tax deferral rules and avoid exit taxes.

However, whether Cyprus is considered a tax haven depends on one's definition. Some view it as a tax haven due to its favorable tax regime, while others argue that it does not meet the traditional criteria of a tax haven.

Despite this, Cyprus offers a unique blend of history, culture, and tax advantages, making it an attractive destination for expats and businesses alike. Whether you're seeking good luck in love or a tax-friendly haven, Cyprus is certainly worth considering.