If you’re looking to optimise your taxes and enjoy a better lifestyle, Cyprus’s non-domicile tax residency might be the perfect solution for you. Known for its generous tax benefits and EU-compliant regulations, the Cyprus non-dom regime offers incredible opportunities for digital nomads, entrepreneurs, and investors to reduce their tax liability legally while enjoying a Mediterranean lifestyle.
This guide will explain what non-domicile tax residency is, how it works, and why Cyprus is one of the best places to become a non-dom. Whether you're looking to save on taxes or simply curious about how the system works, this ultimate guide will provide all the answers you need.
What Is Non-Domicile Tax Residency in Cyprus? Non-domicile tax residency
For a more detailed understanding of non-domicile and its global implications, check out our blog post: Non-Domiciled Meaning: How It Works and Key Facts to Know .
In Cyprus, the non-dom status exempts residents from the Special Defence Contribution tax, which is levied at 17% on dividends, interest, and rental income generated in Cyprus and abroad. This program is especially attractive to expats, digital nomads, investors and business owners looking for a tax-efficient way to manage their global income.
How Does Non-Domiciled Status Work? The non-dom program in Cyprus is designed to attract foreign talent, entrepreneurs, investors and high-net-worth individuals to the country by offering tax advantages to those who qualify. Here’s how it works:
Tax Resident History: To qualify for the non-dom regime, you must not have been a Cyprus tax resident for at least 17 of the last 20 years. Once granted non-domicile status in Cyprus, you can enjoy its extensive tax benefits for up to 17 years.Tax Exemptions : Non-dom residents in Cyprus are exempt from the Special Defence Contribution (SDC) tax, which applies to dividends, interest, and rental income. This exemption, combined with no taxation on global income earned abroad, makes Cyprus a top destination for tax optimisation.Time Spent in Cyprus : You must meet either the 183-day rule or the 60-day rule to qualify as a tax resident. The 60-day rule requires you to reside in Cyprus for at least 60 days a year while maintaining strong economic or professional ties, such as owning a business or working in the country.Cyprus’s straightforward tax regime ensures you can focus on growing your wealth and enjoying your lifestyle without worrying about complex tax obligations.
Key Benefits of Cyprus Non-Domicile Tax Residency Becoming a non-domiciled resident in Cyprus offers you some of the most competitive tax advantages in Europe, including:
0% Tax on Dividends Non-dom residents pay no tax on dividends, whether earned locally or abroad. Dividends are however subject to a capped minimal 2.65% healthcare contribution on dividends up to €180,000.0% Tax on Global Income Income generated outside Cyprus is exempt from taxation as far as Cyprus is concerned, even if brought into the country.0% Tax on Interest Enjoy tax-free interest income from savings or investments.0% Capital Gains Tax on Securities Trading Revenue from the sale of shares, bonds, and similar instruments is tax-free.0% SDC Tax on Rental Income While regular residents pay the SDC on rental income, non-doms are exempt. They only pay standard income tax after a 20% deduction, which also every resident enjoys. These benefits make Cyprus one of the most attractive destinations for individuals and families seeking to optimize their taxes while enjoying a high quality of life.
General Tax Benefits of Living in Cyprus Even beyond the non-domicile program, Cyprus offers incredible tax advantages for residents, including:
0% Inheritance Tax There is no inheritance or estate tax in Cyprus, ensuring that your wealth is passed on without additional costs.Low Corporate Tax Cyprus boasts one of the lowest corporate tax rates in the EU at just 12.5%, making it a hub for businesses. Multinational companies or local companies with more than €750 million in global revenues are taxed 15% from 2025.0% Income Tax Threshold Earn up to €19,500 annually without paying income tax.50% Income Exemption Employees who relocate to Cyprus to work, and who earn over €55,000 annually enjoy a 50% income exemption for 17 years, starting for the year they first got employment.Flat 5% Pension Tax Pensioners with foreign pension income can choose to pay a flat 5% tax on their pension income exceeding €3,420 annually.Whether you’re a retiree, entrepreneur, or digital nomad, these general benefits complement the non-dom regime perfectly.
Who Qualifies for Non-Domicile Tax Residency in Cyprus? To qualify for non-domicile status, you must meet these criteria:
Residency Rules: Spend at least 183 days in Cyprus annually, or Meet the 60-day rule: spend 60 days in Cyprus, have no tax residency elsewhere, and maintain economic ties to Cyprus (e.g., work or business ownership). Permanent Residency Status You must earn a minimum gross annual income of €27,000 to qualify for permanent residency, a requirement for applying for non-domicile status.Non-Domiciled History You must not have lived (domiciled) in Cyprus for at least 17 of the last 20 years. Prove Economic Ties Run or start a business, work in Cyprus, or serve as a director of a Cyprus-based company, such as your own holding company. Learn more about setting up a company in Cyprus with our Cyprus Company Formation Service If you would like to get a more in depth understanding of the non-domicile rules, check out our blog post: Cyprus Non-Dom Regime: Rules and Requirements
How to Apply for Non-Domicile Tax Status in Cyprus The application process is straightforward:
Establish Residency Register as a Cyprus tax resident by meeting the residency rules.Set up a company Register a company in Cyprus, with you as the director.Apply for Non-Domicile Status Submit documents verifying your domicile status, your parents' domicile status, and your eligibility for non dom tax benefits.Work with Experts Partner with professionals who understand Cyprus’s tax regulations to ensure a smooth and compliant process.Is Cyprus Non-Domicile Tax Residency Right for You? Cyprus’s non-dom program
The program is particularly suited for those earning income from dividends, interest, or securities trading, as these are entirely tax-free for non-doms. With its combination of tax advantages, business-friendly environment, and high quality of life, Cyprus is a leading choice for global citizens.
