If you’ve been exploring ways to optimise your taxes while living or working internationally, you’ve likely come across the term “non-domiciled.” It’s a concept that has gained attention for its potential to lower tax burdens legally. But what does it really mean, and how does it work? Understanding the meaning of non-domiciled status is essential for anyone looking to make the most of global tax opportunities.
In this guide, we’ll break down the meaning of non-domiciled status, explore which countries offer these tax programs, and show why Cyprus is emerging as one of the top destinations for non-doms in 2025. By the end, you’ll also know how to become a non-domiciled resident in Cyprus and unlock its generous tax benefits .
What Does Non-Domiciled Mean? At its core, being non-domiciled (or “non-dom”) refers to your tax residency status in a country where you do not have a permanent home or “domicile.” In simple terms, it means you’re living in one country while maintaining a stronger connection to another, whether cultural, familial, or financial.
From a tax perspective, this status allows individuals to be taxed only on the income they earn within the country or bring into it, rather than on their global earnings. In some countries, like Cyprus, it also provides significant tax advantages on local income, such as exemptions from special taxes like the Special Defence Contribution Tax (SDC). For high-net-worth individuals, digital nomads, and entrepreneurs, this can be a game-changer, reducing their tax liability significantly while maintaining compliance with local regulations.
Key Points About Non-Domiciled Status Global vs. Local Income: Non-domiciled residents typically pay taxes only on income generated locally or “remitted” into the country. Income earned abroad often remains untaxed.Domicile vs. Residence: Domicile is your permanent home, often determined by your family ties or origin. Residence is where you currently live and work. You can be a resident in one country but domiciled in another.Flexibility: Non-dom programs are especially appealing for people with international lifestyles, such as expats, remote workers, or global entrepreneurs.Understanding this concept is essential because the benefits and rules vary from country to country, and the specifics can significantly impact your tax obligations.
Countries That Offer Non-Dom Programs Several countries worldwide offer non-domiciled tax regimes to attract foreign investment and talent. These programs are tailored to provide tax advantages for those who choose to reside there temporarily or permanently. Here’s a look at some of the most notable ones:
United Kingdom (Until 2025) The UK’s non-dom program has long been a popular choice, offering exemptions on foreign income and gains. However, this program is being phased out, with changes set to take effect from April 2025. New residents will only benefit from the regime for four years, and existing non-doms will face a two-year transition period.
Ireland Ireland’s non-dom program allows foreign income to remain untaxed if it is not brought into the country. It’s especially attractive for business owners who can structure their operations to minimize tax liabilities.
Malta Malta offers a straightforward non-dom regime, where only income earned in or remitted to Malta is taxed. The country’s double taxation treaties also enhance its appeal.
Cyprus Cyprus stands out for its simplicity and benefits. Non-dom residents are exempt from taxes on dividends, interest, and rental income from abroad. Additionally, they are not subject to SDC Tax on dividend and rental income earned locally. We’ll explore more on this shortly.
Other Countries Portugal: Offers the Non-Habitual Residency program, exempting certain foreign income from tax for up to 10 years.Greece: Provides a tax cap for non-domiciled residents, particularly retirees and investors. Italy: Has a flat-tax program for high-net-worth individuals.
Why Cyprus Is the Best Non-Dom Destination in 2025 As other countries tighten their non-dom regimes, Cyprus has positioned itself as a premier destination for individuals and businesses seeking tax efficiency. Here’s why:
Generous Tax Benefits 0% Tax on Dividends: Non-doms in Cyprus pay no tax on dividends, regardless of whether they are earned locally or abroad.0% Tax on Global Income: Income earned outside Cyprus remains untaxed.0% Tax on Interest: No tax on interest from savings or investments.0% SDC Tax on Rental Income: Pay income tax only, and after a 20% deduction.0% Tax on Securities Trading: Revenue from the sale of shares, bonds, or similar instruments is tax-free.Minimal Healthcare Contribution: A flat 2.65% contribution on dividends applies, capped annually at €4,770.Business-Friendly Environment Cyprus offers one of Europe’s lowest corporate tax rates at 12.5%, and setting up a company here takes as little as 7–10 days. Its stable economy and EU membership make it an ideal base for global entrepreneurs. Learn more about our Cyprus Company Formation services .
Lifestyle and Cost of Living With its Mediterranean climate, affordable living costs, and high safety rankings, Cyprus is perfect for families, retirees, and digital nomads.
Simplicity and Accessibility Unlike many countries, Cyprus’s non-dom program is straightforward. However, Cyprus requires you to earn a minimum of €27,000 in annual gross income to gain permanent residency status, which is a requirement for applying for non-domicile tax residency. The application process remains quick and efficient.
How to Become a Non-Domiciled Resident in Cyprus Securing non-domiciled status in Cyprus is easier than you might think. Follow these steps:
1. Establish Permanent Residency You can qualify as a Cyprus tax resident by:
Spending at least 183 days in the country each year, or Meeting the “60-day rule” criteria: residing in Cyprus for 60 days, having no other tax residency, and maintaining strong ties to the country (e.g., carrying out business activities, working, or being a director in a Cyprus tax-resident company). 2. Register with Tax Authorities File for tax residency by registering with the Cyprus Tax Department. This includes obtaining a Tax Identification Number (TIN).
3. Apply for Non-Domicile Status Provide proof of your domicile status (e.g., birth certificate, citizenship documents) to confirm you’re eligible for non-dom benefits.
4. Leverage Professional Help To maximise your tax benefits and ensure compliance, consider partnering with experts familiar with Cyprus’s tax laws and non-dom requirements .
Conclusion Understanding the meaning of non-domiciled status can open doors to significant financial advantages, especially for those with an international lifestyle. While several countries offer non-dom programs, Cyprus stands out as the best destination in 2025, thanks to its unmatched tax benefits, simplicity, and quality of life.
If you’re considering relocating or optimising your tax strategy, Cyprus’s non-dom regime
