IMMIGRATION
September 22, 2025
4:30 pm

Unlock 0% Tax in Cyprus: Your Guide to Residency & Non-Dom Benefits

Why do high-net-worth individuals and global investors choose Cyprus? For many, the decision is a perfect blend of lifestyle goals and strategic financial planning. The Republic of Cyprus has become a premier European destination, offering not just a sun-drenched lifestyle but also one of the most advantageous tax systems in the world. With Cyprus’s anticipated accession to the Schengen Area by 2026, adding visa-free European travel to its already compelling tax advantages, the strategic appeal for international investors continues to grow.

To unlock these tax benefits, you must understand the island’s legal and fiscal landscape. This means grasping two critical concepts: Permanent Residency and Tax Residency. While both statuses allow you to live in Cyprus, their purposes are worlds apart, with different implications for your tax obligations. This guide explores the differences between obtaining a Cyprus Permanent Residency Permit (PRP) and becoming a tax resident in Cyprus. We will unpack the robust non-dom regime and its significant tax benefits.

Understanding the Core Concepts

To create an effective plan for your relocation to Cyprus, you must distinguish between your immigration status and your tax status. One governs your legal right to live in Cyprus, while the other determines how your income is taxed. In Cyprus, these are managed through separate frameworks.

What is a Permanent Residence Permit (PRP) in Cyprus, and why is it Essential for Investors?

Permanent Residency in Cyprus is an immigration status. It grants non-EU citizens the legal right to live in the Republic indefinitely, a crucial step for those seeking long-term stability. The most popular route is the expedited investment program, a cornerstone of the Cyprus residency framework for investors seeking a foothold in the EU.

What makes the Cyprus PRP program so appealing? The investment unlocks a secure European base with significant lifestyle advantages. The main benefits of this residency program include:

The Investment: To secure your Cyprus Permanent Residency, you must make a qualifying investment of at least €300,000 in assets like real estate or local companies.

Family Inclusion: The Permanent Residency permit is comprehensive, covering the principal applicant, their spouse, and dependent children, making it an ideal solution for families.

Enhanced European Access: With Cyprus’s Schengen Area integration planned for 2026, PRP holders will gain visa-free travel across all Schengen member states, adding significant mobility value to the residency status.

Employment Rules: It’s essential to note that a PRP holder in Cyprus typically cannot be employed locally, which affects their overall residency and financial planning.

What is Cyprus Tax Residency?

Cyprus Tax Residency is a fiscal status that determines your global tax obligations. Your status as a Cyprus tax resident is based on the number of days you spend on the island. This status means you are subject to Cyprus tax on your worldwide income, which is the key to unlocking a range of tax benefits under the non-dom regime.

How do you become a tax resident in Cyprus? There are two primary rules:

The “183-Day Rule” for Cyprus Tax Residency: Spend more than 183 days in Cyprus in a calendar year, and you are automatically considered a Cyprus tax resident.

The “60-Day Rule” for Cyprus Tax Residency: This flexible rule allows you to gain tax residency by spending just 60 days in Cyprus, provided you meet other criteria, such as maintaining a home and not being a tax resident elsewhere. This option is ideal for international entrepreneurs who need a stable tax base.

The Power of Non-Dom Status: The Ultimate Cyprus Tax Benefit

The cornerstone of Cyprus’s tax appeal for high-net-worth individuals is the non-domicile (non-dom) regime. Under Cyprus law, a Cyprus tax resident who is not originally from Cyprus can access extraordinary tax benefits. For the first 17 years of tax residency, these individuals can be classified as non-domiciled.

Why does non-dom status matter? For a non-domiciled individual who establishes tax residency in Cyprus, the financial advantages are immense. The main tax benefit is a complete exemption from the Special Defence Contribution (SDC), a tax typically charged on passive income. As an exempt non-dom, you enjoy:

0% Cyprus Tax on Worldwide Dividend Income
0% Cyprus Tax on Worldwide Interest Income
0% Cyprus Tax on Capital Gains from the sale of securities

This robust non-dom regime is a primary driver for investment and relocation to Cyprus.

Strategic Corporate Planning & Investment

Beyond personal tax benefits, Cyprus offers an efficient environment for international business. Entrepreneurs can establish a Cyprus company and benefit from one of the lowest corporate income tax rates in the EU at just 12.5%.

This creates a highly efficient structure: the Cyprus company pays a low corporate tax, and when it distributes profits as dividends to a shareholder with Cyprus tax residency and non-dom status, those dividends are received with zero additional personal tax. This synergy between corporate and individual tax benefits makes Cyprus a top-tier jurisdiction for structuring international investments.

C. Savva & Associates: Your Partner in Cyprus Residency

Navigating the rules for Permanent Residency and Tax Residency in Cyprus requires expert guidance. At C. Savva & Associates, our team of immigration experts and tax advisors specialises in crafting tailored strategies to maximise returns for investors. We guide you through every step, from the initial investment to securing your non-dom status and maximising your tax benefits.

With Cyprus’s Schengen Area accession by 2026 adding enhanced European mobility to these already exceptional tax advantages, the strategic timing for establishing your Cyprus residency has never been more compelling. To explore how Cyprus residency and its unparalleled tax advantages can work for you, you can contact our specialists for a personalised consultation. Let us help you make your move to Cyprus a seamless and financially rewarding success.