News and developments
The end of an era? UK non doms should consider moving to Cyprus
With the unveiling of the UK budget on 30th October came the confirmation that the current tax treatment for UK resident non-domiciled individuals (non-doms) will be abolished from 6 April 2025.
Where do we go now ?
Cyprus is an increasingly popular choice for relocation due to its tax friendly incentives for high net worth individuals, high quality of life, education system, national healthcare system and EU member status. As an ex British colony and a Commonwealth state, Cyprus is the jurisdiction within the European Union most like the UK in terms of the judicial system, reporting and assurance standards and companies’ legislation. Furthermore, Cyprus boasts one of the lowest corporation tax rates in Europe standing at 12.5%, compared to the UK corporation tax rate which currently is 20% and offers a variety of tax incentive schemes enabling individuals and companies to achieve an overall lower effective tax burden; there is a huge availability of a highly skilled and highly educated labour force employable at low wages and fluent in English; and the cost of living and doing business is relatively low when compared with other EU jurisdictions which have an appeal such as Ireland, Italy and Switzerland.
Achieving Cyprus Tax Residence
There are two ways for obtaining tax residence in Cyprus, both requiring physical presence on the island:
Non-Domicile Tax Residency Regime
Cyprus’ non-dom regime offers a great opportunity for those moving from the UK as the current statute exempts individuals who are deemed non-domiciled in Cyprus from paying ANY taxes on their dividends, rental and interest income for a maximum of 17 years.
For an individual to qualify as a non-domiciled tax resident in Cyprus, they must not be tax resident in Cyprus for at least 17 out of the 20 years immediately prior to the tax year of assessment.
Tax incentives for salaried executives
Furthermore, the Cyprus government has introduced an array of tax incentives as stated below aimed at attracting high salaried executives to migrate. Individuals who become Cyprus tax residents, whether under the “60 day rule” or under the “183 day rule” will be eligible for these incentives:
How can my family and I stay there?
For a third country national/UK citizen to have the right to live and/ or work in Cyprus, there are various options available to them to relocate with their family/dependants to Cyprus. Two of the most popular routes are:
Residency by Investment
One way for obtaining residency in Cyprus is through the investor’s migration permit. This offers a fast-track permanent residency in Cyprus for non-EU third country nationals and their family members through an investment of at least Euro 300,000 plus VAT in four investment paths: a brand-new residential property in Cyprus and/ or commercial property or investments into Cypriot regulated investment funds or Cypriot companies. The applicants must also prove a secure income of at least Euro 50,000 from abroad which increases marginally for the dependent spouse and children. The investor’s migration permit gives an applicant and their family a right to permanent residence in Cyprus for life with the right to apply for citizenship.
Residency by Employment
Cyprus is committed to enhancing the island’s position as an international high-growth business centre by attracting international investments and talent and has a scheme by which companies can register as “Companies of Foreign Interest”. Such companies have the right to employ third country nationals of specific professions and qualifications. A company can qualify as a “Companies of Foreign Interest” if it operates in various sectors such as shipping, IT, pharmaceuticals or if the issued share capital of such a foreign company is owned at least by 50% plus 1 share by a third country national which is of particular interest to UK businesses wishing to relocate to Cyprus. Employees shall have the ability to enter and reside in Cyprus while bringing their family members as dependents. There are two categories: one for highly paid staff receiving a minimum gross monthly salary of €2.500 and another category for support staff.
Due to a recent amendment in Cyprus’ naturalisation legislation, this employment and residence visa also gives employees as well as their family members the right to apply for naturalization after legal residence for cumulative periods of no less than 4 years or 3 years, depending on the level of knowledge of the Greek language.
Next Steps
MPC Legal can advise all impacted individuals on the most suitable solution for them, their family and/ or their business to relocate to Cyprus and take advantage of Cyprus’ favourable tax framework.