Moving to Cyprus: Non-Dom Regime and 0% Tax on Dividends

Cyprus has established itself as one of the most attractive destinations in Europe for entrepreneurs, investors and freelancers looking to optimize their tax situation. Its non-dom regime allows you to receive dividends and interest at 0% tax for 17 years. Combined with a 12.5% corporate tax rate, no taxation on capital gains from securities, and a reasonable cost of living, the Cypriot tax package is hard to beat.

In this guide, we cover everything you need to know before moving to Cyprus: the non-dom regime, income tax brackets, corporate tax, the IP Box regime, cost of living, visa options, and company formation. If you're considering relocating to Cyprus, this article is your starting point.

1. Why Cyprus attracts so many expats

Cyprus ticks many boxes. The island has been a member of the European Union since 2004 and the eurozone since 2008. This means free movement for EU citizens, no currency risk, and a solid European legal framework.

English is widely spoken. It's a legacy of the British period (independence in 1960). In daily life, you can do everything in English: administration, banking, contracts. This is a huge advantage compared to other destinations like Greece or Portugal.

The climate is exceptional. Over 320 sunny days per year, mild winters and hot summers. Limassol, Paphos and Larnaca offer a high-quality Mediterranean lifestyle.

And above all, taxation is among the most competitive in Europe. Compared to Greece or Malta, Cyprus stands out for the duration and generosity of its non-dom regime.

2. The non-dom regime: 17 years at 0% on dividends

This is Cyprus's trump card. The non-domiciled resident (non-dom) status provides a total exemption on:

• Dividends: 0% tax
• Interest: 0% tax
• Capital gains from securities: 0% (except real estate located in Cyprus)

This exemption lasts 17 years. It's one of the longest in Europe. For comparison, Portugal's IFICI regime lasts 10 years, and Spain's Beckham Law lasts 6 years.

Eligibility conditions

To qualify for non-dom status, you must:

• Be a tax resident in Cyprus (183-day rule or 60-day rule)
• Not have been previously domiciled in Cyprus
• Not have been a Cypriot tax resident for at least 17 of the last 20 years

The 60-day rule is a Cypriot peculiarity. You can become a tax resident by spending only 60 days per year in Cyprus, provided you are not a tax resident of another country and have a permanent home (rented or owned) on the island. This is ideal for entrepreneurs who travel frequently.

Concrete example: investor with EUR 200,000 in dividends

Let's take the case of a French investor receiving EUR 200,000 in annual dividends through a holding company. Here's the comparison:

• In France: 30% flat tax (PFU) = EUR 60,000 in tax. Or progressive scale + CSG = up to EUR 66,000
• In Cyprus (non-dom): 0% = EUR 0 in tax

The savings are massive. Over 17 years, this potentially represents more than one million euros in tax savings. However, be mindful of French tax exit rules (exit tax) if you hold a portfolio exceeding EUR 800,000.

Discussions about non-dom reform (2024-2025)

It's important to mention: discussions took place in 2024-2025 within the Cypriot government regarding a possible reform of the non-dom regime. Some members of parliament raised the idea of introducing a limited duration or stricter conditions, similar to what the UK did in 2024.

As of early 2026, no changes have been adopted. The regime remains in force in its current form. But this is something to watch if you're planning a long-term move. Official sources to consult are the Cyprus Tax Department and the Ministry of Finance publications.

3. Income tax: brackets from 0% to 35%

Personal income tax in Cyprus follows a progressive scale:

• EUR 0 to 19,500: 0%
• EUR 19,500 to 28,000: 20%
• EUR 28,000 to 36,300: 25%
• EUR 36,300 to 60,000: 30%
• Above EUR 60,000: 35%

The EUR 19,500 exemption threshold is generous. An employee earning EUR 25,000 per year would only pay EUR 1,100 in tax, an effective rate of 4.4%.

For expatriate employees, Cyprus offers a 50% exemption on employment income exceeding EUR 55,000 for new arrivals. This exemption applies for 17 years. Combined with non-dom status, it makes the package very competitive for senior executives.

Check our ranking of countries with the lowest taxation to see how Cyprus compares with other destinations.

4. 12.5% corporate tax and IP Box regime

Corporate tax

Corporate tax in Cyprus is 12.5%. This is one of the lowest rates in the European Union, on par with Ireland. This rate applies to the company's net profits.

Deductible expenses are broad: salaries, rent, professional expenses, depreciation, loan interest. The taxable base can be significantly reduced with proper structuring.

The IP Box regime

Cyprus has a very attractive IP Box (Intellectual Property Box) regime. Income generated by intellectual property (patents, software, trademarks) benefits from an 80% exemption. The effective rate thus drops to:

12.5% x 20% = 2.5%

This regime complies with OECD BEPS rules (nexus approach). It is particularly attractive for tech companies, software publishers, gaming companies, and any business generating IP income.

Sources: PwC Tax Summaries Cyprus.

5. Cost of living: Limassol, Paphos, Nicosia

Cyprus offers a cost of living among the lowest in the eurozone. Here are the figures for a single person (excluding rent):

• Average monthly budget: EUR 1,100 (groceries, transport, leisure)
• Restaurant meal (two people, mid-range): EUR 40-60
• Fiber internet: EUR 30-40/month
• Gym membership: EUR 40-50/month

Rent by city

• Limassol (city center, 2-bedroom): EUR 900-1,200/month. This is the hub for entrepreneurs and tech. Prices have risen in recent years.
• Paphos (city center, 2-bedroom): EUR 600-800/month. Quieter, popular with British retirees and families.
• Nicosia (city center, 2-bedroom): EUR 650-850/month. The capital, more administrative and student-oriented.
• Larnaca (city center, 2-bedroom): EUR 550-750/month. Close to the airport, rapidly developing.

Source: Numbeo Cyprus.

For a couple, budget approximately EUR 1,800/month excluding rent. That's 30-40% cheaper than France, while remaining in the eurozone (no exchange fees, SEPA).

6. Visa and residence

EU citizens

If you're an EU citizen, settling in is straightforward. You benefit from free movement. Simply register with local authorities (Yellow Slip) within 4 months of arrival. No visa required.

The 60-day rule

Cyprus is one of the few countries offering the possibility to become a tax resident by spending only 60 days per year on the island. The conditions:

• Not be a tax resident of another country
• Spend at least 60 days in Cyprus during the tax year
• Have a permanent home in Cyprus (rented or owned)
• Carry out business activities in Cyprus or be employed or a director of a Cypriot company

Non-EU citizens: the options

• Digital Nomad Visa: minimum income of EUR 3,500/month, remote work for clients outside Cyprus. Duration: 1 year renewable up to 3 years. Cost: EUR 70.
• Business Facilitation Unit Permit: for entrepreneurs creating a company in a strategic sector (tech, innovation, shipping). Cost: approximately EUR 500.
• Permanent Residence (Fast Track): minimum real estate investment of EUR 300,000 (new), stable annual income of EUR 50,000 from abroad. Cost: EUR 500.

Official sources: Cyprus Ministry of Interior.

7. Banking and company formation

Opening a bank account

The main banks are Bank of Cyprus and Hellenic Bank. Account opening is possible but compliance procedures (KYC/AML) are longer than elsewhere since the 2013 banking crisis. Allow 2 to 4 weeks.

Cyprus is in the eurozone and part of the SEPA network. European transfers are free or low-cost. The island also attracts many fintechs, and neobanks like Wise or Revolut work perfectly.

Creating a Private Company Limited (Ltd)

Company formation in Cyprus is fast:

• Legal form: Private Company Limited by Shares (equivalent to an SARL/GmbH)
• Minimum capital: EUR 1,000 (no obligation to pay up)
• Formation time: 5 to 8 business days
• Total cost: EUR 1,500 to 3,000 (accountant, lawyer, official fees)
• Registered office: required in Cyprus, virtual office accepted

Registration is done through the Department of Registrar of Companies. You will need a company secretary (mandatory in Cyprus) and a local accountant for annual tax filings.

Annual obligations include: corporate tax return, audited accounts (mandatory for all Ltd companies), VAT return if applicable, and defense contribution (GHS/GESY at 2.65% of salary).

8. Pros and cons

Pros

• 0% on dividends and interest for 17 years (non-dom)
• 0% on capital gains from securities
• 12.5% corporate tax, among the lowest in the EU
• IP Box at 2.5% effective rate
• 60-day rule for tax residency
• EU and eurozone member
• English widely spoken
• Over 320 sunny days per year
• Competitive cost of living
• No wealth tax or inheritance tax

Cons

• Small island, relatively geographically isolated
• Variable internet quality (80 Mbps average, lower than Romania or Estonia)
• Very small French-speaking community
• Political division of the island (northern part occupied by Turkey)
• Lengthy banking procedures (legacy of the 2013 crisis)
• Ongoing discussions about possible non-dom reform
• Mandatory audited accounts even for small companies (additional cost)

To compare Cyprus with other destinations, check our comparators: Cyprus vs Malta and Cyprus vs Greece.

FAQ

Is the non-dom regime really 0% on dividends?

Yes. Non-domiciled residents in Cyprus benefit from a total exemption on dividends and interest. There is no tax to pay, nor any special contribution (the Special Defence Contribution does not apply to non-doms). This exemption lasts 17 years.

Do I need to live 183 days in Cyprus to be a tax resident?

Not necessarily. Cyprus offers a 60-day rule: if you spend at least 60 days on the island, are not a tax resident elsewhere, and have a home and economic activity in Cyprus, you can be considered a tax resident.

How much does it cost to set up a company in Cyprus?

Between EUR 1,500 and 3,000 all-inclusive (lawyer, accountant, registration fees). The minimum capital is EUR 1,000. The timeline is 5 to 8 business days. Registration is done through the Registrar of Companies.

Will the non-dom regime be reformed?

Discussions took place in 2024-2025, but no reform has been adopted as of early 2026. The regime remains in force. Follow announcements from the Cyprus Tax Department to stay informed.

Cyprus or Malta: which is the better choice?

Cyprus is more advantageous for investors thanks to the 0% on dividends (non-dom). Malta offers a tax refund system for companies (effective rate of around 5%). Cyprus has a lower cost of living and a larger island. Check our Cyprus vs Malta comparison for full details.