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Cyprus has a pleasant climate, a suitable geographical region, tax benefits for corporations, and advantages for people through the Cyprus non-dom regime.
Most foreign entrepreneurs chose Cyprus because of its attractive low tax jurisdiction and non-domicile status. As an EU member state, Cyprus is a desirable tax haven for both high-net-worth people and businesses. It serves as a hub for their commercial activities and family migration.
Any nationality can apply for Non-Dom Tax Residency under the new 60-day rule, which replaces the former 183-day rule. Under the abovementioned regulation, a Cyprus tax resident must pay taxes in Cyprus on their international income.
Both companies and people will find Cyprus to be a fantastic place to do business. Many foreign business people see the country as a vital link between the EU and other trading blocs and nations. Countries in the Middle East, Asia, and Africa are examples.
Cyprus features innovative legal, banking, and accounting systems and a highly skilled and multilingual workforce. It also boasts excellent telecommunications systems, convenient year-round flight connections, business-friendly tax regulations for persons, enterprises, and stunning beaches and weather. The European Union is ideal for starting a business. We have mentioned the main advantages offered for the Cyprus Non-Dom Regime.
Cyprus: The Country
Sometimes known as Kypros, Cyprus is a vast island in the Mediterranean Sea’s Eastern Aegean region. Nicosia, the country’s capital, is located at 35:18:56N 33:38:23E.
After Sardinia and Sicily, and ahead of Crete, Cyprus is the third biggest island in the Mediterranean.
It borders Turkey to the south, Syria, Lebanon to the west, and Israel to the northwest. Its strategic location and relative neutrality concerning numerous Middle Eastern countries have made it a crossroads, and it has proven to be helpful in some complicated diplomatic negotiations.
Cyprus has strong cultural ties with Greece, yet the Greeks do not govern it. From 1925 to 1960, it was a British colony. It had been under British administrative administration since 1878 and had been under Ottoman Empire control for the majority of the previous few centuries.
The Definitions of Residence and Non-domicile in Cyprus
⧫ If a person spends more than 183 days in a calendar year in Cyprus, they are considered a tax resident. Before implementing the Non-domicile tax regime, Cyprus tax residents’ dividends, rent, and interest income were liable to the Special Contribution for Defence Tax (SDC).
This is why the establishment of the “non-domicile” tax status was critical. July 2015 stipulates that non-Cyprus domiciled tax residents are exempt from SDC, regardless of where their income is generated or paid from.
⧫ Individuals whose primary source of income is dividend or interest income will find the Cyprus non-domicile tax policy particularly appealing. Individuals can also take advantage of the capital gains exemption from taxation.
The Cyprus Non-Domiciled – Tax Advantages
As of July 16, 2015, a non-dom earning dividend income from both foreign and local investments would not be subject to the 17 percent Special Defence Contribution (“SDC”; sometimes known as the “capital gain tax of Cyprus”). In addition, dividend income is tax-free in all circumstances. As a result, a non-domiciled Cyprus resident will pay no tax on dividend income.
Interest: As of July 16, 2015, a non-dom earning interest income from both international and domestic sources will not be liable to SDC in the amount of 30%. Furthermore, interest income is excluded from income tax.
As a result, a non-domiciled Cyprus resident will pay no tax on interest income.
Rental income: As of July 16, 2015, non-doms generating rental income from properties in Cyprus or overseas will not be subject to the 3% SDC. Only the standard income tax rates will apply to rental income (following a 20 percent allowance).
The Advantages of a Cyprus Holding Company
Choosing the right location for a holding company can be a difficult task that requires careful consideration of various tax and non-tax variables. A Cyprus holding company is frequently the best option.
The Republic of Cyprus has positioned itself as the most appealing jurisdiction for holding companies within the EU and abroad. Cyprus is a good place for holding companies because of its investor-friendly atmosphere, business-friendly and distinctive tax structure, EU membership, and OECD conformity. It’s even easier to move to Cyprus if you’re an EU citizen. Cyprus’s strategic location between Europe and the Middle East makes it suitable for holding corporations with a regional focus.
Cyprus has been a hub for trade and commerce in the Eastern Mediterranean and the Levant for over 3000 years, becoming such a true melting pot of cultures and customs, delivering services as a bridge between East and West due to its strategic location.
The following are some of the benefits of forming a company in Cyprus:
1. collect profits with low withholding tax rates by using its double tax treaty network;
2. exclude the incoming dividend from taxation if certain conditions are met;
3. distribute the dividend to non-resident shareholders without withholding tax in Cyprus (whether they live in the EU or a country with which Cyprus has a double tax treaty).
The Advantages of Doing Business in Cyprus
Doing business in Cyprus is the best approach to ensure the success of your international operations and tax planning as a Cyprus non-domiciled. You can reward your hard effort and hard-earned money handsomely. Cyprus is a great place to start a business, especially for young entrepreneurs. Doing business in Cyprus can be a stepping stone to success and provide you with a set of valuable instruments for international operations. The first instrument is a 12.5 percent company tax, one of the lowest in the EU.
These benefits are available to non-domiciled Cypriots as well.
1. Access to the EU’s health-care and social-insurance systems
2. To become a tax resident, one only needs to be present for 60 days.
3. The program has a 17-year assurance.
Conclusion
We hope this information might help you know more about the main advantages of the non-dom regime In Cyprus.
You may also like: 8 Tax Tips for Small Business Owners
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