Cyprus remains one of the best and most popular corporate jurisdictions. A considerable number of entrepreneurs and well-established businessmen continue to use Cyprus in their corporate structures for holding and finance purposes. Cyprus offers great incentives for such structures which include the new IP regulations, the upgraded fund regulation, the yacht leasing scheme and the private aircraft scheme, the notional interest deduction, along with many other excellent tax incentives.
Cyprus is also the jurisdiction of choice for Non-Doms and high net worth individuals (HNWIs) who choose Cyprus to relocate their tax residency and hence benefit from its favorable tax regime. At the same time, by providing HNWIs the option to relocate in Cyprus, the Republic of Cyprus encourages its growth as a business hub and continues to establish itself as an emerging player in many new sectors such as Fintech, Fund establishment and administration and other innovative new businesses.
The below are some of the advantages of Non-Dom Individuals who choose to relocate to Cyprus:
The Non-Dom status is obtained by individuals who have relocated their tax residency to Cyprus.
A recent amendment to the Income Tax Law of Cyprus, which was published in the official gazette of the Republic of Cyprus in its edition of 28 July 2017, changes the criteria by which a Non-Dom Individual would be considered to have relocated his/her tax residency to Cyprus. The amending law is considered to have entered into force as from 1 January 2017 and individuals will be considered to be Cyprus tax residents if:
1. They reside in Cyprus for at least 60 days in the year of assessment;
2. They conduct their business in Cyprus and/or are employed in Cyprus and/or hold an office in a Cyprus tax resident person during the year of assessment; and
3. Maintain a permanent residence in Cyprus, privately owned or rented.
It is noted that the above criteria must be met cumulatively and they are subject to such individuals not been tax residents in any other jurisdiction during the year of assessment and not having resided in any other jurisdiction for one or more periods which exceed 183 days within the year of assessment.
The advantages of such relocation for individuals with a Non-Dom status are of great importance, since in addition to the favorable income tax regime of Cyprus, they are no longer subject to Special Defense Contribution and are therefore exempt from taxation in Cyprus on their worldwide income from dividends, passive interest and rental income.
For further information, please contact Soulla Dionysiou at Hellicar, Dionysiou & Co LLC at sdionysiou@hdlaw.eu / info@hdlaw.eu / +357 22 272360.
