Cyprus residency

Evaluating Your Residency: Cyprus as an Attractive Option for UK Non-Doms

Introduction

Given the ongoing uncertainty around the UK’s Non-Domiciled (Non-Dom) tax regime, many UK resident non-dom’s are evaluating the potential impacts and considering their options outside the UK. With over 50 years of experience in advising clients on jurisdictional changes and beneficial solutions, the professionals at Dixcart Cyprus have prepared insights to assist you in your decision-making process.

Should I Leave the UK?

The recent proposal to scrap the remittance basis of taxation has prompted many Non-Doms to reconsider their UK tax residency. Relocating involves numerous factors such as family situation, income sources, new tax exposures, visa/residency permit requirements, and lifestyle preferences. While the decision is personal and complex, we can highlight some key benefits of relocating to Cyprus to help inform your choice.

Could Relocating to Cyprus Be the Answer?

Cyprus, with its 320+ sunny days a year, stunning beaches, vibrant cities, and national parks, is much more than “a rock in the middle of the sea”. It is the 3rd largest Mediterranean island and home to over 1.2 million people, including a significant expatriate community. Strategically located at the crossroads of three continents, Cyprus offers excellent connectivity through its two international airports.

The island boasts diverse living options from modern sea-view apartments in bustling cities like Limassol—dubbed “little Dubai” for its impressive skyline—to serene cottages in picturesque villages. Cyprus is renowned for its safety, excellent educational institutions, robust healthcare system, and a cost of living that is often lower than many other popular destinations for Non-Doms.

In addition to lifestyle benefits, Cyprus offers an attractive Non-Dom tax regime. While Non-Doms are taxed on worldwide income, several exemptions make it a favourable destination. Dividends, interest, and capital gains are exempt from personal income tax, even when remitted to Cyprus, allowing you to enjoy your wealth locally. Cyprus, as an EU member, provides access to EU initiatives and over 60 double tax treaties.

For EU citizens, relocating to Cyprus is straightforward with no visa requirements. Non-EU citizens can benefit from several favourable residency routes, such as establishing a Foreign Interest Company (FIC), which allows directors and key personnel to apply for residency and work permits for themselves and their families. Cyprus also has one of the shortest presence requirements in Europe to be considered a tax resident, with options as short as 60 days under specific criteria.

How Can Dixcart Help?

At Dixcart, we leverage over 50 years of experience to assist individuals worldwide in finding tailored solutions and executing their plans. For immigration clients, we provide comprehensive support, from gathering required documents for visa/residency permits to guiding you through tax structuring and even accompanying you to immigration offices.

If you are considering a move from the UK or any other jurisdiction to Cyprus, reach out to us to see how we can assist you at advice.cyprus@dixcart.com.


Ceasing to be UK Tax Resident – Don’t Get it Wrong!

Introduction

It is January 2025 and two people are sitting at the departure gate at Heathrow waiting for their (inevitably) delayed flight to the Bahamas. They start a conversation and talk about why they are flying to this Caribbean island. 

Person A, Mrs Sunseeker, explains to Person B, that she had lived in the UK for a long time as a resident “non-dom,” but that expected changes to the tax rules for longer term residents had meant that she had decided to leave the UK and cease being tax resident; “My friend told me I just had to spend fewer than 90 days each year in the UK.” she declares.

Fortunately for Mrs Sunseeker, Person B, Mrs Tax, is, by nominative determinism, a tax adviser and explains that the old ‘90 day’ rule does not apply anymore and suggests that she takes a look at the UK statutory residence test – link to STR.

Background for Mrs Sunseeker

Mrs Sunseeker moved to the UK in the early 2010s, as a student.  After graduating, she was offered a job in the financial services industry. She has been very successful and accumulated significant personal wealth. 

In 2015, she inherited the shares of a large family business, back home in Dubai, which started to generate a regular dividend income of around £5 million a year which she has kept in her bank account in Dubai. As a UK remittance basis of taxation user, the Dubai dividends have not been taxed in the UK, as Mrs Sunseeker never remitted them into the UK. 

However, with the UK non-dom rules changing, remaining in the UK was going to be just too expensive for income and inheritance tax purposes.  She has therefore decided to move to a warm country.  Mrs Sunseeker is planning to carry on working for the same employer (taking advantage the fact that her firm realises she can work remotely) and, indeed, is likely to be working very hard on the days that she returns to the UK.

She is married. Her husband is British and does not want to spend as much time outside of the UK as his wife. His only source of income is in the UK and he still enjoys his work.  As he is going to stay, they will keep their home and Mrs Sunseeker will live there when she returns to visit him.

What is Mrs Sunseeker’s Tax Status and Why?

While waiting for the flight, Mrs Sunseeker takes a look at the residence test rules.  She realises that the first two parts of the test, the ‘Automatic Tests’ do not apply to her and reads on to the ‘Sufficient Ties’ section. Mrs Sunseeker has four such ties, or connections:

  • Spent more than 90 days in the UK in both of the previous two tax years;
  • Will have available accommodation in the UK;
  • Has a UK tax resident spouse and will continue to do so;
  • Will work in the UK for more than 40 days under the definition of the test.

What Will the Tax Impact Be?

As she has four ties, Mrs Sunseeker will be tax resident in the UK, for at least the first two years after she leaves, by spending just 16 days per year in the UK, far lower than the 90 she had anticipated.

The next time she receives her large dividend, she would still be considered UK tax resident and will suffer UK income tax. It may be even worse, if she has not paid this tax on time she would receive a late payment penalty, which is quite likely because she no longer believed she was UK tax resident and she could be liable for penalties under the ‘offshore assets’ rules too.

The problem would become further compounded were Mrs Sunseeker to sell her shares in the family business in Dubai for a large gain, while she believed she was not UK resident.

Other Considerations

Please note for completeness, that the UK ‘split year rules’ are not being considered, nor are the tax implications of Mrs Sunseeker continuing to receive a salary for work she undertakes when in the UK. Dixcart, would of course advise on these, where relevant.  The Bahamas does not have a double tax treaty with the UK, and there is therefore no tie breaker clause to consider in this scenario either.

So, What Could Mrs Sunseeker Do?

Can you believe it, the flight is still delayed!

Mrs Sunseeker picks up her phone and calls Mr Sunseeker. Whilst he loves his job, he now understands that there will be a high tax cost if his wife does not properly exit UK tax residence.  He packs his things and heads to the airport. While on his way, he calls his employer and resigns, and then calls an estate agent to list the home for immediate rental.

The repercussions of the two actions above, would be to reduce the number of UK ties that Mrs Sunseeker has, from four to two:

  • 90 days in both of the previous two tax years; and
  • Work tie (assuming she still works, when back in the UK).

Now she would be able to spend up to 90 days in the UK per year and lose her UK tax residence status.

Very lucky!

Whilst everyone else on the flight was cursing the delay, Mrs Sunseeker had struck lucky.  However, had Mr and Mrs Sunseeker started to plan earlier than at the airport departure lounge, there would have been more options to consider around their employment situation and their home status, and they might have avoided having to take such extreme steps.

How Can Dixcart Help?

Dixcart’steam of lawyers, accountants, immigration and tax professionals would have assisted Mr and Mrs Sunseeker with:

  • Pre-departure tax planning;
  • Ongoing tax planning, to ensure that UK tax residence is not accidentally acquired again in the future;
  • Employment law advice for both individuals in relation to their ongoing employment contracts, should they wish to continue to work, as well as related UK tax advice regarding the income being earned;
  • Application for Indefinite Leave to Remain before they leave the UK, so they can be sure that they can return in the future.

Additional Information

If you require additional information on this topic, please contact your usual Dixcart adviser or speak to Paul Webb or Peter Robertson in the UK office: advice.uk@dixcart.com.

Dixcart UK, is a combined accounting, legal, tax and immigration firm.  We are well placed to provide these services to international groups and families with members in the UK. The combined expertise that we provide from one building, means that we work efficiently and coordinate a variety of professional advisers, which is key for families and businesses with cross-border activities.

By working as one professional team, the information we obtain from providing a service, can be shared appropriately with other members of the team, so that you do not need to have the same conversation twice!  We are ideally placed to assist in situations as detailed in the case study above. We can provide cost effective professional services for companies and individuals and also offer in-house expertise to provide assistance with more complex legal and tax matters.

How to Become Swiss Resident by Working in Switzerland

Switzerland is a popular destination for non-Swiss nationals wishing to become Swiss resident.

Working in Switzerland is often overlooked as an option, in terms of being able to move to this country. 

Why do Individuals Choose to Live in Switzerland?

    There are many reasons why Switzerland is a desirable country to live in.

    These include:

    • A high standard of living with excellent working conditions and business opportunities.
    • Beautiful scenery and an active outdoor lifestyle.
    • A central location within Europe, with flight connections to over 200 international locations.
    • Many of the world’s largest international organizations have their headquarters in Switzerland.
    • Switzerland is not part of the EU but one of 29 countries making up the ‘Schengen’ area. An area which enjoys a number of travel rights.

    Additional important information regarding this jurisdiction:

    • Switzerland, together with, Iceland, Liechtenstein and Norway, forms the European Free Trade Association (EFTA).
    • Switzerland is divided into 26 cantons, each currently with its own basis of taxation.

    Non-Swiss nationals are allowed to stay in Switzerland as tourists, without registration, for up to three months. After three months, anyone planning to stay in Switzerland must obtain a work and/or residence permit, and formally register with the Swiss authorities.

    When applying for Swiss work and/or residence permits, different regulations apply to EU and EFTA nationals compared to other nationals.

    How to Become Swiss Resident?

    Residence – Working in Switzerland

      The acquisition of a Swiss work permit allows a foreigner to become legally Swiss resident.

      They are three ways to be entitled to work in Switzerland:

      1. Being hired by an existing Swiss Company.
      2. Forming a Swiss Company and becoming a director or an employee of the Company.
      3. Investing in a Swiss Company and becoming a director or an employee of the Company.

      A. Being Hired by an Existing Swiss Company

      The individual will need to find a job and the employer register the employment, before the individual actually starts work.

      It is straightforward for EU/EFTA citizens as they enjoy priority access to the labour market in Switzerland.

      Non-EU/EFTA nationals, however, are only allowed to enter the Swiss labour market if they are appropriately qualified, for example if they are managers, specialists and/or with higher education qualifications. They also need to meet a higher level of due diligence criteria, compared to EU/EFTA nationals.

      The employer needs to apply to the Swiss authorities for a work visa, while the employee must apply for an entry visa from his/her home country. The work visa will allow the individual to live and work in Switzerland.

      B & C. Forming or Investing in a Swiss Company and Becoming a Director or an Employee of the Company

      Procedures for both EU/EFTA and for non-EU/EFTA nationals are easier, if the new resident forms a Swiss company and is employed by it.

      Any foreign national can form a company and therefore potentially create jobs for Swiss nationals. The owner of the company is eligible for a residence permit in Switzerland, as long as he/she is employed by the company in a senior capacity. The owner of the company is eligible for Swiss residence as long as he/she is employed by the company.

      In principal, non-EU/EFTA nationals can form a company which must generate an annual minimum turnover of CHF 1 million, and create new jobs exploiting new technologies and/or the development of the region and contribute to the economic development of the country. The types of economic development objectives for the company, which are regarded positively in Switzerland, include; opening up new markets, securing export sales, establishing economically significant links abroad, and the creation of new tax revenue. Precise requirements vary by canton.

      Alternatively, EU and non-EU/EFTA applicants can choose to invest in a company which is struggling to expand, as it lacks the necessary funding. This new funding should then enable the company to create jobs and assist the Swiss economy to expand. The investment must add economic value to a particular Swiss region.

      A higher level of due diligence criteria must be met by non-EU/EFTA nationals, in comparison to EU/EFTA nationals, and the business proposition, put forward, will also need to offer greater potential.

      Taxation

        Individuals

        Each canton sets its own tax rates and generally imposes the following taxes: income, net wealth, real estate, inheritance and gift tax. The income tax rate varies by canton and is between 21% and 46%.

        In Switzerland, the transfer of assets, on death, to a spouse, children and/or grandchildren, is exempt from gift and inheritance tax, in most cantons.

        Capital gains are generally tax free, except in the case of real estate. The sale of company shares is classified as an asset, which is exempt from capital gains tax.

        Swiss Companies

        Swiss companies can enjoy a zero-tax rate for capital gains and dividend income, depending on the circumstances.

        Operative companies are taxed as follows:

        • The effective cantonal and federal corporate income tax rate (CIT) is between 12% and 14% in most cantons. The Geneva corporate tax rate is 13.99%.
        • Swiss Holding Companies benefit from a participation exemption and do not pay tax on profits or capital gains arising from qualifying participations. This means that a pure Holding Company is exempt from Swiss tax.

        Withholding Tax (WHT)

        • There is no WHT on dividend distributions to shareholders based in Switzerland and/or in the EU (due to the EU Parent/Subsidiary Directive).
        • If shareholders are domiciled outside Switzerland and outside of the EU, and a double tax treaty applies, the final taxation on distributions is generally between 5% and 15%.
        Double Tax Treaties

        Switzerland has an extensive double tax treaty network, with access to tax treaties with over 100 countries.

        Additional Information

        If you require additional information regarding moving to Switzerland to work, or have any other questions about this jurisdiction, please contact the Dixcart office in Switzerland: advice.switzerland@dixcart.com. Alternatively, please speak to your usual Dixcart contact.

        Is your Portuguese NHR coming to an end? Have you considered Cyprus?

        Introduction

        Here is the scenario; You have been making the most of Portugal’s fantastic tax regime for Non-Habitual Residents (NHRs) for the last 9 years. But you know that your NHR status will come to an end after the 10th year, and, if you stay in Portugal, you will have to pay tax at the standard Portuguese rates once it does end.

        We understand that many of those coming to the end of their NHR status will have made Portugal their home and will be willing to remain tax resident in Portugal. However, others may decide that their tax exposure would be too great and so will be considering moving and becoming a tax resident somewhere else. But where?

        The Dixcart Group have been advising clients on questions such as this for over 50 years. Being a global group we have experienced teams with expert local knowledge in a variety of jurisdictions working as one to help you with your decision.

        In this article we’ll explore why we believe a move to Cyprus could be exactly what you are looking for.

        Why Cyprus?

        Cyprus is an appealing European jurisdiction, located in the eastern Mediterranean Sea offering a warm climate and attractive beaches. Cyprus is the 3rd largest and 3rd most populated of the Mediterranean Islands and so offers a lot of choice for those considering relocating. There is a perfect balance of cosmopolitan living and rural villages to choose from. While Nicosia serves as the centrally located capital of the Republic of Cyprus, the growing financial hub resides in Limassol on the southern coast.

        Strategically located at the crossroads of three continents, Cyprus is accessible from Europe, Asia and Africa. The official language is Greek, with English also being widely spoken. Cyprus also offers great public sector services such as a fantastic healthcare system and excellent schools.

        Given the high standard of living and the palette of choice available on the island, together with the corporate and personal tax incentives for expatriates and high net worth individuals, relocating to Cyprus has long been the first choice for many expats looking for a place to settle.

        How do I Become a Cyprus Tax Resident?

        Individuals can move to Cyprus and become a Non-Domiciled Tax Resident, by spending at least 183 days in Cyprus without additional conditions. This Non-Domiciled Tax Residency status is applicable for 17 out of 20 years and comes with a wide array of benefits.

        For individuals with closer ties to Cyprus such as running/operating a business in Cyprus and/or being a director of a company which is tax resident in Cyprus, the increasingly popular ‘60 Day Tax Residency Rule’ might be of interest.

        To be eligible for the ‘60 Day Tax Residency Rule’ you’re required to meet the below criteria:

        • Reside in Cyprus for at least 60 days in a property which you own or rent.
        • Operate/run a business in Cyprus and/or be employed in Cyprus and/or act as a director of a company which is tax resident in Cyprus.
        • You must not be a tax resident in any other country.
        • You must not reside in any other single country for a period exceeding 183 days in aggregate.

        In order to reside in Cyprus, you have a variety of options. These differ for EU nationals and non-EU nationals. It is also worth considering that, in some cases, after only 5 years of residency you can apply for citizenship through naturalisation and receive your Cypriot passport. We have included a brief summary of the most options below:

        Residency procedure for citizens of the EU/EEA/Switzerland

        1. Registration of E.U. citizens (MEU1)

        All citizens of the EU/EEA/Switzerland, as well as their family members who are also citizens of the EU/EEA/Switzerland, have the right to work and reside for a period of up to 3 months without any conditions or any formalities other than the requirement to hold a valid identity card or passport.

        After 3 months they still have the right to work and live in the republic but just register their presence with the immigration office. They must hold a valid identity card or passport and:

        • be workers or self-employed persons in Cyprus; or
        • have sufficient resources for themselves and their family members not to “become a burden on the social assistance system” during their period of residence and have comprehensive sickness insurance cover in Cyprus.

        Residency options available for non-EU nationals

        1. Starting a business
        1. Establishing a Foreign Interest Company (FIC)

        Work and residency permits can be obtained for relevant employees and Directors, as well as their family members.

        1. Establishment of a Small/Medium Size Innovative Enterprise (Start-up Visa)

        The core goal of the Cyprus start-up visa scheme is to allow talented, non-EU entrepreneurs to reap the benefits of residing and working in Cyprus. There are two main schemes: (1) the Individual Start-up Visa Scheme; and (2) the Team Start-up Visa Scheme. This visa is available for one year, with the option to renew and allows you to work and reside in Cyprus.

        1. Permanent Residence through Investment Program (PRP)

        Applicants must make an investment of at least €300,000 in one of the investment categories required under the programme, the most popular of which are real estate and investing capital into in a Cyprus company. They must also have an annual income of at least €50,000 and deposit a minimum €30,000 into a bank account in Cyprus, for a minimum period of three years.

        1. Other less popular options available that our team can help with

        There are less individuals using these permits due to their specific nature. However, for the right individual they can be the right choice. These include the Permanent Residence Permit on a Visitor Basis (Category F) Permit. This doesn’t allow you the right to work but you can still receive income from overseas, such as a pension or dividends. There is also a Digital Nomad Visa, however the cap of the total amount of allowed applications has been reached and therefore this programme is currently unavailable.

        If you would like to hear more about each option, please contact a member of the team here in Cyprus and we will be more than happy to run through the options in full detail with you and discuss what might be best for you.

        What are the Advantages of Becoming a Cyprus Tax Resident?

        Cyprus non-domicile status can be an effective means to optimise personal wealth planning. The advantages of becoming a Cyprus tax resident, an option for individuals not previously tax resident in Cyprus, include the following:

        1. Non-Domicile Status

        The non-domicile tax regime is particularly interesting for individuals whose main source of income isn’t salary based. This is because the following sources of income attract a 0% tax rate in Cyprus:

        • Dividends
        • Interest income
        • capital gains, other than on the sale of immoveable property in Cyprus

        There are also other tax advantages, including a low rate of tax on foreign pension income, as well as no wealth or inheritance taxes.

        The zero tax benefits, mentioned above, are enjoyed even if the income has a Cyprus source and/or is remitted to Cyprus.

        1. Employment Income Tax Exemption

        For those that do receive a salary, Cyprus has recently updated its income tax laws and now has some very attractive income tax exemptions for those Non-Domiciled Tax Residents who do take up employment in the Republic.

        1. The 50% exemption:

        50% of the remuneration of employees whose first employment in Cyprus began on, or after, 1 January 2022 is exempt from income tax for a period of 17 years, provided that their annual remuneration exceeds €55,000, and the employees were not residents of Cyprus for a period of, at least, 15 consecutive years before the commencement of their employment in Cyprus.

        1. The 20% exemption:

        Individuals whose first employment in Cyprus began after 26 July 2022 and earn less than €55,000 are eligible for a 20%, or €8,550 exemption (whichever is lower) from their employment income, for a maximum period of 7 years provided that the employee was not a resident of Cyprus for a period of, at least, 3 consecutive years before the commencement of their employment in Cyprus.

        1. Tax Exemption on Income from Employment Outside Cyprus

        Individuals who are employed outside of Cyprus, for more than 90 days in aggregate in a tax year, by a non-Cyprus tax resident employer or foreign permanent establishment of a Cyprus tax resident employer, are exempt from income tax on this income.

        If you are interested in making the most of the benefits outlined above and would like to hear more, please contact a member of our expert team who would be more than happy to run through the details and outline how we can help you make the most out of the fantastic tax efficiencies that Cyprus has to offer.


        Launch Your Dreams in Europe: Portugal’s Start-Up Visa Program

        Are you an aspiring entrepreneur with a groundbreaking idea and the drive to see it flourish? Look no further than Portugal’s Start-Up Visa Program! This initiative welcomes foreign innovators like yourself, offering a streamlined path to residency or citizenship, and the chance to establish your business in a thriving European hub.

        Why Portugal?

        Portugal has rapidly become a magnet for entrepreneurs and is lauded for its:

        • Supportive Ecosystem: A network of business incubators, co-working spaces, and government agencies provide guidance, resources, and funding opportunities to help your start-up take root.
        • Favourable Tax Environment: Portugal offers competitive tax rates for both companies and individuals:
          • Individuals: under certain conditions, individuals may benefit for the favourable tax regime called the NHR – see here for more details. Other advantages may still exist for those not eligible for NHR.
          • Corporate: Taxes from 12.5% apply to start-ups in Portugal mainland – however, making use of the Madeira International Business Centre is an alternative option which provides an attractive tax rate of 5%. Read here for more details.
            • Further, government support programs are available in Portugal to support start-ups.
        • High Quality of Life: Portugal boasts a stunning coastline, rich culture, and a welcoming population, making it an ideal place to live, work, and raise a family.
        • Doorway into Europe: a gateway into the world’s largest trading bloc with access to a favourable business with clients, suppliers, grants and beneficial tax regimes

        Furthermore, Portugal is rapidly emerging as a significant player in the global start-up landscape, with several companies achieving unicorn status and attracting significant investment. This thriving ecosystem presents a compelling opportunity for ambitious entrepreneurs seeking to establish their businesses in Europe.

        The Start-Up Visa: Your Gateway to Success

        The Start-Up Visa Program streamlines the visa application process for foreign entrepreneurs, allowing you to:

        • Gain residency in Portugal: This visa allows you to live and work in Portugal, granting access to the European Union market.
        • Bring your family: You can extend your visa to include your spouse and dependent children.
        • Focus on your business: With residency secured, you can devote your energy to building your dream company.
        • Obtaining Portuguese citizenship. After having lived in Portugal for five years, you and your family can apply for citizenship or permanent residency.

        Eligibility and Requirements

        To qualify for the Start-Up Visa, your business must meet the following criteria:

        • Innovation: Your business idea must be deemed innovative by IAPMEI, the Portuguese public agency responsible for innovation in the economy and who evaluates applications. This typically involves presenting a unique product or service, deemed innovative, with high growth potential. Eligible criteria includes:
          • Opening or relocating a company in Portugal;
          • Focus on technology and knowledge;
          • Have the potential to attain, after five years after the incubation period, a turnover over 325.000€ per year, and/or assets value over 325.000€ per year.
        • Job creation: Your business plan should demonstrate the potential to create qualified jobs in Portugal.

        Portugal has many incubators to mentor and support new businesses. Explore a certified incubator and ask for a quotation of services. A signed contract with an incubator will be required when submitting for this type of visa option. A complete list of eligible incubators for the purposes of the start-up visa may be found here (IAPMEI – Página Inicial).

        Minimum Stay Requirements:

        • You must be present in Portugal, within a 24 months period, for 18 months in a row or 16 intermittent months to maintain your residency status.

        Minimum Payments:

        • There is no minimum investment required for the Start-Up Visa, unlike other residency programs in Portugal. However, you must demonstrate sufficient funds to support yourself and your dependents for the first year (as referred above).

        Evaluation of the Visa

        IAPMEI reviews and approves applications for the start-up visa. The evaluation of the visa is based on the degree of innovation, the scalability of the business, the market potential, the capacity of the management team, the potential for creating qualified employment in Portugal and the relevance of the applicant in the team.

        The processing time is at least 6 months to a year.

        Taking the Next Step

        At Dixcart Portugal, we are passionate about helping aspiring entrepreneurs like you navigate the complexities of international business ventures. We offer comprehensive guidance and to ensure a smooth and efficient journey.

        Contact us today to schedule a consultation and learn how we can help you turn your vision into reality in Portugal (advice.portugal@dixcart.com). Together, let’s launch your success story in Europe!

        Additional Notes:

        It is important to remember that this information is for general informational purposes only and does not constitute advice. It is highly recommended to consult with a qualified professional on your specific situation.

        Key Employee Initiative – Fast-track Work Permit in Malta for Non-EU Highly-Skilled Workers

        What is the Key Employee Initiative?

        The Key Employee Initiative (KEI) provides a fast-track work permit for highly specialised Third-Country Nationals (TCNs), who are employed in Malta.

        The scheme enables work permits to be issued to key prospective employees, no longer than 5 working days from the date of application, under normal circumstances.

        Third-Country Nationals

        Third-Country Nationals require a single work permit to be able to obtain residence and be employed in Malta. This is because TCNs are not members of the EU or EFTA, and are therefore not able to move across borders, in the EU, without the proper documentation. 

        However, TCNs who are high-skilled workers, are provided with a fast-track work permit service by the Key Employee Initiative. Under normal circumstances, the scheme will issue work permits in not more than 5 days, as detailed above. In contrast non highly specialised TCNs must wait for at least a couple of months.

        Who is Defined as a Highly Skilled Worker?

        Highly-skilled workers include individuals who possess advanced technical, academic and interpersonal skills. They usually flourish in the areas of; problem-solving, leadership, system improvement and creativity. Examples of highly-skilled workers include; university professors, engineers, biotech scientists, business directors, and IT experts. 

        Criteria

        Malta’s Key Employee Initiative (KEI), is available to highly technical or managerial professionals with the relevant qualifications and experience for the job they are applying for.

        Eligible highly-skilled workers are required to meet the following requirements: 

        • Have valid travel documents.
        • Receive an annual gross salary of at least €35,000.
        • Be in possession of certified copies of qualifications and necessary work experience.
        • The employer must declare that the individual has the necessary credentials for the assigned role. Should the applicant wish to be employed by a Maltese company of which s/he is a shareholder or ultimate beneficial owner, s/he must have a fully paid up share capital of at least €500,000 OR must have made a capital expenditure of at least €500,000 to be used by the company (fixed assets only, rental contracts do not qualify).

        Benefits:

        The following benefits are available through Malta’s Key Employee Initiative:

        • The KEI is a fast-track version of the standard single work permit application, with applications being approved in just 5 days.
        • Applications can be submitted online, without the applicant needing to be present in Malta.
        • Approved applicants are issued with a residence permit valid for 1 year. This  can be renewed, subject to the presentation of a valid definite or indefinite contract, and an original ‘annual tax declaration form’, stamped by the Maltese Inland Revenue Department.
        • Visa-free travel within the 26 Schengen Area Countries, by virtue of the Maltese residence card. This is limited to a maximum of 90 days every 180 days.

        Family Members of Work Permit Holders

        Non-EU nationals who have been legally residing in Malta for over a year (in specific circumstances this may be reduced), are eligible to apply for the ‘reunification’ of family members. This includes spouses over the age of 21 and children under the age of 18.

        Long-term Residents

        Long-term residence status may be granted to persons legally residing in Malta for a continuous 5 year period.

        A successful application requires; proof of continuous residence prior to the application date, and the ability to show stable and regular income of a stipulated amount. Dixcart can provide details of the other requirements, which include the need to have health insurance and attendance of a language and culture course.

        Tax Treatment

        • Tax is charged at progressive rates (capped at a maximum of 35%), on Malta sourced income and capital gains, and on foreign source income (excluding foreign source capital gains), that is remitted to Malta.
        • No tax is chargeable on foreign sourced income that is not remitted to Malta.
        • Capital gains are tax-exempt in Malta, even if they are remitted to Malta.
        • Bank interest earned in Malta can be liable to withholding tax at 15%.
        • Long term residence permit holders are not entitled to benefit from the remittance basis of taxation and will be taxed on their worldwide income in Malta.

        Case Study

        Dixcart Malta provided advice to a UK citizen who was still living in the UK. An important benefit of the Key Employee Initiative is that it is possible to start the  process before the relevant individual has even arrived in Malta.

        This highly-skilled professional, in the ICT industry, secured his position at a Maltese employer and decided to relocate to the island once he received the ‘Approval in Principal Letter’, confirming that his application met all of the requirements and had been successful.

        After being provided with all of the essential documents, Dixcart Malta made the application, on behalf of the Employee and Employer and submitted all of the forms and evidence of experience, qualifications, and health insurance, to the Authorities. In addition, we even helped to find an apartment for the newcomer.

        After receiving a final decision, the KEI had 90 days to relocate to Malta.

        Another Set of Circumstances

        Dixcart Malta can also provide support services, relating to the Key Employee Initiative, for TCN Employees and local Employers. There may be situations where positions cannot be filled by the local labour market and where suitable TCNs can fulfil the job in the EU with a fast-track Malta work permit, rather than the company remain with vacant positions.

        Additional Information

        For further information on the Key Employee Initiative, please do not hesitate to contact Henno Kotze: advice.malta@dixcart.com at the Dixcart office, in Malta or your usual Dixcart contact.

        Dixcart Management Malta Limited Licence Number: AKM-DIXC-24

        New More Accessible Fast-Track Work Permit in Malta

        The Specialist Employee Initiative

        A new Fast-track work permit has been introduced in Malta called the Specialist Employee Initiative (SEI). This route is applicable to specialised employees that are not eligible for the Key Employee Initiative (KEI), but still hold the relevant academic, vocational or technical skills in line with their employment offer in Malta. Applications for SEIs are filed in accordance with the Single Permit Regulations.

        The introduction of the SEI demonstrates Malta’s commitment to attracting global talent, recognising the importance of simplifying application procedures for qualified foreign workers.

        Third-Country Nationals

        Third-Country Nationals (TCNs) require a single work permit to obtain residence and to be employed in Malta. This is because TCNs are not members of the EU or EFTA, and are therefore not able to move across borders, in the EU, without the proper documentation.

        However, highly skilled TCNs benefit from a fast-track work permit service under this Specialist Employee Initiative.

        Application Process

        The processing time for this type of application typically takes around 15 days, after submission of the complete list of required documents.

        The employer is required to email a completed application along with all necessary attachments in accordance with the relevant checklist. ‘Identitá’, the Government Agency overseeing this programme, will ask the applicant’s permission before submitting the application and supporting materials.

        Upon receiving approval, the application will be processed in accordance with set protocols. Both the company and the candidate will receive an informational email and an acknowledgement, along with additional instructions on how to pay the application fee during the biometrics stage.

        Any missing documents can result in delays or application rejection. It is important to ensure that all mandatory documents are submitted as per the checklist.

        Once a decision is made on the application, both the applicant and the employer are informed of the outcome via email.

        Eligibility and Requirements

        In order to be eligible to apply for the SEI application an individual must:

        • Have a signed contract with a Maltese company;
        • Have an annual gross salary of at least €25,000;
        • Be in possession of either
          • (i) an MQF level 6 or higher in an area directly related to the job offer or
          • (ii) skill qualifications together with a minimum of 3 years’ experience in a position which is directly related to the job offer.
        • Present previous employment contracts (signed by both employer and employee).
        • Provide their employment history, issued and officially certified (stamped or legalised) by the official employment authority in the country where the employment took place.
        • Reference letters by former employer/s. Reference letters must show the start and end dates and details of the work carried out. The letters should contain clear contact details of the referee including a valid email address, postal address and contact number.

        Typical documents needed with the application are:

        • Full copy of passport
        • CV
        • Declaration of Suitability
        • Lease Agreement & Housing Approval
        • Health Screening
        • Health Insurance

        Visa duration and conditions

        A residence permit will be granted to successful applicants for a period of one year. If the employee remains in compliance with the eligibility criteria and his/her employment contract applies to all periods of validity, this authorisation may be renewed for an additional period of up to three years.

        Tax Treatment

        • Tax is charged at progressive rates (capped at a maximum of 35%), on Malta sourced income and capital gains, and on foreign source income (excluding foreign source capital gains), that is remitted to Malta.
        • No tax is chargeable on foreign sourced income that is not remitted to Malta.
        • Capital gains are tax-exempt in Malta, even if they are remitted to Malta.
        • Bank interest earned in Malta can be liable to withholding tax at 15%.
        • Long-term residence permit holders are not eligible for the remittance basis of taxation and will be taxed on their worldwide income in Malta.

        Conclusion

        The introduction of this programme introduces an option for highly skilled third country nationals to obtain a work and residence permit in Malta, 15 days after the submission of the application and relevant documentation. Identitá have recognised the increased demand for such a work permit and this initiative will help improve processing time and efficiency.

        Additional Information

        For further information on the Specialist Employee Initiative, please do not hesitate to contact Henno Kotze: advice.malta@dixcart.com at the Dixcart office, in Malta or your usual Dixcart contact.

        Dixcart Management Malta Limited Licence Number: AKM-DIXC-24

        UK Non-Domiciled Individuals Seeking to Relocate to Cyprus

        Introduction

        Following the announcement in March 2024 from the UK’s Treasury Department, that the current UK non-domiciliation rules will cease to exist from 6 April 2025, many UK non-domiciled residents may start the decision process to relocate to tax efficient jurisdictions

        The Benefits of Cyprus

        • attractive tax incentives for individuals wishing to become Cyprus residents.
        • excellent education infrastructure
        • reasonable cost of living
        • high quality public and private health care services
        • advanced infrastructure of services
        • a warm and friendly community in which to live.
        • simple tax regime that is fully EU and OECD compliant
        • well drafted laws on Corporate and Commercial matters
        • easy access to international litigation and arbitration

        And last but not least, the excellent weather with beautiful surroundings and culture.

        Moving to Cyprus

        There are various options in terms of moving to Cyprus, as outlined below:

        EU non-domiciled UK residents moving to Cyprus.

        All nationals of the Member States of the European Union have the right to move freely within the European Union and to enter and reside in any EU Member State. This right to freedom of movement is guaranteed by article 21 of the treaty on the functioning of the EU (TFEU).

        EU and EEA Citizens entering Cyprus to work, stay or remain as visitors for more than 3 months on the island need to register for a residence permit for EU citizens. The registration certificate they get is commonly known as Yellow Slip.

        Third country non-domiciled UK residents moving to Cyprus.

        A. Moving to Cyprus, from the UK, as an Investor

        The recently revised Residency by Investment programme allows foreign nationals to obtain permanent residency by investing in a Cypriot property worth at least €300,000, plus VAT. Applicants must also have an annual income of at least €50,000 plus €15,000 for a spouse and €10,000 for each dependent child or family member included in the application.

        The applicant and his spouse/husband must certify that they do not intend to be employed in the Republic of Cyprus except for their employment as Directors in a Company in which they have chosen to invest within the framework of the policy, as detailed below.

        B. Living in Cyprus with a Temporary Residence Permit

        1. Establishment of a Foreign Interest Company.

        A Foreign Interest Company is an international company, which, subject to meeting specific criteria, can employ non-EU national employees in Cyprus. This programme enables employees and their families to gain residence and work permits under favourable terms.

        The Main Requirements Enabling an International Company to Qualify as Foreign Interest Company

        • The third country shareholder(s) must own more than 50% of the total share capital of the company.
        • There must be a minimum investment of €200,000 or €260,000 (depending on the circumstances) into Cyprus by the third country shareholder(s). This investment can be used later to fund future expenses incurred by the company when it is established in Cyprus.
        2. Acquiring a temporary residence permit as an employee at a Foreign Interest Company.

        Employees at Foreign Interest Companies and their family members can acquire temporary residence and work permits which are renewable.

        3. Temporary / Retirement / Self-Sufficiency Residence Permit

        The Cyprus Temporary Residence Permit is an annually renewable self-sufficiency visa that allows an individual and their qualifying dependants, to live in Cyprus as a visitor, without employment rights.

        The main qualification requirements are as follows:

        • Annual income, that is sourced from outside Cyprus, of a minimum of €24,000, which increases by 20% for a spouse and by 15% for each dependent child.
        • A title deed or rental agreement for a residential property in Cyprus that is for the sole use of the applicant and his/her family.
        • A certificate of ‘no criminal record’ and of not being under investigation for criminal offences, that is certified, by the relevant authorities of the applicant’s country of current residence.
        • Private medical insurance.
        • An original medical examination certificate to confirm that the applicant does not have certain medical conditions.

        It is essential that the holder of a Cyprus temporary residence permit should not stay outside of Cyprus for more than three months at a time, because this could result in the permit being cancelled.

        Additional Information

        For further information about the attractive tax regime for individuals in Cyprus please contact the Dixcart office in Cyprus: advice.cyprus@dixcart.com.


        Starter Kit for Indian Individuals Interested in a Portuguese Golden Visa Fund

        Understanding the Portuguese Golden Visa Fund

        The Portuguese Golden Visa Fund is an investment option that allows non-EU citizens, including Indians, to obtain a Portuguese residence permit. This residence permit provides visa-free travel within the Schengen Area, the right to live, work, and study in Portugal, and a path to Portuguese citizenship after five years.

        I thought that the Portuguese Golden Visa had Ended?

        Following a recent restructure of the programme, certain routes are no longer available, as finally voted on the 21 of September 2023. The new programme changes what types

        of investment qualify for the scheme; real estate and capital transfer investments are no longer eligible.

        What is a Collective Investment Entity (CIS)?

        A Collective Investment Entity (CIS) is a type of investment fund that pools money from multiple investors, to invest in a diversified portfolio of assets.

        To qualify for the golden visa, the CIS must be established under Portuguese legislation, with a length of maturity of at least five years, and with at least 60% of the value of the investments being made in commercial companies headquartered in the national territory of Portugal. A CIS is regulated by an independent body, which overseas such funds, and is known as the Portuguese Securities Market Commission (CMVM – Comissão do Mercado de Valores Mobiliários).

        Evaluating a Good Investment Entity

        When evaluating a CIS for the Portuguese Golden Visa, consider the following factors:

        • Track record: Choose a CIS with a proven track record of generating returns
        • Investment strategy: Understand the CIS’s investment strategy and ensure it aligns with your risk tolerance.
        • Fees: Compare the fees charged by different CIS’s.
        • Regulatory compliance: Verify that the CIS is fully compliant with Portuguese
        • regulations.
        • Management team and expertise: definitely consider experience to date.

        Examples of Investments Made by CISs

        CISs invest in a variety of asset classes, including private equity, where companies, with a mature profile or promising growth, are invested in. Specific examples include; operating hotels and resorts, solar project developments, annual crop yield improvement projects, farm development, amongst many examples. There is an investment for almost every interest!

        Tangibility and Risks of a CIS

        CISs are intangible assets, meaning they do not have a physical form. However, they represent ownership in a portfolio of tangible assets. Investing in a CIS involves risks, including:

        • Market risk: The value of a CIS investment can fluctuate with market conditions.
        • Credit risk: There is a risk that the companies or securities invested in, by the CIS, may default on their obligations.
        • Liquidity risk: There may be a delay in selling your investment in a CIS.

        Comparability to other EU Residency Programmes

        The Portuguese Golden Visa Fund offers several advantages when compared to  other EU residency programmes, including:

        • Lower investment requirement: The minimum investment for the Portuguese Golden Visa Fund is €500,000, which is lower than the investment requirements for many other EU passport programmes.
        • Flexibility of stay: You are only required to spend seven days per year in Portugal to maintain your residence permit.
        • At the end of five years of legal residency, you can apply for a Portuguese passport, which is not permitted in all of the other residency programmes available in the EU.

        Navigating Indian Exchange Control Issues

        Indian residents are subject to exchange control regulations that restrict the amount of foreign exchange they can transfer out of the country. Dixcart Portugal Lda has assisted many Indian clients with their investments in Portugal, and you are welcome to discuss such matters with us.

        Portugal – A preferred Route for Indian Nationals?

        According to the Portuguese Immigration Authorities, as of October 2023, a total of 1,234 Indian nationals have applied for the Portuguese Golden Visa. This represents almost 5% of all Golden Visa applications received to date!

        It is therefore not surprising that, there is a large and growing Indian community in Portugal.

        How to choose the right partner for your Portuguese Golden Visa?

        When selecting a partner to assist with your Portuguese Golden Visa, consider their; experience, reputation, communication, fees, location, and expertise in your investment type. Additionally, try to ensure that they are responsive, keep you updated, and can explain complex concepts clearly.

        Dixcart Portugal Lda: Your Experienced Partner for the Portuguese Golden Visa

        Dixcart Group has over 50 years of experience, with 35 years of experience in Portugal, working with private clients and advising corporates. We are headquartered in the UK and have a proven track record. We have clientele based all over the world – including a substantial client book of business from India.

        We have also been able to refer specific cases to the right legal team in instances  where biometrics have been lost, or other challenges have arisen, such as missed biometric appointments. These are special cases which require expertise and experience to manage successfully – which we have been able to achieve to date.

        Dixcart Portugal Lda were one of the first companies to coordinate and help manage golden visa applications, through introductions to Portuguese legal advisers, who have assisted many individuals and families to complete the programme and obtain a Portuguese passport. In addition, Dixcart Portugal Lda already have experience of the many changes that have been made to the programme over time, and have helped clients deal with these revisions.

        Contact Dixcart Portugal Lda Today to Learn More

        If you are an Indian individual interested in a Portuguese Golden Visa Fund, please contact Dixcart Portugal Lda today, to learn more about your options and how we can help you achieve your immigration goals and connect you with the right legal advisers: advice.portugal@dixcart.com

        Tax Efficiencies Available in Cyprus: Individuals and Corporates

        Why Cyprus?

        Cyprus is an appealing European jurisdiction, located in the eastern Mediterranean Sea offering a warm climate, attractive beaches and the perfect balance of cosmopolitan living and rural villages. Strategically located at the crossroads of three continents, Cyprus is accessible from Europe, Asia and Africa. Nicosia is the centrally located capital of the Republic of Cyprus however, the growing financial hub is Limassol on the southern coast. The official language is Greek, with English also being widely spoken. Cyprus offers a palette of both corporate and personal tax incentives for expatriates and high net worth individuals relocating to Cyprus. Cyprus has a favourable business environment and, as a result, has become an attractive an international business hub.

        Are you looking to relocate your business and/ or start a new business in Cyprus? Maybe you’re considering setting up a holding company or restructuring the fiscal position of a family office structure? If you are, please consider the below information and become convinced of a great way to optimize your business structure We will start by looking at the tax benefits available to individuals and to corporates.

        Tax Benefits Available to Individuals

        What are the Advantages of Becoming Cyprus Tax Resident?

        Cyprus non-domicile status can be an effective means to optimise personal wealth planning. The advantages of becoming Cyprus tax resident, an option for individuals not previously tax resident in Cyprus, include the following:

        1. Non-Domicile Status

        The non-domicile tax regime is particularly interesting for individuals whose main source of income is either dividend or interest income, as these sources of income are not taxed in Cyprus.

        Individuals can also take advantage of the exemption from taxation of capital gains, other than on the sale of immoveable property in Cyprus.

        In addition, there is an exemption from taxation on capital sums received from pensions, provident and insurance funds as well as several other tax advantages, including; a low rate of tax on foreign pension income, and no wealth or inheritance taxes in Cyprus.

        The zero tax benefits, mentioned above, are enjoyed even if the income has a Cyprus source and/or is remitted to Cyprus.

        1. Employment Income Tax Exemption

        New incentives for first employment in Cyprus

        The 50% exemption:

        As from 1 January 2022, 50% of the remuneration of employees whose first employment in Cyprus began on, or after, 1 January 2022 is exempt from income tax for a period of 17 years, provided that their annual remuneration exceeds €55,000 (previous threshold €100,000), and the employees were not residents of Cyprus for a period of, at least, 15 consecutive years before the commencement of their employment in Cyprus.

        In cases where in a tax year the relevant conditions are not satisfied (e.g., annual remuneration is less than €55,000) the above-stated exemption will not be granted for that specific tax year. This exemption is available for a period of up to 17 years.

        The 20% exemption:

        Individuals whose first employment in Cyprus began after 26 July 2022 and earn less than €55,000 are eligible for a 20%, or €8,550 exemption (whichever is lower) from their employment income, for a maximum period of 7 years provided that the employees were not residents of Cyprus for a period of, at least, 3 consecutive years before the commencement of their employment in Cyprus.

        This exemption can be claimed from the year following the year of commencement of employment in Cyprus.

        1. Tax Exemption on Income from Employment Outside Cyprus

        Individuals who are employed outside of Cyprus, for more than 90 days in aggregate in a tax year, by a non-Cyprus tax resident employer or foreign permanent establishment of a Cyprus tax resident employer, are exempt from income tax on this income.

        Tax Benefits Available to Companies

        1. Corporate Tax Rate

        Cypriot companies enjoy a 12.5% rate of tax on trading, and a zero rate of capital gains tax.

        1. NID

        NID is deducted from taxable income. It cannot exceed 80% of the taxable income, as calculated prior to the NID, arising from the new equity.

        A company could achieve an effective tax rate as low as 2.50% (corporate tax rate 12.50% x 20%). Please contact the Dixcart office in Cyprus for further information: advice.cyprus@dixcart.com

        1. Increased Tax Deduction for Research and Development Expenses

         Eligible research and development expenses can be deducted from taxable income equivalent to 120% of the actual spend.

        Additional Information

        For further information about the attractive tax regimes available to individuals and companies in Cyprus, please contact the Dixcart office in Cyprus: advice.cyprus@dixcart.com.