The Ultimate Guide to Relocating to Switzerland

Switzerland, with its snow-capped peaks, pristine lakes, and efficient infrastructure, has long been a dream destination for many individuals seeking a balance between a high-quality lifestyle and professional opportunities. As one of the most prosperous and picturesque countries in Europe, it also attracts individuals due to its strong economy, political stability, and exceptional living standards. If you are considering making Switzerland your new home, here’s the ultimate guide to navigating the logistics of working and living in this alpine haven.

You may find also find this Dixcart Swiss Article of interest to read: Switzerland – Could this be your Next Move? – Dixcart

Relocating Logistics

Visa and Residency

Before planning your move, it is essential to understand Switzerland’s visa and residency requirements. Depending on your nationality and purpose of stay, you might need to obtain a visa or a residence permit. Ensuring you have the necessary paperwork in order, will smooth the transition process.

Accommodation

Switzerland boasts a diverse housing market, from urban apartments to picturesque countryside chalets. Local real estate agents and online platforms can help you find the perfect place to call home.

Healthcare System

Switzerland is renowned for its excellent healthcare system, which is often ranked among the best in the world. Familiarise yourself with the country’s health insurance requirements and the different insurance providers available, to ensure that you and your family have comprehensive coverage.

Working in Switzerland

Job Market

Switzerland is home to a thriving economy, particularly in sectors such as finance, pharmaceuticals, and technology. Understanding the job market, networking with professionals in your field, and researching employment opportunities will increase your chances of finding a fulfilling career.

This Dixcart Article includes a useful section regarding working in Switzerland: How Can I Relocate to Switzerland and What Help is Available? – Dixcart

Work Culture

Swiss work culture is known for its punctuality, precision, and strong work ethic. It’s crucial to familiarise yourself with the local customs and etiquette, including the importance of maintaining professionalism and respecting hierarchical structures within the workplace.

Taxes and Finance

Switzerland has a well-established tax system, but it can be complex for newcomers. Educate yourself on the tax regulations and financial planning to ensure compliance and make the most of the various benefits offered to residents.

It is worth seeking professional advice and the Dixcart office in Switzerland can help guide you regarding the various taxes: advice.switzerland@dixcart.com

Living in Switzerland

Cultural Immersion

Embrace the Swiss way of life by participating in local cultural activities, festivals, and events. Learning one of the country’s official languages—German, French, Italian, or Romansh can also help you integrate more seamlessly into the community.

Outdoor Lifestyle

Switzerland’s breathtaking natural landscapes offer an abundance of outdoor activities, from skiing and snowboarding in the winter to hiking and swimming in the summer. Embrace the Swiss passion for nature and adventure by exploring the country’s extensive network of hiking trails and ski resorts.

Community Engagement

Swiss communities value active participation and engagement. Get involved in local community initiatives, clubs, or volunteer organisations to build meaningful connections and foster a sense of belonging in your new surroundings.

For Expert Assistance, Reach Out to advice.switzerland@dixcart.com

Relocating to Switzerland can be a rewarding and enriching experience, but it requires thorough preparation and a comprehensive understanding of the country’s customs, laws, and lifestyle.

For personalised guidance and professional support in navigating the intricacies of the relocation process, reach out to our expert advisers at advice.switzerland@dixcart.com. Our team at Dixcart Switzerland is dedicated to ensuring a seamless transition and helping you make the most of your Swiss adventure.

Malta

Moving to Malta – Using the Isle of Man to Structure Your Assets Efficiently

Located in the heart of the Mediterranean, between the north of Africa and southern Europe, Malta is a modern international commercial hub with a global draw.

Malta boasts a diverse economy with well-developed Financial Services, Fintech, Science and Technology, eGaming, Maritime Services and Aviation sectors. Additionally, the island offers extensive Residency routes available, Schengen area status, fantastic travel links and potentially beneficial tax regime. For these reasons and many more, Malta is a destination of choice for wealthy families, entrepreneurs and businesses around the world. 

Malta offers people relocating to her shores a very attractive Non-Domicile regime that provides individuals with a great deal of flexibility when it comes to structuring their financial matters – this is precisely where the Isle of Man can offer clients a platform for optimising their wealth.

In this article we take a brief look at how Dixcart can assist with moving to Malta and how those individuals can utilise the Isle of Man to protect and grow generational wealth, covering:

  1. How to Become a Maltese Tax Resident?
  2. What are the Tax Rules of the Maltese Non-Domicile regime?
  3. How Maltese Non-Domicile Individuals Utilise the Isle of Man for Wealth Planning?
  4. How Dixcart can Support your Move to Malta & Wealth Planning Goals

1. How to Become a Maltese Tax Resident?

There are two distinct groups of people when we consider the method of becoming Malta Tax Resident – these are 1) EU / EEA / Swiss Nationals, and 2) Third Country Nationals. Importantly, for the purposes of this article, where either type of individual does not intend to remain in Malta permanently and has no substantial connection to Malta, both groups may be deemed a Tax Resident Non-Domiciled individual. There are also compelling Residency Programmes available to each group which offer the same benefits and broadly have the same requirements.

Malta is a member of the European Union (EU) and European Economic Area (EEA). As such, EU / EEA Nationals can live, work and study in Malta indefinitely without a Visa or Work Permit. Swiss Nationals also enjoy this right. These individuals can apply for the Residence Programme via an Authorised Registered Mandatory, such as Dixcart Malta. The Residence Programme offers a special tax status to successful applicants who meet the requirements.

Third Country Nationals will be required to take part in a programme such as the Global Residence Programme or successful applicants also gain a special tax status and are granted a residence permit which also extends to their dependents, including spouses and children. The special tax status received under either programme entitles the individual to a beneficial flat rate of 15% on foreign source income remitted to Malta, with the possibility of claiming double taxation relief where an appropriate Double Tax Treaty is in place. Income that arises in Malta is taxed at a flat rate of 35%. The beneficial rate is subject to a minimum yearly tax contribution of €15,000.

The Malta Residency Programme and Global Residence Programme requirements include:

  • Applicants must pay a one-time non-refundable registration fee of €6,000 to the Maltese Government. This is reduced to €5,500 where the Qualifying Property Holding is purchased in Gozo or the South of Malta.
  • Not have benefitted from a number of previous or existing Malta regimes.
  • Evidence of a Lease Agreement and Rental Declaration, or Purchase Agreement relevant to a Qualifying Property Holding. A Qualifying Property Holding requires a minimum investment in a Maltese property of €275,000, or €220,000 if the property is in Gozo or the South of the island. In the instance of a Rental Agreement, rent must cost not less than €9,600 per annum, or €8,750 if the property is in Gozo or the South of the island. The property cannot be let or sub-let.
  • Evidence of self-sufficient means of subsistence (e.g. bank statements, pension, secure bonds, etc).
  • Posses a valid travel document.
  • Evidence of comprehensive health insurance OR Certificate of Entitlement issued by the Entitlement Unit. Must provide cover within the EU for the applicant and all dependents.
  • Be proficient in one of Malta’s official languages (English is an official language of Malta).
  • Applicants and dependents over 18 years of age must satisfy the fit and proper person requirements.
  • Submit an Annual Return – with any material changes that affect the beneficiary’s special tax status.
  • Not spend more than 183 days in any other jurisdiction, in any single calendar year.

2. What are the Tax Rules of the Maltese Non-Domicile regime?

Liability to Maltese Income Tax arises in three forms, dependent on the Tax Residency and Domicile status of the individual – these are on a Worldwide, Remittance or Territorial basis.

Ordinary Residents of Malta who are Tax Resident and Domiciled are taxed on their worldwide assets; meaning that all Income and Capital Gains are subject to Maltese taxation regardless of where they arise or are received. This also applies to persons who hold the status of Long-term Resident or are in possession of a Permanent Residence Certificate or a Permanent Residence Card.

Maltese Ordinary Residency status is determined by a question of fact, relating to the length of stay along with personal and economic ties. Factors which the authorities will consider, include:

  1. Permanent or Indefinite Basis: Individuals living in Malta permanently or for an indefinite period are typically considered ordinarily resident.
  2. 183 Day Requirement: If an individual stays in Malta for more than 183 days in a single year they may be deemed Ordinary Resident.
  3. Regularity of Stays: Persons who do not meet the 183-day requirement, but who regularly visit over a long period of time e.g. over 3 years, can also be considered Ordinarily Resident.
  4. Personal and Economic Ties: Establishing personal and economic ties in Malta is a significant factor in determining Ordinary Residency e.g. purchasing a family home etc.

The Maltese authorities do not define Domicile by nationality, but where the individual considers their permanent Home i.e. where the person ‘belongs’, which implies more significant ties than Residency alone. This can be the individuals Domicile of Origin i.e. normally the Domicile of their parents, regardless of the country where the individual is born. An individual may acquire a Domicile of Choice if they take up Residence in a country with the intention of making it their permanent home. However, they do not acquire Domicile status if they intend to return to their country of Domicile or resettle in another someday, even where the period is long or indefinite. No person can be without a Domicile, and no person can have more than one Domicile at the same time.

A person that is an Ordinary Resident but not Domiciled in Malta is taxed under the Remittance Basis, and therefore:

  • All income arising in Malta is subject to tax, regardless of where it is received.
  • Income arising outside Malta is subject to Maltese tax only if and to the extent that it is received in Malta.
  • Capital gains arising outside Malta are not subject to tax, even if they are received in Malta.

Individuals taxed under the Remittance Basis are subject to the special rule providing for a minimum tax liability of €5,000 per annum (this minimum tax is different to the Global and Residence program which is 15%).

Unlike many equivalent Non-Domicile regimes, an individual can remain Non-Domiciled in Malta indefinitely.

This means that where the Tax Resident Non-Domiciled individual can show that monies received in Malta originate from assets held abroad as capital e.g. inheritance, proceeds from the sale of capital assets etc. they will be regarded as remittances of capital and will not suffer Maltese tax.

Dixcart Malta are equipped to provide Tax Advice regarding Maltese taxation and the Maltese Non-Domicile regime. If you would like to discuss how the regime works and any opportunities relevant to your circumstances, please get in touch with Jonathan Vassallo at Dixcart Malta.

3. How Maltese Non-Domicile Individuals Utilise the Isle of Man for Wealth Planning?

The Isle of Man is globally recognised as an international financial centre of excellence, boasting a sophisticated legal and regulatory system, a developed professional services industry and a long running heritage in Private Client and Corporate planning.

The Isle of Man was named ‘Best International Financial Centre’ at the prestigious International Investment Awards 2023, beating off stiff competition from Jersey and Guernsey.

The island is a self-governing Crown Dependency which makes its own laws. The Statute book and Case Law is modern and business friendly yet enduring, with a wide array of corporate entities and Trusts available. The jurisdiction is also politically agnostic and therefore clients can take comfort from the stability and reliability offered.

The island also sets its own tax regime and offers headline rates which include:

  • 0% Corporate Tax
  • 0% Capital Gains Tax
  • 0% Inheritance Tax
  • 0% Withholding Tax on Dividends
  • Isle of Man companies are able to register for VAT, and businesses in the Isle of Man fall under the UK’s VAT regime.

Owing to the attractive neutral tax regime, Non-Domiciled individuals seeking to live and work in Malta can potentially structure their non-Maltese assets in such a way that facilitates optimal growth via a potential nil rate in the Isle of Man, remitting withdrawals of capital to Malta free from Maltese taxation. Jonathan Vassallo at Dixcart Malta can provide certainty regarding the Maltese tax treatment of your potential Isle of Man structuring in this regard.

Taxation is a complex area and professional Tax Advice should always be sought before establishing any offshore structure.

4. How Dixcart can Support your Move to Malta & Wealth Planning Goals

After more than 50 years, the Dixcart Group remains proudly privately owned by the same family. the Group consists of 10 offices in 9 jurisdictions across the globe, including both Malta and the Isle of Man. Dixcart are very well positioned to assist clients and their advisers who are considering moving to Malta and seeking to structure their non-Maltese assets, or participation within a Maltese business, in a tax efficient manner via an Isle of Man structure.

Dixcart Malta are experts in all Residency programmes available and are Licensed to act as Authorised Registered Mandatory for clients wishing to apply for either the Malta Residence Programme for EU / EEA / Swiss Nationals, or the Malta Global Citizenship Programme for Third Country Nationals. Further, Dixcart Malta can provide Tax Advice for those looking to take advantage of the very beneficial Non-Domicile regime within Malta.

Dixcart Isle of Man are a Licensed and Regulated Trust and Corporate Services Provider that has developed an extensive range of services over its 30+ years of operation. Our team on the Isle of Man consists of professionally qualified experts and senior employees who possess a wealth of experience. This means that our Isle of Man office can support your corporate and/or Trust planning, at every stage.

Get in Touch

If you would like to discuss how our Dixcart can support your plans regarding Malta and the Isle of Man, please feel free to get in touch with Nathan Hellmann of Dixcart Malta or David Walsh of Dixcart Isle of Man via:

Dixcart Malta: advice.malta@dixcart.com

Alternatively, you can connect with Nathan Hellmann on Linkedin.

Dixcart Isle of Man: advice.iom@dixcart.com

Alternatively, you can connect with David Walsh on Linkedin.

Dixcart Management (IOM) Limited is Licensed by the Isle of Man Financial Services Authority

Dixcart Management Malta Limited Licence Number: AKM-DIXC-23

Which Portuguese Visa Option is Your Key to the Perfect European Adventure?

Choosing the right visa requires more than a quick chat and good cup of coffee to decide what is best for you, and getting in touch with the right person is the most important step.

To get you off to the right start, we have put together details of differences regarding some of Portugal’s most popular visas, to help you choose Portugal as a destination to live, work and play.

 GOLDEN VISAD2 VISAD7 VISADIGITAL NOMAD VISA
EligibilityNon-EU/EEA National
Time to GetAlmost 2 years5 to 8 months
Eligibility for the VisaInvestment under the Portuguese lawIncorporating a company or independent activityPassive income, such as pensions, or dividendsWork contract or service provision contract
Investment RequiredFrom €200,000Incorporation of a companyN/A  
Specific RequirementsInvestmentInvestment activityPassive income of at least the amount of the minimum wageSalary of at least 3x the minimum wage over the last 3 months (average)
Minimum Stay Requirements7 days per yearNot being absent from the country for more than 6 months in a row or 8 months over 24
CitizenshipAfter 5 years of legal residency
Travel BenefitsVisa-free entry to the Schengen Area
Tax ImplicationsDependsTax resident – taxed on a worldwide income basis; Possibility to apply for the Non-Habitual Resident Regime

Reach out to Dixcart for more information – advice.portugal@dixcart.com.

Malta

The Benefits of Malta’s Highly Qualified Persons Programme

Malta, a charming Mediterranean island nation, has become increasingly popular among expatriates and professionals seeking to relocate to a vibrant, culturally rich, and economically stable country.

One of the key factors driving this interest is the Highly Qualified Persons Programme (HQP), introduced by the Maltese government to attract talented individuals and strengthen its economy. This programme offers a range of benefits to eligible applicants, making it an attractive option for highly qualified individuals from around the world.

What is the Criteria?

In order to be eligible for the HQP programme, you would need comply with the following rules below:

  1. Eligible Employment:  An individual must be employed in an eligible office with a company that is licensed, and/or recognised by the Competent Authority regulating the specific sector.  Qualifying roles typically include positions in fields such as; finance, gaming, aviation, and other sectors that are in high demand in Malta.
  2. Minimum Qualifications and Salary: You should possess specific qualifications and skills that are relevant to your profession. Additionally, your annual gross salary should meet a minimum threshold, which may vary depending on the specific eligibility criteria at the time of your application. As of October 2023, the minimum salary requirement is €93,669 for the basis year 2023.
  3. Health Insurance: You are required to have valid health insurance that covers you and any accompanying dependents.
  4. Residential Property: HQP applicants are usually required to either purchase (only available for EU Nationals), or rent a qualifying property in Malta, which serves as their primary residence.
  5. Clean Criminal Record: Applicants and their dependents should not have any criminal convictions.
  6. Genuine Link to Malta: You should establish a genuine link to Malta, which may include having a physical presence in Malta and being an active part of the community.
  7. Application Fees: Applicants need to be prepared to pay the necessary application and processing fees when applying for the programme.

What are the Benefits?

Tax Incentives

The HQP program is well-known for its attractive tax incentives, which are among the most compelling benefits for applicants. Successful candidates can enjoy a flat tax rate of 15% on their Malta-source income, provided it meets the eligibility criteria. Income exceeding €5,000,000 is exempt from income tax in Malta.

The Malta tax benefits under this scheme apply to EEA and Swiss nationals for a maximum consecutive period of 5 years, preceding the first year of assessment and to third country nationals for a maximum consecutive period of 4 years.

EEA/Swiss nationals who take advantage of this tax benefit shall be eligible, upon application, for a two-time extension of 5 years, making the qualifying period a maximum of 15 years of assessment and offering significant savings compared to other countries, with higher income tax rates.

Third country nationals may extend their programme twice by another 4 years, bringing their maximum time in Malta to 12 years.

The tax benefits make Malta particularly appealing for high-earning professionals and entrepreneurs who want to optimise their financial planning.

Diverse Business Opportunities

The HQP programme is limited to specific industries, including; Financial Services , Research & Development, Gaming, and Aviation and Oil and Gas. Malta has established itself as a hub for various industries, offering ample opportunities for entrepreneurs and skilled professionals. The Government is keen to attract foreign investment, leading to a business-friendly environment that promotes innovation and growth.

Education Opportunities

The HQP programme offers access to Malta’s high-quality education system. International schools in Malta provide an excellent education for expatriate children, often following international curricula. In addition, Malta’s two universities, the University of Malta and the Malta College of Arts, Science and Technology, offer a wide range of programmes and research opportunities, making it an excellent destination for those seeking advanced academic degrees.

Quality of Life in Malta

Malta offers an exceptional quality of life. Its pleasant Mediterranean climate, picturesque landscapes, and a rich cultural heritage, make it an ideal place to live and work. The country boasts a strong sense of community, a safe environment, and a high standard of healthcare and education. Furthermore, Malta’s strategic location makes it an excellent hub for travel and exploration of the broader European region.

Malta’s historical and cultural heritage is one of its most distinctive features. The island is home to numerous UNESCO World Heritage Sites, including the ancient city of Valletta. Its vibrant arts scene, diverse festivals, and cuisine, attracts individuals looking for a rich cultural experience. Malta’s multicultural society also welcomes people from various backgrounds, creating a dynamic and inclusive environment.

Conclusion

The Highly Qualified Persons Programme in Malta is a remarkable opportunity for highly skilled professionals and their families to move to a Mediterranean island.

With its enticing tax incentives, EU membership, diverse business opportunities, and an exceptional quality of life, Malta has become a top destination for those looking to enhance their personal and professional lives.

The programme’s inclusivity, and the rich sunny weather on offer, also make Malta an appealing choice for those seeking a new place to call home while advancing their careers and quality of life.

How Dixcart can help?

As a Licensed Residency Agent, Dixcart can assist in the submission and management of the HQP application, and ensure a smooth and steam lined process, making it as straight forward as possible.

For further information about the benefits of the HQP, please contact Henno Kotze or Nathan Hellmann, at the Dixcart office in Malta: advice.malta@dixcart.com.

Alternatively, please speak to your usual Dixcart contact.

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

Programmes to Move to or Become Tax Resident in Cyprus

Background

Numerous tax advantages exist in Cyprus, for companies and previously non-Cypriot resident individuals. Please see Article:  Tax Efficiencies Available in Cyprus: Individuals and Corporates.

Individuals

Individuals can move to Cyprus, to take advantage of the tax efficiencies available, by spending at least 183 days in Cyprus without additional conditions.

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 ‘60 Day Tax Residency Rule’ might be of interest

1. The “60 Day” Tax Residency Rule 

Since the implementation of the 60-day tax residency rule, a number of individuals have relocated to Cyprus to take advantage of the various tax benefits that are available.

Criteria to Meet the “60 Day” Tax Residency Rule

The “60 day” tax residency rule applies to individuals who in the relevant tax year:

  • reside in Cyprus for at least 60 days.
  • operate/run a business in Cyprus and/or are employed in Cyprus and/or are a director of a company which is tax resident in Cyprus. Individuals must also have a residential property in Cyprus which they own or rent.
  • are not tax resident in any other country.
  • do not reside in any other single country for a period exceeding 183 days in aggregate.

Days Spent In and Out of Cyprus

For the purpose of the rule, days “in” and “out” of Cyprus are defined as:

  • the day of departure from Cyprus counts as a day out of Cyprus.
  • the day of arrival in Cyprus counts as a day in Cyprus.
  • arrival in Cyprus and departure on the same day counts as a day in Cyprus.
  • departure from Cyprus followed by a return on the same day counts as a day out of Cyprus.

Please note that for the majority of jurisdictions you do not become tax resident if you reside there for less than 183 days a year. In certain jurisdictions, however, the number of days to be considered tax resident, is fewer than this. Professional advice should be taken.

2.  Starting a Business in Cyprus as a Means of Relocation for Non-EU Nationals

Cyprus is an attractive jurisdiction for trading and holding companies, with access to all EU directives and an extensive network of double tax treaties.

To encourage new business to the island, Cyprus offers two temporary visa routes as a means for individuals to live and work in Cyprus:

  • Establishing a Cyprus Foreign Investment Company (FIC)

Individuals can establish an international company which can employ non-EU nationals in Cyprus. Such a company can obtain work permits for relevant employees, and residence permits for them and their family members. A key advantage is that after seven years, non-EU nationals can apply for Cyprus Citizenship.

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

This scheme allows entrepreneurs, individuals and/or teams of people, from countries outside the EU and outside the EEA, to enter, reside and work in Cyprus. They must establish, operate, and develop a start-up business, in Cyprus. This visa is available for one year, with the option to renew for another year.

3. The Permanent Residence Permit

Individuals wishing to move to Cyprus can apply for a Permanent Residence Permit which is useful as a means to ease travel to EU countries and organise business activities in Europe.

Applicants must make an investment of at least €300,000 in one of the investment categories required under the programme, and prove they have an annual income of at least 50,000 (which can be from pensions, overseas employment, interest on fixed deposits, or rental income from abroad). If the holder of a Permanent Residence Permit resides in Cyprus, this may make them eligible for Cyprus citizenship by naturalisation.

4. Digital Nomad visa: non-EU nationals who are self-employed, salaried, or working on a freelance basis can apply for the right to live and work from Cyprus remotely.

Applicants must work remotely using information technology and communicate remotely with clients and employers outside Cyprus.

A Digital Nomad has the right to stay in Cyprus for a period of up to one year, with the right to renew for another two years. During the stay in Cyprus the spouse or partner and any minor family members, cannot provide independent work or engage in any kind of employment activity in the country. If they reside in Cyprus for over 183 days in the same tax year, then they are considered to be tax residents of Cyprus.

Each digital nomad must have; a salary of at least €3,500 per month, medical cover and a clean criminal record from their country of residence.

Currently the cap of the total amount of allowed applications has been reached and therefore this programme is currently unavailable.

  1. Application for Cypriot Citizenship

The option is available to apply for Cypriot citizenship after a period of five years of residence and work within the Republic of Cyprus.

Additional Information

For further information about the attractive tax regime for individuals in Cyprus, and the visa options available, please contact Katrien de Poorter at the Dixcart office in Cyprus: advice.cyprus@dixcart.com.

Cyprus

Tax Incentives for Expatriates

Background

Cyprus has uniquely positioned itself as a tax jurisdiction of choice for individuals. Various positive aspects of Cyprus Income tax legislation are available to individuals seeking a flexible and attractive tax regime.

What makes Cyprus a jurisdiction of choice for individuals is the non-domicile tax Regime which allows qualifying individuals to receive dividend and interest income exempt of income tax.  In addition, individuals relocating to the island for the first time can benefit from reduced taxation on their employment income.

Day traders or individuals holding and managing their own investment portfolio can benefit extensively from the exemption of capital gains on the sale of equities.

The 60-day tax rule lends itself well for highly mobile individuals who travel extensively for work purposes and are not tied to one particular place of residence.

The tax benefits are further extended to individuals looking for a place to retire to.

Income Tax Reduction on Employment Income

On the 26th July 2022 the long-anticipated tax incentives for individuals were implemented. As per the new provisions of the income tax legislation, a 50% exemption for income in relation to first employment in Cyprus is now available for individuals with annual remuneration in excess of €55,000 (previous threshold EUR 100.000). This exemption will be available for a period of 17 years.

Cyprus Tax Residency in 60 Days

An individual can become Cyprus tax resident in 60 days. This rule is applicable to individuals who do not spend more than 183 days in Cyprus or in any other jurisdiction.

The “60 day rule” applies to individuals who in the relevant tax year reside in Cyprus for at least 60 days, operate/run a business in Cyprus and/or are employed in Cyprus and/or are a director of a company which is tax resident in Cyprus.

Individuals must also have a residential property in Cyprus which they own or rent and not be tax resident in any other country. The individual must not reside in any other single country for a period exceeding 183 days in aggregate.

Non-domicile Status

Individuals can acquire Cyprus tax residency after having complied with spending either 183 days or 60 days in Cyprus. Please contact the Dixcart office in Cyprus for further details about these two alternatives: advice.cyprus@dixcart.com

The Non-domicile tax regime is particularly interesting for individuals whose main source of income is either dividend income or Interest Income. In addition individuals can take advantage of the exemption of taxation on capital gains.

UK nationals and Other Non-EU Resident Applicants

Due to Brexit, UK nationals are now considered as non-EU nationals and therefore need to follow the same application procedure as other non-EU nationals:

Non-EU nationals and the Permanent Residence through Investment Programme

In order to acquire a Permanent Residence Permit the non-EU national needs to make an investment of at least €300,000, (excluding VAT) in one of the following investment categories: residential real estate, other types of real estate such as offices, shops, hotels or investment in the share capital of a Cyprus company, or in units of a Cyprus Investment Organization of Collective Investments (type AIF, AIFLNP, RAIF). In addition, evidence of a secure annual income of at least €50,000 must be provided. This required annual income, increases by €15,000 for the spouse and €10,000 for every minor child.

  • Non-EU Nationals and Temporary Residence through 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 a Foreign Interest Company are all third country shareholder(s) must own more than 50% of the total share capital of the company, and there must be a minimum investment of €200.000 into Cyprus by these third country shareholder(s). This investment can be used at a later date, to fund future expenses incurred by the company when it is established in Cyprus.

  • Temporary residence on a visitor basis without the right to undertake any form of employment.

Non-EU nationals can acquire a temporary residence permit based on a visitor visa, which can be renewed for a period of up to 10 years.

This type of residence does not allow the undertaking of any form of employment.

This basis of residence is most suitable for pensioners wishing to establish themselves in Cyprus and enjoy the advantageous tax regime applicable to foreign pensions. Please contact the Dixcart office in Cyprus for more details: advice.cyprus@dixcart.com.

Additional Information

For additional information about the attractive tax regime for individuals in Cyprus, please contact: Katrien De Poorter at the Dixcart office in Cyprus: advice.cyprus@dixcart.com.

New Portuguese Golden Visa Legislation Voted In

Announcement

On 21 September 2023, the Portuguese Parliament voted on the final version of the new Portuguese Golden Visa legislation.

The programme will continue for a number of non-real estate investments, but there are some major changes.

Existing Holders of Golden Visas and Pending Applications

For investors who already have Golden Visas or who have pending applications, the new legislation provides clarity.

Pending applications will be converted into Entrepreneur Permits (D2 Visas). The minimum stay requirements and the validity period of the new residency permits will remain the same.

Five years of legal residency under the D2 Visa will still grant the right to apply for Portuguese citizenship.

What Happens Next?

The new law is now in the President’s hands.

He has 20 days to decide whether to ratify the legislation or return it to Parliament for amendments. It is not possible to say when the new law will enter into force, but it is likely to happen soon.

What Will the Criteria Be for New Investors?

For future investors, the new legislation brings some new opportunities.

The following investments will each qualify for the Golden Visa:

  • Capital transfer of a minimum €500,000, for the acquisition of shares in a non-real estate collective investment entity, incorporated under Portuguese law. At the time of the investment, maturity must be at least five years in the future, and at least 60% of the value must be invested in commercial companies with headquarters in Portugal; OR
  • The creation of ten jobs; OR
  • Capital transfer of a minimum €500,000 for research activities, carried out by private or public scientific research institutions, integrated in the national scientific and technological system; OR
  • Capital transfer of a minimum €250,000 for investment in supporting artistic productions, reflecting the national cultural heritage. Such an investment can be, through; central and/or peripheral direct administration services, public institutes, entities that integrate the business and public sector, public foundations, private foundations with public utility status, inter-municipal entities, entities that are part of the local business sector, municipal associative entities and public cultural associations; OR
  • Capital transfer of a minimum €500,000 for the incorporation of a commercial company, with headquarters in Portugal, combined with the creation of five permanent jobs. Alternatively, a minimum €500,000 can be added to the capital of an existing commercial company, with headquarters in Portugal. This must be combined with the creation of at least five permanent jobs, or the maintenance of at least ten jobs, with a minimum five permanent employees, for a minimum period of three years.

Summary

The new legislation provides some clarity for investors, with further details still awaited. Specifically, the Portuguese Government needs to amend the regulations to explain how the new law will be applied.

Additional Information

If you would like additional information or advice as to what action you should take, please reach out to our offices in Portugal (Lisbon and Madeira) for assistance: advice.portugal@dixcart.com.

What are the Tax Efficiencies Available in Cyprus for Individuals and Corporates?

Background

Cyprus is a hidden European gem in terms of the opportunities and benefits available to individuals and corporates, moving there on a permanent basis and/or establishing residency through the ’60 Day Tax Residency Rules’.

EU and Non-EU Individuals

For non-EU nationals there are various programmes for individuals to enable them to move to Cyprus, with one option being to establish a company in Cyprus. EU nationals are free to move to Cyprus, as Cyprus is in the EU.

The 60 Day Tax Residency Rule’ is  a route for EU and non-EU nationals, to optimise the tax efficiencies available from Cyprus, without needing to reside there more than 60 days a year.

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

There is a 50% exemption from taxation, for income for ‘first time’ employment in Cyprus, for individuals with an annual remuneration income of over €55,000.

This exemption is available for a period of  up to 17 years.

  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. In addition, Cyprus tax resident companies and Cyprus permanent establishments (PEs) of non-Cyprus tax resident companies, are entitled to a Notional Interest Deduction (NID), on the injection of new equity used to generate taxable income.

  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.

Starting a Business in Cyprus as a Means of Relocation for Non-EU Nationals

Cyprus is an attractive jurisdiction for trading and holding companies and offers a number of tax incentives, as detailed above.

To encourage new business to the island, Cyprus offers two temporary visa routes as a means for individuals to live and work in Cyprus:

  1. Establishing a Cyprus Foreign Investment Company (FIC)

Individuals can establish an international company which can employ non-EU nationals in Cyprus. Such a company can obtain work permits for relevant employees, and residence permits for them and their family members. A key advantage is that after seven years, third country nationals can apply for Cyprus Citizenship.

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

This scheme allows entrepreneurs, individuals and/or teams of people, from countries outside the EU and outside the EEA, to enter, reside and work in Cyprus. They must

establish, operate, and develop a start-up business, in Cyprus. This visa is available for one year, with the option to renew for another year.

Please see the Dixcart Article: Programmes to Move to or Become Tax Resident in Cyprus.

Additional Information

For further information about the attractive tax regimes available to individuals and companies in Cyprus, please contact Robert Homem or Katrien de Poorter at the Dixcart office in Cyprus: advice.cyprus@dixcart.com

 

Cyprus - beach with rock formations

Amendments to the Cyprus Permanent Residence Programme

In May 2023, Cyprus made a number of amendments to the Cyprus Permanent Residence Programme (PRP) with regards to; the secure annual income of the applicant, the criteria for eligible dependant family members, and requirements in relation to the property (permanent residence) of the applying family. In addition, ongoing obligations have been added in terms of maintaining the investment, following its approval.

As a reminder, we list here the various investment options that are available to acquire Permanent Residence in Cyprus.

Investment Options Available:

A. Purchase residential real estate worth at least €300,000 (+VAT) from a development company.

OR

B. Investment in real estate (excluding houses/apartments): Purchase of other types of real estate such as offices, shops, hotels or related estate developments or a combination of these with a total value of €300,000. The purchase of interest can be the result of a resale.

OR

C. Investment in the share capital of a Cyprus Company, with business activities and personnel in the Republic: Investment worth €300,000 in the share capital of a company registered in the Republic of Cyprus, based and operating in the Republic of Cyprus and having a proven physical presence in Cyprus, and employing at least five (5) people.

OR

D. Investment in units as recognised by the Cyprus Investment Organization of Collective Investments (types of AIF, AIFLNP, RAIF): Investment worth €300,000 in units of Cyprus Investment Organization Collective Investments.

Additional Requirements

  • The funds of the investment must come from the Bank Account of the main applicant or his/her spouse, provided that the spouse is included as a dependant in the application.
  • For the submission of the application the amount of at least €300,000 ( + VAT) must be paid to the Developer regardless of the completion date for the property. Relevant receipts must accompany the submission of the application.
  • Provide evidence of a secure annual income of at least €50,000

(increased by €15,000 for the spouse and €10,000 for every minor child).

This income can come from; wages for work, pensions, stock dividends, interest on deposits, or rent. Income verification, must be the individual’s relevant tax return declaration, from the country in which he/she declares tax residence.

In the situation where the applicant wishes to invest as per investment option A, the income of the spouse of the applicant may also be taken into consideration.

In calculating the applicant’s total income where he or she chooses to invest as per the options B, C or D above, his/her total income or part of it may also arise from sources originating from activities within the Republic, provided that it is taxable in the Republic. In such cases, the income of the spouse/husband of the applicant may also be taken into consideration.

Other Terms and Conditions  

  • All family members must provide  a Health Insurance Certificate for medical treatment covering inpatient and outpatient care in case they are not covered by GEsy (The Cypriot National Health Care System).
  • The property to be used as the investment for the submission of the application and to be declared as the permanent residence of the family, must have sufficient bedrooms to satisfy the needs of the main applicant and his/her dependent family.
  • A clean criminal record issued by the authorities of the country of residence and country of origin (if different), need to be provided upon submission of the application.
  • The immigration permit does not allow the applicant and his/her spouse to undertake any form of employment in Cyprus and holders of the immigration permit must visit Cyprus once every two years. PRP holders are however permitted to own Cyprus companies and receive dividends.
  • The applicant and his spouse/husband will certify that they do not intend to be employed in the Republic with the exception of their employment as Directors in a Company in which they have chosen to invest within the framework of this policy.
  • In cases where the investment does not concern a Company’s share capital, the applicant and/or his spouse may be shareholders in Companies registered in Cyprus and the income from dividends in such companies shall not be considered as an obstacle for the purposes of obtaining the Immigration Permit. They may also hold the position of Director in such companies without pay.
  • In the cases where the applicant chooses to invest under any of options B, C, D, he/she must present information regarding the place of residence for himself and family members in the Republic (e.g. property title deed, sales document, rental document).

Family Members

  • As dependent family members, the main applicant can include ONLY; his/her spouse, minor children and adult children up to the age of 25 who are university students and financially dependent on the main applicant. No parents and/or parents-in-law are accepted as dependent family members. The annual secured income increases by €10,000 per adult child studying at a university up to the age of 25. The studying adult children must submit an application for a temporary residence permit as a student which can be converted to an Immigration Permit upon finalization of their studies.
  • HIGHER VALUE INVESTMENT TO INCLUDE ADULT CHILDREN

An Immigration Permit may also be granted to adult children of an applicant who are not financially dependent, on the understanding that a higher value investment is made. The market value of the investment of €300,000 should be multiplied according to the number of adult children, claiming the same investment for the purposes of obtaining an Immigration Permit. For example, where the applicant has one adult child, the investment should be worth €600,000, if he has two adult children the investment value should be €900,000 gross.

Benefits

Actual residence in Cyprus may lead to eligibility for Cyprus citizenship by naturalisation.

Ongoing requirements after approval of the application

Once the application is approved by the Civil Registry and Migration Department, the applicant must submit evidence, on an annual basis, to prove that; he/she has maintained the investment, that he/she maintains the required income determined for him and his family, and that he and his family members are holders of a health insurance certificate, in case they are not beneficiaries of GHS/GESY (General Health System). In addition, the applicant and his adult family members are required to provide an annual certificate of a clean criminal record from their country of origin, as well as from their country of residence.

Additional Information

If you would like any additional information regarding the Cyprus Permanent Residence Programme and/or the recent changes to it, please speak to our office in Cyprus: advice.cyprus@dixcart.com

Buying Property in Portugal –  What to Think About

Popularity of Portuguese Property

Property in Portugal has recorded double digit percentage growth in various sectors, listed by numerous real estate service companies, in recent years, and the expectation is that this will continue – with an increased demand and reduced supply than previously seen.

It is an interesting misconception that property prices are driven predominantly by the Golden Visa program – in actual fact, the Portuguese Golden Visa accounts for an insignificant portion of property purchases, when considered in comparison to total property purchases in Portugal.

What are the Factors Affecting Property Prices in Portugal?

Various factors in Portugal are influencing the increase in property prices, including:

  • Portugal is the new acclaimed California, the new European Silicon Valley;
  • Portugal is ranked one of the best places to live and work in the world;
  • It is an attraction magnet for digital nomads;
  • Portugal offers a 10-year tax holiday for the affluent;
  • Property has offered favourable investment opportunities over recent years and that is no different now.

Taxation of Property in Portugal

The importance of understanding the related tax consequences of holding property in Portugal is vital.

Dixcart have generated an Article that provides a comprehensive guide to the various taxes that need to be considered:

Property Taxes in Portugal – The Importance of Getting it Right – (dixcart.com)

Types of Tax to Consider

Please see below the types of taxes and the other matters that you should carefully consider:

  • When is Stamp Duty Applicable?
  • Stamp Duty on the Purchase of a Property
  • Property Transfer Tax
  • Annual Municipal Property Tax (IMI)
  • What Tax Consequences are Applicable Upon the Sale of a Property?
  • What are the Tax Consequences for My Rental Income?
  • What Inheritance Tax Implications Exist for Property (or is it Stamp Duty that Applies)?
  • What is the Preferred Structure to Hold Property in Portugal?

Dixcart is generating two additional guides regarding holding property in Portugal and the relevant taxes: the first relates specifically to the taxes in connection to property purchases and sales, while the second will cover the tax obligations in relation to rental income generated through property held in Portugal.

Other Considerations

Other important matters to take into account for non-resident individuals are; the specifics of the relevant double taxation treaty between Portugal and the country that the individual is resident in, as well as the local laws and regulations applicable in the country of tax residence.

A typical example of this for a UK resident, is the fact that UK tax residents also pay tax on the gain from the Portuguese property in the UK, however, under the double taxation treaty, any tax paid in Portugal may be credited against the tax due in the UK.

Why is it Important to Engage with Dixcart?

It is not just the Portuguese tax considerations on properties, but also the impact from where you may be tax resident and/or domiciled, that need to be considered. Although property is typically taxed at source, double taxation treaties and double tax relief need to be considered, as indicated above.

A typical example is the fact that UK residents will also pay tax in the UK and this will be calculated based on UK property tax rules, which may be different to those in Portugal.  They are likely to be able to offset the Portuguese tax actually paid against the UK liability to avoid double taxation, but if the UK tax is higher, further tax will be due in the UK. Dixcart will be able to assist in this regard and to help make sure you are aware of your obligations and filing requirements.

How Else Can Dixcart Assist?

Dixcart Portugal have a team of experienced professionals who can assist with various aspects regarding your property; efficient tax planning, legal support (for the sale or purchase of a property), accounting and tax support and the incorporation and maintenance of companies.

Further to this, if you would like a deemed tax calculation to be performed, or any additional information, please reach out to our offices in Portugal for this information: advice.portugal@dixcart.com