Category: Residency

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 e–mail.

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 Jonathan Vassallo: advice.malta@dixcart.com at the Dixcart office, in Malta or your usual Dixcart contact.

Dixcart Management Malta Limited Licence Number: AKM-DIXC.

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 take the decision to relocate to a more 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

Moving to Cyprus

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

EU Non-Domiciled UK Residents Moving to Cyprus.

Nationals of EU Member States 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/her spouse 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 route 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:

• 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 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:

• Minimum annual income (sourced from outside Cyprus) 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, certified by the relevant authorities in the country where the applicant is currently 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, which could result in the permit being rejected or revoked.

Additional Information

For further information, please contact the Dixcart office in Cyprus: advice.cyprus@dixcart.com.

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.

2. 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.

3. 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.

2. 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

3. 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.

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, 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 Jonathan Vassallo, 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.

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. 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, 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.

It is worth noting that each year the government only issues a set number of visas. This number is at the discretion of the government and each year the scheme has been in place the cap has been reached.

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.

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 26^th 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 €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.

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

Cyprus Lifestyle and Tax Benefits

Why choose Cyprus for relocation purposes?

Surrounded by the bright blue waters of the Mediterranean Sea, Cyprus has always been an enticing location for high-net-worth individuals considering relocation. It is a member of the EU and therefore well positioned for those who seek global mobility and ease of travel across Europe, as well as the Middle East and Africa.

English is widely spoken in Cyprus, having been part of the Roman Empire and a British colony for many years, however traditions run deep through the island’s villages, with each enjoying a variety of cultural influences to share with newcomers.

Cyprus has a Mediterranean climate. Whilst small, the island is an archaeological and natural haven, with stunning seaside villages and beaches. It is also home to a large community of expats who have relocated to Cyprus to enjoy the benefits that the island, and the tax regime offers.

Cyprus offers the following lifestyle benefits:

• A Mediterranean lifestyle and peaceful, friendly community
• A good work-life balance
• Excellent transport links
• A diverse range of amenities
• Low cost of living
• Excellent private and state healthcare sectors
• A large expat community
• A high quality of education, there is the option for private education (English curriculum) or public education, as well as several international Universities located on the island
• Attractive tax benefits

Cyprus Offers a Range of Interesting Tax Incentives for Individuals

Many high-net-worth individuals relocate to Cyprus due to its advantageous non-domicile tax regime, whereby individuals who were not previously tax resident can apply for non-domicile status.

Cypriot non-domiciles benefit from a zero rate of tax on; interest, dividends, and capital gains (apart from capital gains derived from the sale of immovable property in Cyprus), and capital sums received from pension, provident and insurance funds.

These zero tax benefits are enjoyed even if the income has a Cyprus source or is remitted to Cyprus. There are several other tax advantages, including a low rate of tax on foreign pensions, and there are no wealth or inheritance taxes in Cyprus.

Options for Relocating: Permanent Residence and Temporary Residence Permits

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.

Alternatively, a temporary residence permit can be obtained by establishing a foreign investment company (FIC). Through this kind of international company, work permits can be obtained for relevant employees, and residence permits for them and family members. Another key advantage is, again, that after residing for seven years in Cyprus, within any ten-calendar year period, third country nationals can apply for Cyprus citizenship.

Moving to Cyprus to take up Employment.

It is common for high-net-worth individuals to relocate to Cyprus for employment purposes. If the Permanent Residence Permit is not the right route for you and/or your family, Cyprus offers several alternate ways to live and work in Cyprus:

• Business Facilitation Unit: visas for highly skilled third country nationals – the Ministry of Finance announced in 2022, that they are introducing the Business Facilitation Unit to assist highly skilled third country employees with a minimum gross salary of €2,500 per month, to gain work permits in Cyprus. These permits will last up to three years.
• Digital Nomad visa: non-EU nationals who are self-employed, salaried, or on a freelance basis can apply for the right to live and work in Cyprus remotely, for up to one year. The visa can be renewed for another two years.

Why Relocate to Cyprus for Work?

Personal taxation benefits:

• A tax exemption, of 50% of employment income, is available to an individual employed in Cyprus who was resident outside of Cyprus before he/she commenced employment in Cyprus. The exemption applies for a period of seventeen years starting from the first year of employment in Cyprus, provided that employment income exceeds €55,000 per year.
• Cyprus has more than 65 tax treaties that provide for zero or reduced withholding tax rates on; dividends, interest, royalties, and pensions received from abroad. In addition, lump sums received as a retirement gratuity, are exempt from tax.
• A Cypriot tax resident receiving pension income from abroad, can choose to be taxed at a flat rate of 5%, on amounts exceeding €3,420 per year.

Starting a Business in Cyprus as a Means of Relocation

The reputation of Cyprus as an international financial centre has grown significantly over recent years. Cyprus is an attractive jurisdiction for trading and holding companies and offers a number of tax incentives.

In order to encourage new businesses 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, third country nationals can apply for Cyprus Citizenship.
• Establishment of a small and medium sized Innovative Enterprise (Start-up visa): this scheme allows entrepreneurs (individuals or a team), from countries outside the EU and outside the EEA, to enter, reside and work in Cyprus in order to; establish, operate, and develop a start-up business. This visa is available for one year, with the option to renew for another year.

Corporate Tax Benefits:

• 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.
• NID is deducted from taxable income. It cannot exceed 80% of the taxable income, as calculated prior to the Notional Interest Deduction, arising from the new equity. A company could achieve an effective tax rate as low as 2.50% (income tax rate 12.50% x 20%).

Get in Touch

For additional information about the attractive tax regime for individuals moving to Cyprus, or information regarding relocating there, please contact: advice.cyprus@dixcart.com.