Financial Planning for Expats in Cyprus

Tax advantages

• 60-day non-dom rule: tax residency with as few as 60 days per year in Cyprus
• Non-dom status: no Special Defence Contribution (SDC) on dividends or interest for up to 17 years
• 5% flat rate on foreign pension income (above €3,420 threshold)
• No inheritance tax in Cyprus
• 15% corporate tax from 1 January 2026 (was 12.5%) — still among the more competitive EU rates
• Extensive double tax treaty network (65+ countries including the UK)

Quality of life & infrastructure

• EU member state — full EU rights for EU citizens; long-term residency routes for non-EU
• English widely spoken — official legal system based on English common law
• GESY national health system — compulsory for residents; high quality
• Warm climate, Mediterranean lifestyle, excellent air connections
• Established expat community in Limassol, Paphos, and Larnaca
• Freehold property ownership with strong legal framework

What is the Cyprus 60-day non-dom rule?

The Cyprus 60-day rule is a special tax residency provision allowing individuals to become Cyprus tax resident by spending at least 60 days in Cyprus during a tax year — provided they do not spend more than 183 days in any other single country, are not tax resident in any other country, and maintain a permanent home in Cyprus (owned or rented) and carry out business in Cyprus or are employed there. Combined with non-domicile status, this gives significant protection from Special Defence Contribution (SDC) on dividend and interest income.

Is UK pension income taxable in Cyprus?

Under the UK-Cyprus double tax treaty, UK pension income paid to a Cyprus tax resident is generally taxable only in Cyprus. A special flat rate of 5% applies to foreign pension income in Cyprus (above a €3,420 exemption). This is significantly lower than UK income tax rates. To benefit, you need to obtain NT (nil tax) coding from HMRC to stop UK withholding tax at source. UK state pension and government service pensions are treated differently — take advice on your specific pension type.

Can I still have a UK bank account as a Cyprus resident?

Yes — there is no legal prohibition on Cyprus residents holding UK bank accounts. However, some UK banks review accounts for non-residents under their terms and may close or restrict them. It is advisable to have at least one multi-currency international account. Cyprus has a well-developed banking system and major international banks operate locally. Our offshore banking page covers the options available for cross-border account-holding.

Do I need a will in Cyprus?

If you own property or assets in Cyprus, a Cyprus will is strongly recommended. Cyprus law applies forced heirship rules for Cyprus-domiciled individuals, meaning a fixed share of the estate passes to children regardless of the will. EU Succession Regulation (EU 650/2012) allows EU citizens to elect the law of their nationality to govern their estate — in practice, a well-drafted will specifying English law is typically used alongside a separate Cyprus property will. Always take local legal advice.

What is the Cyprus non-dom SDC exemption?

Non-domiciled Cyprus tax residents are exempt from Special Defence Contribution (SDC). For domiciled residents, SDC applies to interest income at 30% and to dividends (from 1 January 2026 the SDC rate on dividends was reduced from 17% to 5% under the 2026 tax reform). The non-dom exemption applies for up to 17 years from the date of first becoming a Cyprus tax resident, provided the individual was not a Cyprus tax resident for at least 17 of the 20 years prior. In practice, this means investment income — dividends, interest, and most foreign-source rental income — is effectively untaxed for qualifying non-dom residents for up to 17 years.