Wealth Management in Cyprus: The 60-Day Rule and Non-Dom Tax Strategy

Cyprus has emerged as one of Europe's most attractive destinations for internationally mobile high-net-worth individuals, offering a combination of EU membership, English-speaking professional services, a favourable tax environment, and a relaxed Mediterranean lifestyle. The island's 60-day tax residency rule and non-domicile regime make it particularly appealing for those who do not wish to — or cannot — become tax resident in the UAE, Singapore, or other zero-tax jurisdictions but are looking for a legitimate, EU-compliant alternative to high-tax European countries.

This guide explains the mechanics of Cyprus tax residency, the non-domicile (non-dom) regime, and the key planning strategies for HNW residents.

Cyprus Tax Residency: The 183-Day and 60-Day Rules

Under standard international rules, an individual becomes Cypriot tax resident by spending 183 days or more in Cyprus in a calendar year. However, Cyprus offers an alternative — and more flexible — route: the 60-day rule.

Under the 60-day rule, an individual is considered Cypriot tax resident if in the relevant tax year they:

1. Spend at least 60 days in Cyprus
2. Do not spend 183 or more days in any other single country
3. Are not tax resident in any other country
4. Have defined ties to Cyprus — either carrying on a business in Cyprus, being employed in Cyprus, or holding an office in a Cyprus tax-resident company

This rule is particularly valuable for internationally mobile individuals who travel extensively and cannot, or choose not to, spend 183 days in any single jurisdiction. It allows Cyprus tax residency to be established with a relatively modest physical presence on the island, provided the other conditions are met.

It is important to note that Cyprus tax residency alone does not resolve tax obligations in other countries. For UK nationals, for example, the Statutory Residence Test must also be satisfied — specifically, they must have ceased UK residence. The 60-day Cyprus rule does not automatically achieve this. Careful counting of days in the UK and compliance with the UK's split-year rules (where applicable) is necessary.

Cyprus Non-Domicile Status

Cyprus distinguishes between tax-resident individuals who are domiciled in Cyprus and those who are not. The distinction is highly significant because:

• Tax-resident domiciliaries pay income tax on worldwide income and are subject to the Special Defence Contribution (SDC)
• Tax-resident non-domiciliaries pay income tax on Cyprus-source income but are exempt from SDC on dividends and interest income from all sources for 17 years from the date they first became Cypriot tax resident

Following the 2026 tax reform, SDC on dividends received by domiciliaries (from both Cypriot and overseas companies) was reduced from 17% to 5% (for dividends out of post-2026 profits; older profits remain at 17% transitionally), SDC on rental income was abolished, and SDC on most interest was substantially reduced. The exemption for non-doms — who pay no SDC on dividends, interest, or rental income — is therefore highly valuable for individuals with substantial investment portfolios generating dividend and interest income.

Who Is a Cyprus Non-Domiciliary?

For Cyprus tax purposes, an individual is non-domiciled in Cyprus if they were not domiciled in Cyprus (under the general law concept of domicile — broadly, where you have your permanent home and intend to reside indefinitely) and have not been Cypriot tax resident for 17 or more of the 20 years preceding the relevant year.

Most non-Cypriot nationals who become Cyprus tax residents will qualify as non-doms automatically, at least in their early years of residence. The 17-year clock begins running from the first year of Cyprus tax residence.

What Taxes Apply to Cyprus Non-Dom Residents?

A Cyprus tax resident non-dom is subject to:

• Income tax: on employment income, professional income, and pension income at progressive rates (following the 2026 reform, 0% on the first €22,000, rising to 35% on income above €60,000)
• Income tax on rental income: from Cyprus property
• Capital gains tax (CGT): only on disposal of immovable property located in Cyprus or shares in companies owning Cyprus property. There is no general CGT in Cyprus — gains from the disposal of shares, funds, bonds, and other securities (including overseas property) are exempt

Importantly, overseas dividends, overseas interest, and overseas capital gains are all exempt from Cyprus tax for non-dom residents (dividends and interest exempt from SDC; gains not subject to CGT). This makes Cyprus particularly attractive for investors with internationally diversified portfolios.

There is no inheritance tax in Cyprus, and no wealth tax.

Income Tax: The Employment Exemptions

Cyprus offers two significant income tax exemptions for employees who are not Cypriot nationals and take up employment on the island.

The 50% Exemption

Individuals who were not Cyprus tax resident for at least 15 consecutive years immediately preceding the commencement of their first employment in Cyprus, and who earn above €55,000 per year from their Cypriot employment, can claim a 50% exemption on their employment income under Article 8(23A) of the Income Tax Law. This exemption applies for a maximum of 17 tax years from the start of first employment (the qualifying prior-non-residence period was extended to 15 consecutive years by an amendment in 2023, applying retroactively from 1 January 2022). For a high-earning executive or business owner taking up Cyprus employment, this is a very substantial benefit.

The 20% Exemption

A separate 20% exemption (capped at €8,550 per year) is available to individuals who were not previously Cypriot tax residents and take up employment in Cyprus. This is the older, less generous exemption and is now largely superseded by the 50% relief for qualifying higher earners.

Corporate and Business Structures

Cyprus's corporate tax rate rose from 12.5% to 15% on net profits with effect from 1 January 2026 (aligning with the OECD Pillar Two global minimum) — still competitive by EU standards. Cyprus holding companies are widely used by international business owners to hold participations in overseas companies: dividend income from qualifying foreign subsidiaries is generally exempt from Cypriot corporate tax under the participation exemption, and gains from the disposal of shares in overseas companies are also exempt.

Cyprus has an extensive network of double tax treaties (over 65 as of 2026) and is a member of the EU, giving access to the EU Parent-Subsidiary Directive and Interest and Royalties Directive. These features make Cyprus holding companies attractive for international group structures, particularly those with operations in Eastern Europe, the Middle East, and Russia/CIS (though the latter has become more complex following sanctions from 2022 onwards).

Banking and Financial Services

Cyprus has two main banks — Bank of Cyprus and Eurobank Cyprus — alongside several international banks with Cyprus licences. The banking sector experienced significant difficulties following the 2013 bail-in, during which large depositors in Bank of Cyprus (including non-resident depositors) suffered losses through conversion of deposits to equity. The sector has since been substantially recapitalised and the banks are subject to ECB supervision under the Single Supervisory Mechanism.

HNW individuals typically maintain significant assets with international private banks rather than Cypriot domestic banks, using Cyprus as their tax residency jurisdiction rather than as a banking centre. Cyprus-regulated investment firms (CIFs) offer regulated investment services and are increasingly used by internationally mobile clients.

Property and Residency

Cyprus offers a permanent residency programme for non-EU nationals who invest at least €300,000 in new property from a developer. This route — distinct from, and significantly cheaper than, the now-suspended citizenship-by-investment programme — provides a renewable permanent residence permit that, combined with compliance with the 60-day rule, can underpin Cyprus tax residency.

Cypriot real estate is subject to an immovable property transfer fee (at rates depending on the value of the property) and stamp duty. There is no Cypriot CGT on the disposal of property other than real estate in Cyprus.

Compliance and Substance

Cyprus's attractiveness has brought increased scrutiny from international tax authorities, particularly with regard to substance requirements. For the 60-day residency rule to be respected by other jurisdictions (particularly HMRC), the individual must have genuine ties to Cyprus — a business or employment, a home, family connections — and the counting of days must be rigorous. Sham or artificial residency arrangements that lack genuine substance risk challenge by the individual's home country tax authority.

Cyprus participates in CRS and exchanges financial account information with over 100 jurisdictions. Cyprus is also subject to EU anti-tax avoidance directives (ATADs I and II), which impose controlled foreign company (CFC) rules and hybrid mismatch rules on Cypriot entities.

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This guide is for educational purposes only and does not constitute regulated financial, tax, or legal advice. Cyprus tax law may change; seek qualified advice before acting. Investments can fall as well as rise in value.

How Global Investments Can Help

Global Investments has extensive experience working with HNW individuals who are considering or have established Cyprus tax residency. We help clients navigate the interaction between the 60-day rule, non-dom status, UK Statutory Residence Test requirements, and their investment portfolio structuring — and we coordinate with Cypriot legal and tax advisers, international private banks, and, where relevant, advisers in the client's home jurisdiction.

Whether you are weighing up Cyprus against other residency options or need a comprehensive review of your existing Cyprus arrangements, contact us to arrange a confidential consultation.