Trusted Accountants in Cyprus

Why HNWIs Choose Cyprus in 2026

For Cyprus tax-resident and domiciled individuals, the Special Defence Contribution (SDC) on dividends was reduced from 17% to 5% with effect from 1 January 2026. For shareholders in owner-managed businesses, this is material: the combined effective rate on distributed profits — at a 15% corporate tax rate plus 5% SDC — falls to approximately 19.25%, one of the lowest in the EU for a fully taxed and distributed profit flow. One important planning point: dividends from profits earned up to 31 December 2025 remain subject to SDC at the old 17% rate, provided those dividends are received by the shareholder on or before 31 December 2031. The timing of receipt — not only the formal declaration — determines which rate applies. If your company holds accumulated pre-2026 profits, a structured distribution plan is worth reviewing with your adviser.

Non-domiciled tax residents of Cyprus pay 0% SDC on dividend income and 0% on interest income, regardless of amount. This exemption is one of the most valuable features of the Cyprus tax regime for internationally mobile individuals and was preserved in full by the 2026 reform. Non-domicile status is available to individuals who were not born in Cyprus and who have not been resident in Cyprus for more than 17 of the last 20 years. Once the 17-year threshold is reached, you are treated as deemed domiciled and would ordinarily become subject to SDC on dividend and interest income. The 2026 reform introduced a significant extension option: on reaching the 17-year threshold, you can apply to extend non-dom status for a further five years by making a one-off payment of €250,000, subject to eligibility and conditions. This can be renewed once for a further five years on the same terms. The extension gives internationally mobile individuals a clear and planned pathway beyond the 17-year point without needing to exit Cyprus.

Cyprus allows individuals to qualify as Cyprus tax residents by spending as few as 60 days in Cyprus per calendar year, rather than the standard 183-day threshold. The conditions are: at least 60 days in Cyprus, a permanent home in Cyprus (owned or rented), and a business, employment, or economic interest in Cyprus. From 1 January 2026, the condition that an individual must not be tax resident elsewhere was removed. Cyprus can now be used as a tax residence base even where an individual also holds residency status in another country, subject to their overall treaty and domestic position. Advance planning is recommended to ensure the 60-day position is properly documented and defensible.

Individuals who take up employment in Cyprus for the first time with a Cyprus employer may qualify for a 50% income tax exemption on employment remuneration exceeding €55,000 per year. The exemption is available for up to 17 years and applies to individuals who were not resident in Cyprus for 15 of the 20 years preceding their first year of Cyprus employment.
Under Circular 4/2024, individuals who change employers while in Cyprus can continue benefiting from the exemption with their new employer — removing a previous uncertainty that arose on employer transitions. This exemption is particularly relevant for senior executives, fund managers, and directors relocating to Cyprus.

Stamp duty on commercial contracts was abolished in Cyprus in its entirety from 1 January 2026. This removes a friction cost that previously applied to share purchase agreements, loan agreements, and business contracts. For clients completing transactions or restructurings in Cyprus, the saving is immediate and requires no planning action.

For clients with exposure to digital assets, Cyprus now taxes gains from the disposal, exchange, or use of crypto-assets at a flat 8% under the 2026 reform. The rate is clear, competitive, and applies a defined framework in a space that many jurisdictions have left unresolved.

Cyprus has no inheritance tax and no gift tax. For clients planning intergenerational wealth transfer or structuring family assets across generations, Cyprus removes a layer of cost and complexity that applies in most other European jurisdictions.

Cyprus is an EU member state progressing towards accession to the Schengen Area. The EU formally endorsed Cyprus’s readiness in its May 2026 assessment report. A vote at the Justice and Home Affairs Council may follow in late 2026 or 2027. Accession would give Cyprus residents visa-free, border-control-free access across the 29 Schengen member states.

What Evidentrust Does for HNWI Clients

Evidentrust Financial Services Ltd is an ICPAC-regulated firm based in Limassol. We advise high-net-worth individuals, international executives, family offices, and business owners on Cyprus tax planning, residency structuring, and ongoing compliance.

• Residency and relocation planning — assessing your options under the 60-day and 183-day rules, structuring your Cyprus tax residence, and preparing the documentation required to establish and defend it.
• Non-dom status advisory — confirming eligibility, planning ahead of the 17-year threshold, and advising on the extension option where it applies.
• Personal income tax planning and compliance — annual self-assessment returns, withholding tax analysis, and income structuring.
• Dividend planning — timing and structuring of distributions from Cyprus or foreign companies, with SDC analysis for domiciled and non-domiciled shareholders, including pre-2026 profit pools.
• International structure review — reviewing existing holding, investment, or trust structures for substance, treaty access, and anti-avoidance exposure in the context of the 2026 reform.
• Wealth transfer and succession — in coordination with Cyprus legal advisers, advising on inheritance-efficient structuring and trust planning.
• Ongoing compliance — annual personal tax return filing, UBO register obligations, substance maintenance, and representation before the Cyprus Tax Department.

Frequently Asked Questions