Cyprus has become an increasingly attractive destination for internationally mobile individuals seeking tax residency. A lot of individuals have chosen Cyprus in recent years, for its favorable climate, EU membership, robust legal system, and tax incentives making it a strategic choice for entrepreneurs, professionals, and remote workers. But how exactly can someone become a tax resident in Cyprus?
The country offers two clear pathways to tax residency for individuals: the 183-day rule and the 60-day rule. Understanding how these work—and how to apply them in practice—is essential for proper planning and compliance.
What Is Cyprus Tax Residency?
An individual is considered tax resident in Cyprus if they meet either of the following two conditions within the same calendar year (January 1 – December 31):
The 183-Day Rule (Traditional Route)
This is the standard rule applied globally and is very straightforward:
The individual spends more than 183 days in Cyprus in a given tax year.
There is no additional requirement regarding employment, investment, or economic activity.
Individuals who meet this rule are considered Cyprus tax residents and are subject to Cyprus income tax on their worldwide income.
The 60-Day Rule (Flexible Residency Route)
Introduced in 2017, the 60-day rule is tailored for those who may not spend significant time in any one country but still wish to establish clear tax residency in Cyprus. To qualify, all of the following conditions must be met in the same tax year:
Stay in Cyprus for at least 60 days
Do not reside in any other country for more than 183 days
Are not considered tax resident in any other country
Conduct business, are employed, or hold an office (e.g., director) in a Cyprus tax-resident company
Maintain a permanent residence in Cyprus, either owned or rented, for personal use. You can combine this step with the Permanent Residency Programme (see bonus section below)
⚠️ Important: The employment or business relationship must not be terminated before 31 December of the same year.
How we structure this for some of our clients, is that they incorporate a Cyprus Company and they become Directors / Employees of this Company. Contact us for more information on how we can assist you set this up to meet the criteria.
How Days Are Counted
For both rules, days are calculated based on physical presence:
Arrival day in Cyprus: counts as a day in Cyprus
Departure day: counts as a day outside Cyprus
Same-day arrival and departure: counts as a day in Cyprus
Tax Residency Certificate
Once the conditions of either rule are met, individuals need to apply for a Tax Residency Certificate from the Cyprus Tax Department. This certificate is often used to prove residency status to foreign tax authorities, banks, and financial institutions. This is a process we undertake for our clients.
Why Choose Cyprus for Tax Residency?
Cyprus offers a range of tax advantages to resident individuals, particularly those who are classified as non-domiciled:
No tax on worldwide dividends and interest for non-doms
No wealth tax or inheritance tax
Attractive income tax exemptions for high earners and first-time residents
Access to over 60 double tax treaties
Practical Tips for Compliance
Keep accurate travel records (e.g., boarding passes, passport stamps etc)
Have clear employment contracts, appointment documents, or proof of business activity
Maintain a valid lease agreement or title deed for your Cyprus residence
Ensure you are not deemed a tax resident elsewhere under any other country’s laws
Bonus: Combine Tax Residency with Cyprus Permanent Residency by Investment
For individuals seeking both tax efficiency and a stable long-term presence in the EU, Cyprus offers an attractive combination: you can establish tax residency under the 60-day rule while also securing permanent residency through property investment.
By investing in Cyprus real estate, eligible individuals and their families can apply for Cyprus Permanent Residency under the fast-track programme, gaining the right to reside indefinitely in Cyprus and benefit from its EU-member status.
👉 Learn more about the Cyprus Permanent Residency by Investment Programme here.
This dual approach—residency for both tax and immigration purposes—is ideal for high-net-worth individuals, digital nomads, and internationally mobile professionals looking to simplify their lifestyle and global obligations in one strategic location.
Key Benefits of Being a Cyprus Tax Resident
Becoming a Cyprus tax resident—especially under the non-domiciled (non-dom) status—offers a wide range of personal tax advantages:
Income Tax Benefits
First €19,500 of annual income is tax-free
Progressive tax rates from 20% to a maximum of 35% above €60,000
New residents may qualify for a 50% income tax exemption on employment income exceeding €55,000 (valid for 17 years)
Non-Dom Status (Huge Tax Savings)
Individuals who are Cyprus tax residents but are non-domiciled in Cyprus enjoy exemptions on:
Dividends (100% tax-free – exemptions apply)
Interest income (100% tax-free)
Rental income: taxed only under income tax (no Special Defence Contribution)
⚠️ Non-dom status applies for 17 years from the date of first tax residency and is especially advantageous for foreign nationals.
Other Notable Benefits
No wealth tax
No inheritance tax
Access to Cyprus’s extensive network of double tax treaties
Right to apply for EU residence permits or Cyprus Permanent Residency
Ability to structure international income more efficiently
Cyprus is not just a tax-efficient jurisdiction—it’s also a secure, EU-based, business-friendly location with a high quality of life.
Conclusion
Whether you’re a digital nomad, business owner, or investor, Cyprus provides two flexible and transparent options for becoming tax resident. With professional guidance and proper documentation, you can enjoy low taxation, EU access, and long-term certainty—all from a Mediterranean base. Contact us at contact@asterisk.cy for more information on how we can assist you meet up the criteria and relocate to Cyprus.
Please note that the above is for information purposes only and does not constitute any form of advise. If you need advise please contact us or contact your professional advisor.
