The UK’s non-domicile (non-dom) tax regime has long been an attractive option for high-net-worth individuals seeking favorable tax treatment. However, with the recent announcement by the UK government that this regime will be abolished effective 6 April 2025, individuals currently benefiting from it or considering relocating are now searching for alternative solutions that meet their tax and financial planning needs.
The cancellation of the UK’s non-dom tax regime marks a significant shift in the global tax landscape, impacting thousands of non-domiciled residents who have relied on this system to minimize their tax obligations. This change is part of the government’s broader efforts to address economic and fiscal challenges and is expected to have substantial implications for high-net-worth individuals. For more details on the official announcement and its implications, visit UK Government Non-Dom Announcement.
Why Consider Cyprus for Your New Tax Residency?
Cyprus has emerged as a top destination for individuals (both EU and non-EU nationals) looking for an effective and efficient tax residency solution. The Cyprus non-dom tax regime offers significant benefits and provides an ideal environment for those needing a new base for both personal and business activities.
Key Features of the Cyprus Non-Dom Regime
Automatic Eligibility: Foreign individuals who become tax residents in Cyprus automatically qualify for the non-dom tax regime, which can be utilized for up to 17 years.
Flexible 60-Day Rule: Individuals can establish tax residency in Cyprus quickly through the convenient 60-day rule, providing a seamless transition for those needing to relocate their tax base promptly. More information on tax residency and 60-day rule requirements can be found here.
Tax Exemptions: Cyprus non-dom residents enjoy full exemption from taxation on dividends and interest, irrespective of the source and whether these funds are remitted to Cyprus or not.
Capital Gains: Complete tax exemption on profits from the sale of shares and qualifying securities, as well as on capital gains not related to immovable property in Cyprus.
No Inheritance Tax: Cyprus does not impose inheritance tax, offering peace of mind for estate planning.
Why High-Net-Worth Individuals Choose Cyprus
For individuals with substantial incomes derived from dividends, interest, and capital gains, the Cyprus tax regime is particularly beneficial. The island’s business-friendly environment also provides a competitive edge, featuring:
Low Corporate Tax Rates: Cyprus boasts one of the lowest corporate tax rates in the EU at 12.5%. You can read more about our tax system here.
Business Infrastructure: The well-established infrastructure supports the development of operational substance for companies.
Legal and Business Framework: The legal system is based on English common law, ensuring clarity and reliability for business operations.
Cost Advantage: A comparatively lower cost of establishing and maintaining business presence versus other prime EU jurisdictions.
Beyond Tax Benefits: A Balanced Lifestyle
Cyprus isn’t just about favorable tax rates. The island offers an excellent quality of life characterized by:
Ideal Geographical Location: Located at the crossroads of Europe, Asia, and Africa, Cyprus provides easy access to major markets.
Mediterranean Climate and Natural Beauty: The island is known for its warm weather, blue-flag beaches, and scenic landscapes.
Safety and Stability: Cyprus maintains a low crime rate, making it a secure environment for families.
Modern Infrastructure: High-quality housing, international schools, advanced healthcare, and a cosmopolitan lifestyle add to its appeal.
A Prime Business Hub
Cyprus offers more than just personal tax benefits; it’s a strategic hub for international business operations. Companies can benefit from:
Relocation Incentives: Provisions for businesses and key management to easily relocate to Cyprus.
Professional Services: A robust network of local service providers, including legal, financial, and administrative services, enhances ease of doing business.
How Asterisk Corporate Services Can Assist
Navigating a transition to Cyprus can be seamless with the right support. Asterisk Corporate Services offers comprehensive assistance with:
- Company Incorporation: Assistance in setting up and managing a Cyprus company, including redomiciliation services.
Immigration Processes: Guidance through all necessary immigration and residency requirements.
Tax Registration and Compliance: Ensuring tax registrations and ongoing personal income tax obligations are met.
Fiduciary Services: Establishing Cyprus International Trusts with professional trustee services.
Banking Solutions: Opening and managing local and international bank accounts.
Accounting and Bookkeeping: Full range of financial management services to ensure compliance and efficiency.
Conclusion
With the impending end of the UK non-dom tax regime, Cyprus presents an unmatched opportunity for high-net-worth individuals seeking a favorable tax environment coupled with an exceptional quality of life. Asterisk Corporate Services is here to guide you through every step of the process, ensuring a smooth transition and successful establishment in Cyprus.
For more details and tailored advice, contact us today at Asterisk Corporate Services and begin your journey to benefiting from the Cyprus non-dom regime.
For comprehensive solutions that align with your tax and business needs, visit asterisk.cy.
Information provided above is for information purposes and does not constitute any form of advise. For formal advise please contact us or any other tax professional.
