Change of Tax Residency of Individuals to Cyprus 0% Taxation on Dividends, Interest, and Capital Gains

Requirements for Individuals

Cypriot legislation offers flexibility, allowing individuals to obtain tax residency through two different rules, enabling each applicant to choose the one that best suits their lifestyle and professional activity.

The 183-Day Rule

This is the simplest approach. An individual is considered a Cyprus tax resident if they stay on the island for more than 183 days within the same tax year (January 1 – December 31). No additional conditions are required, as physical presence alone is sufficient to obtain the certificate.

The 60-Day Rule

This rule was designed for individuals who travel frequently and maintain international activities. To qualify, the following criteria must be met cumulatively within the same year:

• Stay in Cyprus for at least 60 days
• Do not reside in any other country for more than 183 days and do not maintain tax residency elsewhere
• Carry out business activity (e.g., shareholder in a company) or be employed in Cyprus
• Maintain a permanent residence in Cyprus, either owned or rented

The Preferential Non-Dom Regime (Non-Domiciled Status)

Obtaining tax residency is, for most foreign nationals, accompanied by eligibility for the special Non-Domiciled (Non-Dom) regime. This regime applies to individuals who do not have Cypriot origin and have not been tax residents of Cyprus for at least 17 of the previous 20 years.

The Non-Dom regime offers significant tax relief: full exemption from the Special Defence Contribution tax for 17 years. In practice, this means that the new tax resident enjoys zero taxation (0%) on dividend and interest income, whether originating from Cyprus or abroad.

The Process in Cyprus: Step by Step

The Localit Consulting team, supported by experienced lawyers, accountants, and auditors, coordinates and executes all necessary actions within the Republic of Cyprus to complete your relocation. The key steps we handle include:

1. Securing Residence & Address
Assistance in finding and signing a rental agreement for your permanent residence on the island, as proof of accommodation is mandatory.

2. Registration with the Civil Registry (Yellow Slip)
For EU citizens (including Greece), we submit the application for the Registration Certificate for EU Citizens (known as the Yellow Slip). For third-country nationals, we proceed with the relevant procedures to obtain residence and work permits.

3. Social Insurance Registration
We handle your registration with the Cyprus Social Insurance Register if you are employed by a company. If an individual (e.g., a pensioner or someone living exclusively from passive income/dividends) resides in Cyprus without professional activity, there is no obligation to register with Social Insurance. Social Insurance registration is often linked to registration with the Cyprus General Healthcare System (GeSY), ensuring full medical coverage.
In all cases, based on the applicant’s profile, we conduct a thorough assessment to determine whether Social Insurance registration is required.

4. Issuance of Cyprus Tax Identification Number (TIC)
Registration with the Tax Department to obtain a Cyprus Tax Identification Code.

5. Application for Tax Residency Certificate
Once the required days (60 or 183) are completed and supporting documents are gathered (flights, accommodation proofs, insurance certificates), we submit the application to the Tax Department.

6. Non-Dom Status Application
Simultaneous submission of the application to secure Non-Domiciled status, activating your tax exemptions on dividends immediately.