Cyprus as a jurisdiction: the company, non-dom status and opening a bank account
Why people move to Cyprus for more than the sea: the corporate tax rate, the non-dom regime with its exemption from defence contribution, the 60-day tax residency rule and what opening a bank account really involves.
Cyprus is on the list of investment destinations for more than its sea. A large share of buyers come for the tax and corporate regime, and the apartment is a consequence of the move rather than its purpose. It is worth working through it in that order.
The company
A Cypriot company is an EU resident with one of the lowest corporate tax rates in the Union and a wide network of double tax treaties — which is why holding and IT structures favour it. But the rules have tightened considerably: what matters now is real substance — an office, staff, decisions taken on the island. A shell company with a nominee director today creates more problems than it solves, and banks are the first to check.
Tax residency and the 60-day rule
The usual threshold for tax residency is 183 days a year. Cyprus has added a 60-day rule on top: you can become tax resident after spending 60 days in the country, provided you are not tax resident anywhere else, have not spent more than 183 days in any other single country, run a business or work in Cyprus or hold an office in a Cypriot company, and own or rent a home there. That last condition is what makes buying an apartment part of the tax structure rather than a separate decision.
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Non-dom status
An individual who becomes tax resident in Cyprus but is not domiciled there receives non-domiciled status for a set period. The practical point is an exemption from the defence contribution that Cyprus levies on dividends, interest and rental income. For someone living on dividends from their own company or on rental income, that is where the real saving lies — noticeably larger than any difference in income tax rates.
The bank account: how it really is
The days when a Cypriot account could be opened remotely within a week ended with the 2013 banking crisis and the tightening of compliance that followed. Today:
- Attending in person to open the account is the norm, not the exception.
- The origin of funds has to be documented, and the bar for completeness is higher than in most countries.
- A connection to the country — a residence permit, a job, property, a company with real activity — makes the conversation with the bank considerably easier.
- Timelines run to weeks, and a refusal without explanation is possible.
What follows from this
- Structure first, apartment second. If the goal is tax residency, the property is chosen to meet the 60-day rule, not the other way round.
- Real substance is mandatory. Paper structures with no office and no people in Cyprus no longer work.
- Non-dom status is time-limited, and you need to understand what happens once it runs out.
- All of this is also a question for a tax adviser in your home country. Residency in Cyprus does not cancel your obligations where you were resident before.
Based on the tax legislation of the Republic of Cyprus, its tax residency rules and the compliance practice of Cypriot banks.
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