Cyprus plans to provide new tax incentives to employees of foreign companies
The Cabinet of Ministers of Cyprus has approved a bill introducing tax incentives for executives and employees of foreign companies who choose the country for business relocation.
The bill has been sent to Parliament. It will come into force after it is approved by the deputies.
Cyprus is considered to be one of the best places to open a new company or transfer tax residence of an international business. The corporate tax rate in the country is only 12,5%. The company does not pay tax if it receives income from dividends, exchange rate differences, securities transactions, a foreign branch of a Cypriot company.
Only half of the income tax is paid by managers and employees of foreign companies in Cyprus if their annual salary is above €100,000.
The Cabinet of Ministers of Cyprus has approved a bill that expands the list of those who can qualify for tax incentives. Now, employees with an annual salary of more than €55,000 will be able to use the right to pay half the tax.
The tax credit will apply to both new employees and those already working in international business.
The duration of tax benefits will be increased by 7 years. Now new foreign employees have the right to use the benefits for 10 years.
Employees of foreign companies who already live and work in the country will be able to use the benefits only in one case — if they have lived abroad for at least 12 years before starting work in Cyprus.
If an employee of a company receives less than €55,000 per year, he can agree on a salary increase within two years from the start of the law. Then he will also have access to income tax benefits.
How to become a tax resident in Cyprus
There are two ways to get the status of a tax resident in the country. The first is standard: spend more than 183 days a year in Cyprus. Legally, this can be done if you obtain a residence permit or permanent residence in the country. The second way is the so-called 60-day rule. A foreigner can become a resident of the country if he:
received permanent residence in Cyprus;
owns residential property on the island;
spent 60 days in the country during the relevant tax year;
is not a tax resident of another state, that is, does not live in another country for more than 183 days a year;
runs a business or manages a company that is tax resident in Cyprus.
One of the ways to get a residence permit is to participate in the permanent residence investment program in Cyprus.
How to get permanent residence in Cyprus by investment
There is a state permanent residence program in Cyprus: investors can become residents by purchasing real estate or securities of the country from €300,000.
The investor has the right to buy residential or commercial real estate. If he chooses to purchase a commercial facility, then he will also have to buy or rent a home on the island. Under the terms of the permanent residence program, the investor must have a permanent address of registration in Cyprus.
It is allowed to buy one or two objects of the primary value of real estate for a total amount of €300,000. The investor also pays VAT: the standard rate is 19%, but when buying only one accommodation for the own residence, it is reduced to 5%. It is not possible to invest in resale property.
Immigrant Invest has its own base with verified real estate, including at the stage of excavation. It is possible to buy without commission.
Examples of investment properties in Cyprus
Immigrant Invest helps to obtain permanent residence in Cyprus for investment. If you want to become a tax resident of Cyprus and live on the island, please contact investment program experts for advice.