Is Cyprus Residency the Best Option for Digital Nomads?
With a gorgeous location and many economic advantages, Cyprus is a country perfect for digital nomads and online entrepreneurs scouting for permanent residency and a place to set up a company.
Cyprus isn’t just a beautiful destination. It is also in a prime location in the EU that offers favorable systems for starting new business ventures. It also welcomes new residents with many benefits for company registration, attractive taxation, and fast Cyprus residency.
In this My Kypros Home article, discover how settling down in Cyprus can be rewarding as a digital nomad ready to cover your needs and expand your business. It just might be the strategic next step in your entrepreneurial journey.
Setting Up a Business in Cyprus – the Benefits
Ideally situated in the Mediterranean Sea, Cyprus has long been known for its history, culture, and landscapes. Surrounded by scenic mountains and nature, new Cyprus residents find themselves in the impressive territory.
Moreover, Cyprus isn’t just a perfect vacation spot. It is conveniently located for individuals interested in doing international business. As a member of the European Union (EU), Cyprus connects its residents to the rest of Europe as well as business partners in Africa and Asia. This island is home to strategic economic opportunities while maintaining low costs of living.
In fact, Cyprus was among the Forbes 2019 list of “Best Countries for Business” and Entrepreneur claimed it to be an “entrepreneurial paradise” for digital nomads and online entrepreneurs. The country is getting international attention by online entrepreneurs considering Cyprus company set-up with its welcoming business environment, easy company registration requirements, and incentivizing tax system. A Cyprus Ltd can be set up in a few short weeks and comes with the additional bonus of being a fully-licensed EU-business.
Cyprus company registration may be easy, but what about getting Cyprus residency for digital nomads and online entrepreneurs? The next section discusses more on the mere two months it takes to be granted tax residency for new Cyprus residents and how this makes life and business affordable within Europe.
Gaining a Golden Visa and Permanent Residency in Cyprus
Many people can remember as a kid reading about or watching children find Willy Wonka’s golden tickets. In reality, the Cyprus’ Golden Visa Program can be compared to finding a golden ticket. The program was revised in 2016 by the Cypriot government hoping to make it easier for non-EU citizens to invest in Cyprus by being granted permanent residency.
To meet the requirements for the Golden Visa Program, non-EU individuals must deposit a minimum of 30,000 Euro into a Cyprus bank for three years, demonstrate an annual income, and own residential property meeting a certain threshold value. Under the regulations of the program, individuals are not allowed to work while living in Cyprus after getting their visas. However, they are eligible to set up a company and receive tax-free dividends. Furthermore, any applicants approved who are married or with children can gain visas for their families as well.
Citizens of EU countries can stay in Cyprus for up to 3 months before needing to apply for a yellow slip, the official registration certificate for EU citizens. They do not need to apply for the golden visa. By simply setting up a company in Cyprus, they can become employed under the company and apply for the yellow slip. Pink slips are temporary residency certificates given to non-EU nationals that are either self-employed, receive employment in Cyprus, or invest in Cyprus real estate.
As a digital nomad, Cyprus makes it straightforward to navigate its immigration system and establish permanent residency. Further, Cyprus only requires an individual to stay in Cyprus at least 60 days annually to become a tax resident. For online entrepreneurs and those who travel for business, this provides ten months of travel time while still making the most of tax benefits. The “60 Day Rule” provides security and a favorable base for those whose business it is to travel and work away from home.
A Cyprus tax resident still needs to pay taxes on their worldwide income but there are many exceptions. For example, a Non-Dom tax resident does not need to pay taxes on international dividends, “passive” interest income, or profit from the sale of securities. New tax residents who decide to take a permanent employment opportunity in Cyprus and make an income higher than €100,000 receive 50% off their income tax for 10 years. Finally, 90 days annually of employment outside the country is exempt from taxation.
Under the “60 Day Rule,” digital nomads and online entrepreneurs interested in gaining tax residency will be considered non-domicile (Non-Dom). This means that they have not previously had a residency in Cyprus or are a Cyprus national. They can maintain tax resident status for up to 17 years before they are considered domiciled and have different tax requirements.
Immigration and taxation laws are clear and easy to navigate. Many digital nomads and online entrepreneurs are encouraged by the favorable policies and freedoms compared to that in other countries, all while having the stability of a home address. As banking and tax policies become more complex over time, digital nomads and online entrepreneurs can use their home address to receive utility bills and taxation certifications. These make it easier to open bank accounts and prove to national origin countries that taxes on income are being paid legally abroad.
The Advantages of Living in Cyprus Over Other Countries
Digital nomads are always on-the-go, but that doesn’t mean they have to sacrifice a vibrant home-base. Immersed in Mediterranean culture, Cyprus is a fascinating destination for tourists and residents alike. The 3rd largest island in the Mediterranean Sea, Cyprus has been home to many ancient civilizations and connects the continents of Europe, Africa, and Asia. With a high safety rating and a picturesque mildly warm climate, Cyprus is suitable for those searching for a healthy and relaxed lifestyle.
- Cost of Living
On average, it is 25% cheaper to live in Cyprus than other locales in Western Europe and the economy boasts high incomes. The quality of life and large volumes of cultural sites to enjoy maybe why over 100,000 other foreigners have already chosen to move to Cyprus.
- Barrier-Free Language
As the expat community thrives, language barriers typical of other cross-cultural communities are removed. Greek is the official language of Cyprus but almost everyone is capable of speaking and working in English. Other countries in Europe offering digital nomad residency present more communication obstacles that could make the process of moving and establishing a business more difficult.
- Advanced Healthcare
Another reason so many expats have relocated to Cyprus is its advanced healthcare. Beyond the restorative nature of the climate, the medical system of Cyprus meets international standards while keeping costs for services low. In 2019, the government revamped its’ National Healthcare Systems (NHS) and both citizens and tax residents are entitled to its services. As the healthcare system continues to improve, Cyprus is experiencing a large influx of medical tourists, from retirees to those seeking surgeries.
- Taxation and Immigration Policies
Taxation policy is still one of the largest influencing factors as to why so many are choosing to move to Cyprus. We have already discussed the “60 Day Rule” for becoming a tax resident, but the tax incentives continue to add up when compared to other countries.
Malta taxes at a higher rate than Cyprus and also includes a withholding tax. Cyprus does not. Further, Malta requires a stay of 6 months as opposed to the 2-month requirement in Cyprus.
Estonia developed a flat tax rate of 20%, much higher than that of Cyprus. Estonia does have a fairly easy residency program (e-residency) for non-EU nationals but it is limited to setting up a company. It does not provide for full residency.
Bulgaria has one of the lowest flat tax rates in Europe at 10%. However, there are more rules on how to gain residency in Bulgaria. For instance, individuals must reside in Bulgaria 183 days annually, have a permanent address, and demonstrate that the center of their vital interests is in Bulgaria. For digital nomads and online entrepreneurs, it can be tricky to prove that their vital interests are in Bulgaria.
Moreover, those in Bulgaria for study or medical treatment cannot count those periods of time towards the 183 days of residency. Thus, retirees and individuals interested in moving abroad for medical services would have a harder time establishing themselves as permanent residents in Bulgaria.
Still not sure about living in Cyprus? My Kypros Home compiled a list of 8 reasons how moving to Cyprus could transform your life, personally and professionally.
Ready to Find a Home in Cyprus?
Cyprus hospitality and economic climate make it one of the best countries for digital nomads and online entrepreneurs to permanently relocate to. Full of vibrant culture and attractive residency programs, Cyprus provides stability and ease for new residents. Digital nomads can work and enjoy all that Cyprus has to offer while being close enough to other interesting travel locales.
If you are a digital nomad interested in establishing Cyprus residency and want to learn more about company set-up, company registration, and accounting assistance, contact our team members at My Kypros Home and let us assist you in establishing your Cyprus residency and business venture. We can help you find a property in Cyprus, answer Cyprus real estate questions, learn more about establishing permanent residency, or get your company set up.