When it comes to tax efficiency, few European countries can compete with Cyprus. Thanks to its Non-Domicile (Non-Dom) tax regime, foreign residents can legally reduce — or even eliminate — taxes on dividends, interest, and capital gains.

In 2025, Cyprus continues to be one of Europe’s most attractive tax residency destinations, especially for expats, entrepreneurs, and property investors seeking both lifestyle and financial freedom.

What Is the Cyprus Non-Dom Status?

The Non-Domicile (Non-Dom) status applies to foreign tax residents who live in Cyprus but are not originally domiciled there.

Once granted, this status offers significant tax exemptions for 17 years, making it ideal for new residents or investors relocating under the Cyprus Permanent Residency or Golden Visa schemes.

To qualify, you must:

Spend at least 60 days per year in Cyprus

Not be a tax resident elsewhere

Have a permanent home or rent property in Cyprus

Key Tax Benefits for Non-Dom Residents (2025)

1. No Tax on Dividends

Dividends received from either Cyprus or foreign companies are 100% exempt from the Special Defence Contribution (SDC).

Ideal for shareholders, investors, and business owners who earn passive income.

2. No Tax on Interest Income

Interest earned from bank deposits or overseas investments is also fully exempt from taxation under Non-Dom rules.

3. No Tax on Capital Gains (Except Real Estate in Cyprus)

Any profit from selling foreign shares, crypto, or overseas property is tax-free.

Only real estate located in Cyprus is subject to capital gains tax (20%).

4. Low Income Tax for Salaried Employees

Cyprus offers one of the lowest personal income tax systems in the EU:

Annual Income Tax Rate

Up to €19,500 0%

€19,501–€28,000 20%

€28,001–€36,300 25%

€36,301–€60,000 30%

Above €60,000 35%

New expats can claim a 50% income tax exemption for 17 years if they earn over €55,000 annually.

5. No Inheritance or Wealth Tax

Cyprus has no estate, inheritance, or wealth taxes, allowing families to preserve and pass on assets efficiently.

6. Double Taxation Treaties

Cyprus maintains double taxation agreements with over 65 countries, ensuring that income earned abroad isn’t taxed twice.

Example Scenario

An investor from Germany relocates to Paphos, becomes a Cyprus Non-Dom tax resident, and holds shares in a European company.

They receive €100,000 in dividends yearly — completely tax-free in Cyprus — while enjoying the island’s Mediterranean lifestyle.

Why Expats and Investors Prefer Cyprus

Beyond the tax benefits, Cyprus offers:

Year-round sunshine & EU lifestyle

English-speaking professional services (lawyers, accountants, banks)

Easy PR & Citizenship pathways

Access to EU healthcare and education

Combined with the Non-Dom tax regime, these factors make Cyprus a top-tier financial hub for global investors.

Final Thoughts

Whether you’re a business owner, investor, or remote professional, the Cyprus Non-Dom regime can transform your financial strategy.

With zero tax on dividends, interest, and capital gains — plus a Mediterranean lifestyle — it’s no wonder more expats are calling Cyprus home.