Cyprus has become one of the most attractive European destinations for foreign investors and professionals seeking a combination of low taxation, strategic EU access, and Mediterranean living.
This guide provides comprehensive expat investment advice in Cyprus covering residency by investment, non-dom tax incentives, property acquisition rules, banking procedures, and retirement planning.
It also outlines the latest regulatory changes, including VAT reforms, UBO-register deadlines, and banking compliance updates, to help expats invest and settle confidently.
My contact details are [email protected] and WhatsApp +44-7393-450-837 if you have any questions.
The information in this article is for general guidance only. It does not constitute financial, legal, or tax advice, and is not a recommendation or solicitation to invest. Some facts may have changed since the time of writing.
Cyprus no longer offers citizenship by investment, but it remains highly appealing through its residency-by-investment framework, known formally as Regulation 6(2) under the Aliens and Immigration Regulations.
This route offers permanent residency within months and serves as a base for long-term relocation, tax optimization, or future naturalization.
The Regulation 6(2) program is the most direct path for non-EU nationals seeking to establish residence in Cyprus. Applicants must invest at least €300,000 (plus VAT) in one of the approved categories:
Additional requirements include:
Applicants must pay at least €300,000 (plus VAT) before submission and provide title deeds or a sale agreement filed with the Land Registry. The program covers spouses and dependent children up to age 25, and approval usually takes 3–6 months.
Financially independent individuals who can demonstrate stable passive income (typically above €9,568 per year from abroad) may apply under Category F.
While slower and less formalized than the 6(2) route, it remains suitable for retirees without large capital outlays, provided they can prove self-sufficiency and have local accommodation.
To retain permanent-residence status, holders must visit Cyprus at least once every two years and maintain their qualifying investment.
If a property is sold and replaced, it must remain of equal or greater value and meet the same eligibility criteria.
Tax residency in Cyprus is crucial for expats planning to benefit from non-dom exemptions or shift their investment base. The country offers two residency tests:
Once tax resident, you can apply for non-domiciled (non-dom) status, which significantly reduces taxes on dividends, interest, and rental income — key advantages for investors and retirees alike.
Cyprus’s non-domiciled tax regime is one of the main reasons expats relocate to the island. It allows new residents to legally shield most forms of passive income from local taxation for up to 17 years after becoming tax resident.
This regime, combined with Cyprus’s extensive double-tax treaty network and moderate income-tax bands, creates one of the most competitive personal-tax frameworks in the EU.
A person is considered domiciled in Cyprus if they were born there, hold Cypriot citizenship with long-term residence, or have resided there for at least 17 of the past 20 years.
Anyone newly resident who does not meet these criteria qualifies as non-domiciled (non-dom).
For non-doms:
These benefits are especially attractive to entrepreneurs, asset managers, and retirees structuring investment income through Cyprus companies or foreign portfolios.
Overall, non-dom status allows expats to consolidate wealth and manage global investments efficiently, while retaining EU protection and regulatory certainty.
Real estate is the most popular investment route for expats in Cyprus, whether to meet the €300,000 minimum for residency or to diversify portfolios through property income and appreciation. Understanding local taxes, VAT rules, and legal frameworks is critical before purchasing.
Since 2023, Cyprus applies a tiered VAT regime for residential property:
Buyers must live in the property for at least 10 years to retain the reduced VAT rate; selling or renting it out earlier may trigger clawback of the difference.
Other relevant costs:
Limassol, Larnaca, and Nicosia remain leading real-estate hubs. Limassol attracts most luxury developments and foreign investors, while Larnaca and Paphos offer lower entry prices and better yields for rentals and retirees.
Demand remains stable, supported by infrastructure investment and relocation of tech and shipping firms.
Rental yields range from 4–6% for long-term rentals and higher for short-term or tourist lets, especially in coastal areas. However, new AirBnB rules and zoning controls require compliance with licensing standards.
Foreign buyers must secure approval from the Council of Ministers to register property in their name, a formality for most. However, expats are strongly advised to:
Done correctly, Cyprus property can serve as both an investment and a route to permanent residence, with relatively low taxes and long-term security under EU law.
For expats and investors, establishing a Cypriot bank account is essential for property payments, investment management, and everyday transactions.
The process is straightforward but highly regulated, as banks in Cyprus have tightened their compliance framework in line with EU and FATF standards.
Opening a bank account typically requires:
Applications can be made in person or through legal representatives, though remote account opening has become rarer. All banks now perform enhanced due diligence for politically exposed persons (PEPs) or applicants from high-risk jurisdictions.
Delays are common if source-of-funds documentation is incomplete, so it’s best to prepare full paperwork from the start.
Most local banks operate in English and offer mobile and online platforms compatible with SEPA transfers. International institutions like Bank of Cyprus, Hellenic Bank, and Eurobank Cyprus dominate the retail and corporate sectors, while AstroBank and RCB Bank serve niche and private clients.
Cyprus banks are covered by the Deposit Guarantee Scheme, protecting deposits up to €100,000 per depositor per bank, including accrued interest. Funds beyond that threshold can be diversified across separate banks or accounts under different legal entities for greater protection.
Investors using CySEC-regulated investment firms (CIFs) are also covered by the Investor Compensation Fund (ICF), which insures eligible retail clients up to €20,000 per firm (or 90% of the claim, whichever is lower). Note that professional clients and large corporate investors are excluded from this scheme.
Practical Advice for Expats
Despite tighter rules, Cyprus remains a reliable jurisdiction for banking and capital flows within the EU framework. For more guidance, please consult an expat financial advisor.
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Adam is an internationally recognised author on financial matters with over 830million answer views on Quora, a widely sold book on Amazon, and a contributor on Forbes.
This guide provides comprehensive expat investment advice in Cyprus covering residency by investment, non-dom tax incentives, property acquisition rules, banking procedures, and retirement planning.
It also outlines the latest regulatory changes, including VAT reforms, UBO-register deadlines, and banking compliance updates, to help expats invest and settle confidently.
My contact details are [email protected] and WhatsApp +44-7393-450-837 if you have any questions.
The information in this article is for general guidance only. It does not constitute financial, legal, or tax advice, and is not a recommendation or solicitation to invest. Some facts may have changed since the time of writing.
How to Apply for Cyprus Permanent Residence by Investment
Cyprus no longer offers citizenship by investment, but it remains highly appealing through its residency-by-investment framework, known formally as Regulation 6(2) under the Aliens and Immigration Regulations.
This route offers permanent residency within months and serves as a base for long-term relocation, tax optimization, or future naturalization.
The Regulation 6(2) program is the most direct path for non-EU nationals seeking to establish residence in Cyprus. Applicants must invest at least €300,000 (plus VAT) in one of the approved categories:
- Real estate – Purchase of a new residential property from a developer (resale properties do not qualify).
- Commercial property – Purchase of offices, shops, or hotels, either new or resale.
- Cyprus company investment – Shares in a Cyprus-registered company with at least five Cypriot or EU employees.
- Regulated fund investment – Units in a Cyprus-based Alternative Investment Fund (AIF) or Registered Alternative Investment Fund (RAIF).
Additional requirements include:
- Annual secure income from abroad of at least €50,000, plus €15,000 for a spouse and €10,000 per dependent child.
- Clean criminal record and medical insurance for all family members.
- Proof that funds originate from outside Cyprus.
Applicants must pay at least €300,000 (plus VAT) before submission and provide title deeds or a sale agreement filed with the Land Registry. The program covers spouses and dependent children up to age 25, and approval usually takes 3–6 months.
What is Cyprus Category F Residence?
Financially independent individuals who can demonstrate stable passive income (typically above €9,568 per year from abroad) may apply under Category F.
While slower and less formalized than the 6(2) route, it remains suitable for retirees without large capital outlays, provided they can prove self-sufficiency and have local accommodation.
How long do you need to stay in Cyprus for permanent residence?
To retain permanent-residence status, holders must visit Cyprus at least once every two years and maintain their qualifying investment.
If a property is sold and replaced, it must remain of equal or greater value and meet the same eligibility criteria.
Cyprus Tax Residency Rules
Tax residency in Cyprus is crucial for expats planning to benefit from non-dom exemptions or shift their investment base. The country offers two residency tests:
- 183-Day Rule – You are tax resident if you spend over 183 days in Cyprus within a calendar year.
- 60-Day Rule – You qualify with only 60 days of physical presence, provided that:
- You maintain a permanent home (owned or rented) in Cyprus;
- You conduct business or employment in Cyprus or hold an office in a Cyprus company;
- You are not tax resident in any other country during the same year.
Once tax resident, you can apply for non-domiciled (non-dom) status, which significantly reduces taxes on dividends, interest, and rental income — key advantages for investors and retirees alike.
Cyprus Non-Dom Tax Status and Income Tax Advantages for Expats
Cyprus’s non-domiciled tax regime is one of the main reasons expats relocate to the island. It allows new residents to legally shield most forms of passive income from local taxation for up to 17 years after becoming tax resident.
This regime, combined with Cyprus’s extensive double-tax treaty network and moderate income-tax bands, creates one of the most competitive personal-tax frameworks in the EU.
How Cyprus Non-Dom Status Works
A person is considered domiciled in Cyprus if they were born there, hold Cypriot citizenship with long-term residence, or have resided there for at least 17 of the past 20 years.
Anyone newly resident who does not meet these criteria qualifies as non-domiciled (non-dom).
For non-doms:
- No Special Defence Contribution (SDC) is charged on dividends or interest income. This exemption applies to both local and foreign sources.
- Rental income is also exempt from SDC (normally 3% on 75% of gross rent). Regular income tax still applies, but progressive rates begin only above €19,500 annually.
- Capital gains tax (CGT) is limited solely to real estate located in Cyprus and shares in companies holding such property. Sales of overseas shares, funds, or cryptoassets generally fall outside CGT scope.
- Employment income exemption: new tax residents earning over €55,000 annually from Cyprus employment can claim a 50% income-tax reduction for up to 17 years.
These benefits are especially attractive to entrepreneurs, asset managers, and retirees structuring investment income through Cyprus companies or foreign portfolios.
Tax Strategies for Expats in Cyprus
- Combine residency and non-dom status: Spending 60–183 days a year in Cyprus while maintaining a local address unlocks the full SDC exemptions.
- Route investments through Cyprus-resident holding companies: dividends flow tax-free to non-dom shareholders.
- Elect the flat 5% pension tax rate on foreign retirement income (above €3,420 yearly).
- Avoid double taxation: Cyprus maintains treaties with over 65 countries, reducing withholding taxes on cross-border dividends and interest.
- Retain clean documentation: as Cypriot banks enforce strict anti–money-laundering rules, proof of source and remittance is crucial to benefit from exemptions.
Overall, non-dom status allows expats to consolidate wealth and manage global investments efficiently, while retaining EU protection and regulatory certainty.
Buying Property in Cyprus as a Foreign Investor
Real estate is the most popular investment route for expats in Cyprus, whether to meet the €300,000 minimum for residency or to diversify portfolios through property income and appreciation. Understanding local taxes, VAT rules, and legal frameworks is critical before purchasing.
Since 2023, Cyprus applies a tiered VAT regime for residential property:
- 5% VAT applies to the first 130 m² of a buyer’s primary and permanent residence, provided the total value does not exceed €350,000, the total buildable area is below 190 m², and the overall transaction stays within a €475,000 threshold.
- 19% VAT applies on any area or value exceeding those limits, and investment or rental properties are always charged the full 19%.
Buyers must live in the property for at least 10 years to retain the reduced VAT rate; selling or renting it out earlier may trigger clawback of the difference.
Other relevant costs:
- Transfer fees: 3–8%, depending on property value, applied on secondary-market purchases without VAT.
- Stamp duty: 0.15–0.2% of contract value.
- Local property taxes: abolished since 2017, though municipal fees and refuse charges remain modest.
Cyprus Investment Potential and Market Outlook
Limassol, Larnaca, and Nicosia remain leading real-estate hubs. Limassol attracts most luxury developments and foreign investors, while Larnaca and Paphos offer lower entry prices and better yields for rentals and retirees.
Demand remains stable, supported by infrastructure investment and relocation of tech and shipping firms.
Rental yields range from 4–6% for long-term rentals and higher for short-term or tourist lets, especially in coastal areas. However, new AirBnB rules and zoning controls require compliance with licensing standards.
Foreign buyers must secure approval from the Council of Ministers to register property in their name, a formality for most. However, expats are strongly advised to:
- Use an independent lawyer (not the developer’s) to verify title deeds, planning permissions, and encumbrances.
- Ensure the property is within the Republic of Cyprus, not in the Turkish-controlled north. Purchases in Northern Cyprus carry serious legal risks: ownership disputes, unenforceable deeds, and exposure to international litigation.
- Keep contracts properly stamped and lodged with the Land Registry to secure ownership rights.
Done correctly, Cyprus property can serve as both an investment and a route to permanent residence, with relatively low taxes and long-term security under EU law.
Opening a Bank Account in Cyprus
For expats and investors, establishing a Cypriot bank account is essential for property payments, investment management, and everyday transactions.
The process is straightforward but highly regulated, as banks in Cyprus have tightened their compliance framework in line with EU and FATF standards.
Opening a bank account typically requires:
- Passport and residence permit (or proof of application).
- Proof of address (utility bill, lease agreement, or title deed).
- Proof of income or source of funds (employment contract, dividend statement, property sale, or investment portfolio).
- Tax identification number from your home country.
Applications can be made in person or through legal representatives, though remote account opening has become rarer. All banks now perform enhanced due diligence for politically exposed persons (PEPs) or applicants from high-risk jurisdictions.
Delays are common if source-of-funds documentation is incomplete, so it’s best to prepare full paperwork from the start.
Most local banks operate in English and offer mobile and online platforms compatible with SEPA transfers. International institutions like Bank of Cyprus, Hellenic Bank, and Eurobank Cyprus dominate the retail and corporate sectors, while AstroBank and RCB Bank serve niche and private clients.
Cyprus banks are covered by the Deposit Guarantee Scheme, protecting deposits up to €100,000 per depositor per bank, including accrued interest. Funds beyond that threshold can be diversified across separate banks or accounts under different legal entities for greater protection.
Investors using CySEC-regulated investment firms (CIFs) are also covered by the Investor Compensation Fund (ICF), which insures eligible retail clients up to €20,000 per firm (or 90% of the claim, whichever is lower). Note that professional clients and large corporate investors are excluded from this scheme.
Practical Advice for Expats
- Use EU-licensed brokers and funds when investing through Cyprus.
- Keep funds trail clean: transfers from opaque or offshore sources trigger compliance reviews.
- Expect periodic KYC updates—banks must reconfirm customer information every few years.
- Maintain realistic balances within the insured limit unless the bank is explicitly used for business operations.
Despite tighter rules, Cyprus remains a reliable jurisdiction for banking and capital flows within the EU framework. For more guidance, please consult an expat financial advisor.
Pained by financial indecision?
Become my client
Take client eligibility quiz
Contact
Adam is an internationally recognised author on financial matters with over 830million answer views on Quora, a widely sold book on Amazon, and a contributor on Forbes.