Articles

Non-EU Citizens: Starting a new or second-home in Cyprus?

26 Sep 2020 By Artemios Michael Mallas

Non-EU Citizens: Starting a new or second-home in Cyprus?

With many neighbouring nations facing political and financial instability, it is no surprise that households are seeking a new or second home for their family. The past few months, the island has seen a high influx of Lebanese families and companies in search of a way-out from the current situation in Lebanon. Panayiotis Z. Toulouras LLC is able to assist clients from start to finish as they relocate or set up a second home here in neighbouring Cyprus.

Residency programs allow individuals to live freely and enter into Cyprus, as legally residing citizens of Cyprus, allow them to provide their children a high quality education and a safer way of life for the whole family. The programs allow individuals the opportunity to engage in a Cyprus business as a co-shareholder or the option of establishing a Cyprus Company as a sole shareholder. Individuals and companies in Cyprus are able to benefit from Cyprus’ tax advantages.

Two main types of Permanent Residency

  • Category 6.2 (Fast Track Permanent Residency)
  • Permanent Residency Category F (Normal Option)

A) Category 6.2 (Fast Track Permanent Residency)

Requirements – To be eligible the applicant must:

  1.  Purchase a property in Cyprus for €300.000: 
  • The applicant must buy a new house or apartment or any of the combinations stated below, from a development company for the minimum amount of €300.000 plus VAT (VAT of 5% for the first property bought for own use)
  • The payment must be executed into the Seller’s bank account in Cyprus. (We are able to assist in presenting various property options according to your needs and requests and finalising purchase)

Note: Properties under construction can be included.

Note: Property can also be bought in a company’s name if the actual owner or ultimate beneficiary will be the applicant or their spouse.

2.   Have an Annual Income:

  • The applicant must prove an annual income from abroad of minimum €30.000
  • This is increased by €5.000 for each dependent (e.g. children and spouse)
  • This is also increased by €8.000 for each dependent parents or parent-in-law
  • If all above is satisfied the above family members can apply and get the permanent residence permit

Note: It can be any income deriving from salaries, pensions, dividends, fixed deposits, rents etc.

3.   Deposit in a Cyprus bank: 

  • The investor must transfer from abroad to their Cypriot Bank account. (We are able to assist in the setting up of a bank account)
  • The amount of €30.000, will be pledged for three years. It cannot be used until after 3 years.

Family members

  1. The Permanent Residency permit covers the spouse and children up to 18 years old
  2. Also, children between 18 and 25 years old are able to apply as long as they are financially dependent on the applicant and are unmarried
  3. The Permanent Residency is kept by the children for life even if they exceed the age of 25 or do not continue to fulfil the above terms )e.g. unmarried, students, financially dependent)

Note: Only Fast Track Residency allows parents and parents-in-law of the applicant to also get a Permanent Residency without buying an additional property 

Conditions and Restrictions

  1. The holder must visit Cyprus once every two years. If not, the residency permit will be cancelled automatically
  2. The holders of Permanent Residency are not permitted to work in Cyprus. However, they can live in Cyprus as shareholders in a Cypriot Company, which are able to undertake business in Cyprus or abroad, and also receive dividend income from companies. (We are able to assist in the Company incorporation)

Duration

  • Application process: 2-3 months (Fast-Track)
  • Application Approval Rate 100%

B) Permanent Residency in Cyprus Category F (not Fast Track)

Requirements – To be eligible the applicant must:

  1. Purchase a Property in Cyprus – Category F residency is flexible and does not have a strict requirement of property purchase as a rental may also be possible:
  • However, it is always recommended to buy a property in Cyprus of any amount. (We are able to assist in presenting various property options according to your needs and requests and finalising purchase)
  • It can even be a resale property (not new) purchased
  • The money for the purchase does not need to be transferred from abroad

2.   Have an Annual income:

  • The applicant must show an annual income of at least €9.568 for one applicant, plus €4.613 for each dependent person.
  • This income must come from abroad

Note: It can be any income deriving from salaries, pensions, dividends, fixed deposits, rents etc.

3.  Deposit in a Cyprus bank:

  • The applicant should have deposited in a bank account in Cyprus an amount of approximately €15.000 to €20.000. (We are able to assist in the setting up of a bank account)
  • Unlike the Fast-Track application, the deposit is not pledged, and the money can be used after the application is submitted

Family members

  1. Only children up to the age of 18 years old are allowed to apply as a dependent
  2. Their permanent residency will be valid only until they become 18 years old
  3. The parents or parents in law of the applicants cannot apply as dependents

Conditions and restrictions of the permanent residency program

  1. The holder must visit Cyprus once every two years.If not, the residency permit will be cancelled automatically.
  2. The holders of Permanent Residency are not permitted to work in Cyprus. However, they can live in Cyprus as shareholders in a Cypriot Company, which are able to undertake business in Cyprus or abroad, and also receive dividend income from companies. (We are able to assist in the Company incorporation)

Duration

  • Processing time about 12 months
  • Application Approval Rate 100%

Advantages of Residency Programs: 

Cyprus, located between three continents – Africa, Europe, Asia – is a proud member of the Eurozone and home to around 1 million people. Since 2014, Cyprus has been experiencing strong and rapid growth and is fast becoming an appealing destination for Non-EU citizens.

Cyprus is considered special instantly by all new visitors. The island possesses the best of everything, from democracy and security to Europe’s best climate . The island’s small size and Mediterranean way of life means you and your family get to experience a stress-free daily life, away from the hustle and bustle that you will find in bigger countries.

The island will be a safe haven for you and your family to build a home and start the European dream.

1. The Cyprus Tax Regime

Corporate Tax

The Cyprus tax regime has a long list of tax advantages aiming to benefit companies and individuals situated in Cyprus

A company is considered to be a Cyprus tax resident if it is managed and controlled from Cyprus. Worldwide business profits of a Cyprus tax resident company will be subject to a corporation tax of 12.5% with a number of other tax advantages that companies can benefit from:

  • Dividend income is in general exempt from tax irrespective of its source
  • Cyprus does not impose income or capital gains tax on profits and gains from the disposal of shares, bonds, debentures
  • Cypriot companies are exempt from taxation on foreign exchange (FX) gains
  • No withholding tax is imposed on interest and on royalties paid from Cyprus in respect of intellectual property used outside Cyprus
  • Dividends paid to non-resident shareholders are exempt from withholding tax in Cyprus
  • Profits of a permanent establishment maintained abroad are generally exempt from tax in Cyprus

Personal Tax

  • Individuals who spend more than 183 days in Cyprus are considered a tax resident of Cyprus
  • A Cypriot tax resident individual is subject to income tax on his/her worldwide income whereas a non-Cypriot tax resident individual is subject to income tax only on Cyprus sourced income
  • Tax exemption on dividends and interests earned by non-domicile

Double Taxation Treaties

Cyprus has currently tax treaties with more than 60 countries, including countries in North America, Europe, Africa, the Middle East. Treaties provide two advantages:

  1. protection from double taxation on the same income from two states
  2. protection against excessive foreign tax

2. Schengen Area

While holding a Cyprus Permanent Residency, Non-EU applicants can easily apply for a Schengen visa and travel across Europe. This will allow you to have less hurdles previously found in your country of origin.

3. Location, Location, Location

Cyprus’ location is very strategic as it is positioned between Europe, Africa, and Asia, with the island’s two international airports linking Cyprus to all major airports:

  • London – 4 hours 30 minutes (Direct)
  • Paris – 4 hours 15 minutes (Direct)
  • Frankfurt – 4 hours (Direct)
  • Zurich – 3 hours 30 minutes (Direct)
  • Dubai – 3 hours 30 minutes (Direct)
  • Doha – 3 hours 30 minutes (Direct)
  • Beijing – 13 hours (1 stop)
  • New York – 11 hours 30 minutes (1 stop)
  • Singapore – 10 hours 40 minutes (1 stop)

 4. Quality Workforce

  • Benefit from the local impressive skilled workforce Cyprus has to offer, direct access to a great pool of talent from other EU countries
  • Benefit from programs allowing international professionals to easily relocate
  • Almost half of the workforce in Cyprus have a tertiary degree, predominantly from the UK. – one of the highest in the EU. More Cypriots earn degrees from foreign universities than any other EU country

5. Operational Costs

Launching a business in Cyprus reduces your overall set-up costs compared to other EU countries resulting in more budget being allocated for growth and development of your business.

  • Lower labor costs and lower office rent than other EU countries, so you can set up a business a lot cheaper than the rest of Europe
  • Low business and high quality support costs – services like I.T., accounting, legal, etc.

6. Member of the EU

As a proud member of the European Union Full access to European Markets with free movement of goods, services, capital, along with access to 40+ EU trade agreements with countries outside the E.U.

Cyprus’ legislation is fully compliant with the EU legislation. European Union directives can be fully transposed into Cyprus legislation and EU regulations have direct effect and full application in Cyprus.

7. Life in Cyprus

When considering where to relocate, it is always vital to consider the quality of life you aim to have for you and your family. Choosing Cyprus ensures your company enjoys a Mediterranean island that provides a very high standard of living that includes:

  • One of the EU’s best all-year climates and one of the best worldwide,
  • Over 65 Blue Flag status beaches for all tastes (highest % per capita) sports, entertainment, etc, High level public & private healthcare services,
  • Short distances – can travel from one side of the island to another in 2 ½ hours Considered one of the world’s safest countries with one of the lowest crime rates in EU, Reasonable cost of living with great choice fresh products always available – both local and international
  • According to the European Environmental Agency, Cyprus also has the cleanest beaches in Europe
  • Real Estate available to cater all needs – city center, skyscraper, beach, countryside, etc
  • High Level of Education – many private schools and private institutions offering a high level of education in English for your children

What we do

Panayiotis Z. Toulouras LLC provides corporate and immigration services to clients worldwide. Our law firm, with the assistance of our vast network of associates, provides strategic advice spanning all aspects of Real Estate acquisition, Company set-up, Relocation services and Tax Planning.

  • Relocation assistance and advice
  • Real Estate acquisition or rental
  • Citizenship Applications
  • Permanent Residency Applications
  • Employment permits
  • Registration of international companies for the employment of foreign individuals
  • Visas
  • Advice on all related tax aspects
  • Facilitating online bank facilities
  • Processing of investment and lending facilities
  • Opening of private and corporate bank accounts

Contact us today for all information

Address: Faneromeni 106, Office 201, 6031, Larnaca, Cyprus

Telephone: +357 24 623 800   Fax: +357 24 332 991

Email: [email protected]

Website: www.toulouraslaw.com