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Privacy Management Group
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61-63 Lord-Byron-Street
Office 501 / 502, 5th Floor
6023 Larnaca, Cyprus
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  • NON-DOM Programme for Cyprus (The Republic of Cyprus)

    EU member state Cyprus introduces SUBSTANTIAL TAX ADVANTAGES for well off expats.

    To enhance the economical development the Republic of Cyprus has adopted a far-reaching tax reform.

    Especially for international entrepreneurs that plan to move their residence to Cyprus in the future - the so-called Cyprus Non-Dom Programme has immense fiscal advantages.

    The Non-Domicile Programme Cyprus for international private individuals

    Goal of the Cyprus Non-Dom Programme and the respective new regulation is to let more international entrepreneurs and wealthy private individuals reside in Cyprus. This step is supposed to help to improve the economical situation of the country and to secure the position as a junction of international economy.

    Non-Dom Cyprus

    The old tax regulations of Cyprus till July 2015

    Until July 2015 passive income of taxpayers in Cyprus was taxed at a tax rate of 17% on dividends, 30% on interest income and 80% of rental income according to the income tax bracket plus defence tax.

    This comparably high taxation led to the result that wealthy private individuals and entrepreneurs from abroad had no economical appeal to move their residence to Cyprus. The country faced this challenge with a far-reaching tax reform, which formed an inspiration for international entrepreneurs and wealthy private individuals.

    NEW LEGISLATION PROVIDES ENORMOUS TAX ADVANTAGES FOR INTERNATIONALS IN CYPRUS

    Effective tax advantages through relocation to Cyprus

    Non-Dom Cyprus

    Expats (Non-DOM’s), which relocate their fiscal residence to Cyprus, benefit from a new tax legislation now.

    The term "resident but not domiciled", also called Non-Dom Cyprus, was passed as a law in July 2015, which offers far-reaching benefits for entrepreneurs and wealthy individuals from abroad.

     
    A brief description of the Non-Dom Programme Cyprus:

    Any non-Cypriot (Non-Dom), who relocates their fiscal residence to Cyprus, can generally benefit from Non-Dom Status in Cyprus:

    No tax on income from dividends:

    Since July 2015, expats (Non-Dom’s) with fiscal residence in Cyprus are exempt, due to the Non-Dom Programme, from the so-called SCD taxation in Cyprus.

    Dividend income, whether from domestic or foreign sources, are unconditionally and for 17 years exempt from taxation in Cyprus. Therefore, the tax for a dividend income for an in Cyprus living expat (Non-Dom) is now 0.00 percent.

    No taxes on interest income:

    An expat (Non-Dom) with fiscal residence in Cyprus is completely excluded, due to the Non-Dom regulation, from tax on interest income for 17 years. This also applies regardless of whether it is interest income of domestic or international origin.

    Special arrangements for rental income:

    Furthermore - within the framework of the Non-Dom Programme - income fromdomestic or international rentals have been newly regulated. Therefore the defence tax will be eliminated in future. We will be happy to inform you about the arising benefits.

    The location for businesses and private individuals within the EU

    Non-Dom Cyprus

    In addition to a lower corporate tax of 2.5% (20% of the regular corporation tax) for royalties received in connection with intellectual property rights held in Cyprus as well as the regular corporate tax of 12.5% on profits there are no other business taxes or surprises. Welcome to the business-friendly tax laws of Cyprus!

     

    CASE STUDIES

    Case study (1):

    An entrepreneur moves his fiscal residence to Cyprus (EU) and becomes a Cyprus Tax Resident (CTR).

    Non-Dom Cyprus

    A private non-Cypriot individual with a tax domicile in Cyprus enjoying Non-Dom status is exempt from taxation on dividend and interest income.

    Peter G relocates his residence with his family to Cyprus (Non-Dom).He sets up a company there and thus becomes a Cyprus Tax Resident. As an employee of his own company in Cyprus, Peter G gets paid an annual salary of 19,500 Euro (no personal income tax applies – tax free amount EUR 19,500 p.a.). He/the Cyprus company pays social insurance contributions and obtains a personal CY tax number.

    Peter G’s foreign companies distribute dividends, whenever appropriate, and Peter receives the dividends free of tax.

    Conclusion

    Income from employment is not taxed up to an annual amount of EUR 19,500. Salaries above EUR 100,000 per year are taxed at only half of the regular tax rate.

    All dividends received from the Cyprus entity, as well as all other dividends from domestic and international sources, are not taxed at all – they remain tax free.

    Case study (2):

    A wealthy private individual moves its residence to Cyprus

    Non-Dom Cyprus

    Thomas W has several international personal bank accounts. Terms such as EU-FATCA and OECD are well known to Thomas Was advised by his financial advisers and bank RM (relationship manager).

    Thomas decides to relocate his residence (Non-Dom) to Cyprus. He sets up a company and gets employed by his Cyprus company. Thomas obtains therefore fiscal residence in Cyprus and becomes a Cyprus Tax Resident (CTR) – see case study (1).

    As a second step - for asset protection purposes - which is completely in line with the Cypriot tax law (EU) - he presents his new fiscal residence address to his banks. As a result and in line with the international exchange of information regulations, the banks now report foreign bank accounts and interests to the Cyprus tax authorities. Thomas receives interests free of tax.

    Conclusion

    Interests received in Cyprus as a Non-Dom are exempt from taxation for 17 years. Due to his strategically wise decision - the company setup in Cyprus and employment contract due to the new legislation in Cyprus – Thomas W receives a a tax free income of EUR 19,500 including all social insurance benefits, as well as the tremendous advantage of nil taxation on all privately received dividends.

    Case study (3):

    Entrepreneur creates layers of security for assets and basis for tax benefits

    Non-Dom Cyprus

    Per L is an entrepreneur and owns several businesses. His income, his savings and his dividend income from entrepreneurial activity are highly taxed in his home country.

    Per L moves his residence to Cyprus, restructures his company on the mere payment of dividends and acquires the advantage of non taxation according to Non-Dom regulations in Cyprus.

    Apart from the fact that the weather in Cyprus is all year round almost perfect, Per is also motivated by the excellent international flight connections, the good and healthy Mediterranean life in Cyprus, the low cost of living and much more.

    Per is also a savvy businessman. He knows that it is always wise not to have all eggs in one basket. He establishes - apart from a company in Cyprus - yet another company in the United Arab Emirates with a business account in Dubai. Per created several layers of asset protection at one of the most financially sound and probably safest bank locations in the world. The Dubai bank itself opened for Per a second and third account with its offshore branch in Singapore and Jersey. He also enjoy sin addition to the weather and the high quality of life, the significant Non-Dom tax benefits and is also flexible enough now to respond to further changes in the global economy.

    Note:

    There are countless examples we could bring to your attention. The benefits are always similar, the possibilities nearly unlimited and the individual imagination can run freely to achieve the ultimate results. However, the basic requirement is relocation, the only legal way to succeed in the daily financial and political maze.

    MORE INFORMATION ABOUT THE NON-DOM PROGRAMME FOR CYPRUS

    Non-Dom Cyprus

    Cyprus is not a member of the Schengen Agreement and therefore not a Schengen country. The only way to gain a proper status of Non-Dom residence in Cyprus is to demonstrate a business and employment basis and ideally to own a company in Cyprus. To meet these requirements, it is strongly advised to establish a company in Cyprus, no matter if it is an active company or even a holding company, which manages its own assets and/or holds shares in domestic and international companies (tax exemption on dividend income).

    Income from employment within the framework of the Non-Dom Cyprus

    Non-Dom Cyprus

    We have mentioned several times before that it is advisable to establish a company in Cyprus to receive an easy ticket to the residency and also because of the social insurance status and the personal tax number.

    But we will point it out once again and add to our statements around the new laws regarding the Non-Dom Cyprus and payroll taxes.

    Who owns the Non-Dom status in the Republic of Cyprus, in accordance with the new regulations for "new housing residing internationals", enjoys in the future also tax reductions on income from employment.

    Additional Benefits in Short. Non-Dom Status expats, employed by a Cyprus company, earning more than EUR 100,000 per year are entitled to an income tax cut of 50% thus paying only half of the income tax in their tax bracket. We are confident that this will represent a further incentive for you to consider a timely relocation to Cyprus.

    FROM ADVICE TO ACTION

    Privacy Management Group

    Non-Dom Cyprus

    We are delighted that you are interested in our services. We earn the loyalty of our high-quality customers by providing them with industry-leading products, services, rewards and benefits.

     

    Good is the enemy of great

    Non-Dom Cyprus

    A global leader in customer service, we strive to understand our customers, treat them with respect, and go the extra mile to help them. Our name stands for security, service and recognition. This reputation attracts customers and business partners, inspires our staff and is valued by customers.

    There’s a reason why we call our customers business partners. We treat them as business partners. Our business partners value the personal recognition they receive from Privacy Management Group, the care they receive wherever they are, whenever they need us.

    Privacy Management Group is certified by the Institute of Certified Public Accountants of Cyprus. Moreover, all departments of the company voluntarily undergo an annual quality control by the international TUV NORD. All services have been certified according to ISO 9001:2008. The last audit was successfully conducted in May 2016.

    OUR SERVICES OFFERED TO YOU

    Privacy Management Group gives advice on international relocation matters. We are specialised in Cyprus and the United Arab Emirates.

    The scope of our services covers all business, personal, legal, and also tax matters, which are in connection with the establishment of a residence, company registrations in Cyprus, Cyprus Non-Dom Status and ongoing support and advice in Cyprus.

    We advise and refer you to our local partners regarding property rentals and purchases.

    Our friendly staff will assist you in the search of a suitable property, school and educational matters, offer guidance on social insurance and health insurance, work and residence permits and tax issues.

    If you think about relocating to Cyprus ask us. We will accompany you every step of the way.

    Legal Information and Terms of Use

    We would like to point out that earnings generated abroad may be liable to taxation in your home country. We do not carry out legal and tax advisory.
    You are solely responsible for the fulfilment of your tax obligations. Please inform yourself of any existing tax responsibilities in your country of residence with the aid of a trusted tax advisor or lawyer. Please take note of our "Terms & Conditions".

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