I've read that to get Cyprus non-dom you either need to form a company or register as self-employed. There's not much information out there on the latter. What are the advantages and disadvantages of getting non-dom via self-employed rather than by forming a company?
Cyprus Non-dom WITHOUT a company?
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That is not correct.
Everyone who isn't a Cypriot and who hasn't lived in Cyprus for 17 years is non-domicile. It has no importance whether you have a company or not.
If you move to Cyprus to work a regular job (employee), you may qualify for 50% reduction in taxable income,︀ if your salary is at least 55,000 EUR/year. I don't know if this applies if︁ you form a sole proprietorship. AFAIK, if you want to be self-employed, you also need︂ to be an employer. That requires forming a company.
The advantage with salary is that︃ you get access to the national healthcare system because you have to pay social insurance.︄ It's not the best, but it's an option you'll have available to yourself.
The disadvantage︅ is you have to pay social insurance and other payroll taxes. Those taxes are quite︆ high.
Everyone who isn't a Cypriot and who hasn't lived in Cyprus for 17 years is non-domicile. It has no importance whether you have a company or not.
If you move to Cyprus to work a regular job (employee), you may qualify for 50% reduction in taxable income,︀ if your salary is at least 55,000 EUR/year. I don't know if this applies if︁ you form a sole proprietorship. AFAIK, if you want to be self-employed, you also need︂ to be an employer. That requires forming a company.
The advantage with salary is that︃ you get access to the national healthcare system because you have to pay social insurance.︄ It's not the best, but it's an option you'll have available to yourself.
The disadvantage︅ is you have to pay social insurance and other payroll taxes. Those taxes are quite︆ high.
Does this mean, if I'm a personal investor with no formal job, and I'm neither a company owner nor a self employed, I would be still considered a non dom person with the non dom tax benefits? My goal is to generate passive income from my investments, either by receiving dividends from e.g.: Starbucks OR by selling shares few times a year and realizing capital gains.
Are you a Cypriot (through ancestry/family) or have you lived in Cyprus for 17 years? If you answered no to both questions, you're non-domicile.
Don't take my word it.︀ Speak with a Cypriot lawyer (there are some on this forum even). There are cases︁ where conducting investments personally can be considered professional activity and the income is viewed as︂ salary as opposed to dividends (or similar types of income which are exempt from taxation︃ for non-domiciled persons). If you instead do it through a company, it might not be︄ considered a professional activity of you personally.
It probably︇ comes across that way because it's such an attractive combination. Many of the websites where︈ you read about it are also hoping to sell you professional services like incorporation.
Don't take my word it.︀ Speak with a Cypriot lawyer (there are some on this forum even). There are cases︁ where conducting investments personally can be considered professional activity and the income is viewed as︂ salary as opposed to dividends (or similar types of income which are exempt from taxation︃ for non-domiciled persons). If you instead do it through a company, it might not be︄ considered a professional activity of you personally.
It probably︇ comes across that way because it's such an attractive combination. Many of the websites where︈ you read about it are also hoping to sell you professional services like incorporation.
I can verify that @Sols is correct. However, just a small correction, It will also apply for a Cyprus national in case its domicile of choice was abroad and lived abroad for a consecutive 20 years time.
For a foreign national the non-dom status can be achieved via 60days or 183days route with or without a company.
However, becoming tax resident of Cyprus by default you need to have a certain status to register for tax. The three options available are:
A company is not necessary for a passive investor earning income︀ from finanicial instruments. However, there is exposure as the social insurance office may consider active︁ trading in financial instruments as a badge of trade and be liable to contribute to︂ social insurance under self-employement rates of 15.6% social insurance and 4% NHS.
Having said that︃ each case may need to be revirewed in its own merits to establish a correct︄ setup and avoid exposures
For a foreign national the non-dom status can be achieved via 60days or 183days route with or without a company.
However, becoming tax resident of Cyprus by default you need to have a certain status to register for tax. The three options available are:
- Employee
- Self-employed
- Arbitrary registration for non-resident earning rental income from property in Cyprus
A company is not necessary for a passive investor earning income︀ from finanicial instruments. However, there is exposure as the social insurance office may consider active︁ trading in financial instruments as a badge of trade and be liable to contribute to︂ social insurance under self-employement rates of 15.6% social insurance and 4% NHS.
Having said that︃ each case may need to be revirewed in its own merits to establish a correct︄ setup and avoid exposures
I dont see any major exposures on obtaining the non-dom without a company. However, the first step before getting a tax number and non-dom certificate you will need to apply for a visa and in order to do so there are some requirements that you need to fulfil. Happy to PM if you need more info
a visa, for EU nationals too?
Cyprus is not yet part of Schengen, so flights to the island from a Schengen country have a border control, but would a visa be easier obtained for a EU than a non-EU citizen? I am asking as︀ I am a dual citizen EU/non-EU.
I am thinking about setting up a CY company︁ (freelance - Finance & IT) of which I'd be the only employee under the 60︂ day Non-Dom set-up.
Cyprus is not yet part of Schengen, so flights to the island from a Schengen country have a border control, but would a visa be easier obtained for a EU than a non-EU citizen? I am asking as︀ I am a dual citizen EU/non-EU.
I am thinking about setting up a CY company︁ (freelance - Finance & IT) of which I'd be the only employee under the 60︂ day Non-Dom set-up.
I would suggest to opt for a yellow slip (EU national permit MEU1) as the rights emanating from this are identical to Cyprus︀ citizens (right to work, to stay etc). While for non-EU nationals there are various permits︁ that can be obtained (work permit, temporary residence permit etc).
Just to note here that︂ non-EU nationals often opt for the temporary permit and slow track permanent residence permit. This︃ however would not grant the right to work for the company (you can just reside︄ on the Board as a non-executive unpaid Director).
Happy to assist if interest.
Just to note here that︂ non-EU nationals often opt for the temporary permit and slow track permanent residence permit. This︃ however would not grant the right to work for the company (you can just reside︄ on the Board as a non-executive unpaid Director).
Happy to assist if interest.
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