Cyprus has gained prominence as a prime location for individuals and businesses seeking a tax-friendly and transparent residency regime. The country’s modern tax laws, compliance with EU regulations, and extensive network of double tax treaties make it highly attractive for international tax planning. Here’s a closer look at what tax residency in Cyprus entails and how Forward Point Solutions assists clients in achieving a smooth transition.

Understanding Tax Residency in Cyprus

For Individuals: Cyprus tax residency is determined by either the 183-day rule or the 60-day rule.

• 183-Day Rule: Any individual who stays in Cyprus for more than 183 days within a calendar year is considered a tax resident.

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• 60-Day Rule: This alternative was introduced to cater to global entrepreneurs and expatriates.
  • To qualify:
    • The individual must spend at least 60 days in Cyprus during the year.
    • They must not reside in any other country for more than 183 days.
    • They should maintain a permanent residence (owned or rented) in Cyprus.
    • They should engage in business activities or hold an office in a Cypriot company.
    • They must not be tax resident in any other country.

For Companies: A company is tax resident in Cyprus if it is managed and controlled from within the country. This is typically demonstrated by:

• Holding board meetings in Cyprus.
• Having local directors who actively participate in decision-making.

Key Tax Benefits of Cyprus Residency

• Personal Income Tax:
  • Residents are taxed on a worldwide income basis with a progressive rate up to 35%.
  • Non-domiciled residents benefit from an exemption on dividends and interest income under the Special Defence Contribution (SDC) tax for up to 17 years.
• Corporate Tax:
  • Cyprus offers a competitive corporate tax rate of 12.5%, one of the lowest in the EU.
  • Foreign-sourced income is often eligible for exemptions or reduced rates through the country’s comprehensive double tax treaties.
• No Wealth or Inheritance Tax:
  • Cyprus does not impose wealth, inheritance, or gift taxes, making it appealing for estate planning.
• Capital Gains Tax:
  • Generally, Cyprus does not levy capital gains tax except on the sale of immovable property situated within the country.

How Forward Point Solutions Facilitates a Smooth Transition

1. Comprehensive Residency Guidance: Forward Point Solutions offers end-to-end advisory services for clients seeking Cyprus tax residency. From initial consultations to final residency registration, our team provides tailored solutions to meet each client's unique needs.

2. Property and Relocation Assistance: Navigating the local property market can be complex. We assist in identifying suitable residential properties—whether rented or purchased—ensuring compliance with residency requirements.

3. Business Establishment Services: For clients incorporating companies, we provide support in setting up compliant corporate structures, appointing local directors, and arranging board meetings to satisfy the management and control criteria.

4. Tax Planning and Compliance: Our tax experts help clients align their financial activities with Cyprus’s tax regulations. We provide guidance on:

• Registering for tax purposes.
• Understanding exemptions, like the SDC tax relief for non-domiciled residents.
• Adhering to annual reporting and substance requirements to maintain residency status.

5. Streamlined Application Processes: Navigating administrative procedures can be time-consuming. Forward Point Solutions takes care of the application paperwork, liaising with relevant Cypriot authorities to ensure timely and accurate submissions.

The Advantages of Choosing Forward Point Solutions

• Expert Knowledge: Our team is well-versed in Cyprus’s tax and regulatory landscape, providing expert advice backed by years of experience.

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• Tailored Solutions: We recognize that each client has unique circumstances. Our services are customized to fit individual and corporate needs for seamless integration into Cyprus’s tax system.

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• Ongoing Support: Beyond obtaining tax residency, we offer continuous support to ensure clients remain compliant, benefiting from the tax advantages Cyprus offers without administrative hurdles.

Cyprus stands as a beacon for individuals and corporations seeking a tax-efficient residency. The process can be complex without proper guidance, but Forward Point Solutions ensures that this transition is smooth, compliant, and beneficial. By offering comprehensive residency services, property assistance, business incorporation, and expert tax planning, we simplify the path to becoming a Cyprus tax resident.

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