Starting a business in
🇨🇾Cyprus
Checked November 4, 2026 · How we score
Corporate tax
15%
Top income tax
35%
Setup from
$1,800
all-in, first year
Time to form
14 days
can be done remotely
Taxes in Cyprus
| Corporate income tax | 15% 15% from 1 Jan 2026 (previously 12.5%). IP box gives an effective rate of about 2.5%; dividend income and share-sale gains are generally exempt; notional interest deduction on new equity. |
|---|---|
| Personal income tax (top) | 35% Reformed in 2026: tax-free allowance raised to EUR 22,000 and top 35% above about EUR 72,000. Employment income of EUR 55k+ earned by non-residents who relocate to Cyprus may be 50% exempt in some cases. |
| Tax system | Worldwide income |
| Capital gains tax | 20%20% only on gains from Cyprus immovable property (and shares of companies owning it). Gains on securities are exempt. |
| Dividend withholding (non-residents) | 0% |
| VAT / GST | 19% |
| Social security | Employee 8.8% and employer 8.8% social insurance plus GESY health contributions (2.65% employee, 2.9% employer). Special Defence Contribution on dividends for tax-resident and domiciled individuals is 5% from 2026 (non-doms exempt); the deemed-distribution rule was abolished for new profits. |
Forming a company in Cyprus
| Usual entity | Private company limited by shares (Ltd) |
|---|---|
| Minimum capital | $1 |
| Setup cost (all-in) | $1,800–$4,000 |
| Annual running cost | $4,000–$9,000 |
| Time to incorporate | 14 days |
| Form remotely as a foreigner | Yes |
| Local director required | No |
| Local address required | Yes |
| Owners on public register | Yes |
| Statutory audit for small companies | Yes |
| Business banking for non-residents | Hard |
Residency and visas
Digital nomad visa needs about EUR 3,500/month net income. Permanent residence via a EUR 300,000 real-estate purchase remains open; the citizenship-by-investment scheme was closed in 2020.
| Digital nomad visa | Cyprus Digital Nomad Visa, $4,000/month income |
|---|---|
| Golden visa | Yes, from $345k |
| Ease of residency for founders | 2/5 (1 = easiest) |
Special tax regimes
Non-dom status
Non-domiciled tax residents pay no Special Defence Contribution on dividends, interest or rent for up to 17 years; the 2026 reform allows extensions in 5-year blocks with a EUR 250,000 lump sum.
IP Box
80% of qualifying IP profit is exempt, giving an effective corporate rate of about 2.5%.
60-day rule
Individuals can become Cyprus tax resident with 60 days of presence if they meet business and housing conditions.
Notional interest deduction
A deduction on new equity capital, reducing the effective rate further for capitalised companies.
Pros and cons
Why founders pick Cyprus
- 15% corporate tax with IP-box and NID reducing effective rates
- Non-dom regime exempts dividends and interest from SDC
- Wide tax-treaty network and EU Parent-Subsidiary access
- English widely used in business and company law
Watch out for
- Statutory audit is mandatory for all companies
- Bank accounts are difficult and slow for non-resident owners
- Frequently labelled an EU tax haven / conduit by NGOs
- Need real substance (local directors, office) to be recognised as tax resident
- Corporate tax rose to 15% in 2026
Best for: Holding and IP companies using the IP box · Founders who want a non-dom EU base · Shipping and trading groups
Cyprus: common questions
What is the corporate tax rate in Cyprus in 2026?
15% from 1 January 2026, up from 12.5%. Qualifying IP profit can be taxed at an effective 2.5% under the IP box, and dividend income is generally exempt.
Is Cyprus still tax-friendly for non-doms?
Yes. Non-domiciled residents pay no defence contribution on dividends, interest or rental income for up to 17 years, and the 2026 reform allows further extensions in return for a lump sum. Personal income tax of up to 35% still applies to employment income.
Can a foreigner open a company in Cyprus remotely?
Yes. Service providers incorporate Cyprus Ltds for non-residents in 1–3 weeks and supply directors, a secretary and a registered office, but expect lengthy KYC. A bank account usually takes several weeks.
Is Cyprus a tax haven?
Cyprus is an EU member, off the EU and OECD blacklists, and compliant with Pillar Two. NGOs often list it as a corporate tax haven or conduit because of its low rate and treaty network, so banks apply enhanced due diligence.
What does the Cyprus digital nomad visa require?
Non-EU remote workers need about EUR 3,500 monthly net income, health insurance, proof of accommodation and clean criminal record. The permit is for one year and renewable for two more.
Sources
Compare Cyprus
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Not tax or legal advice. Rates and rules change; we check official sources and update every page, but verify with a licensed adviser in the country before acting. Spotted something out of date? Use the correction form below.