With a well-established non-domicile regime and the recent alignment of its immigration rules with the EU Blue Card Directive, Cyprus already offers EU-wide career mobility and stands out as one of the most attractive EU jurisdictions for highly skilled professionals. So what is next for attracting more global talent?

Tax optimisation and EU-wide career mobility through an enhanced dual regime

The February 2025 tax reform proposals, though not yet enacted, signal a commitment to enhancing an already competitive environment, introducing measures aimed at extending non-dom benefits, broadening residency eligibility and refining personal income taxation.

Together, these developments underscore Cyprus’s unique positioning at the intersection of low-tax living and full EU mobility. For tech founders, asset managers, and internationally mobile professionals, Cyprus offers a framework that is both robust today and set to become even more compelling.

Table of contents

• The upgraded non-dom regime

• Redefining tax residency rules

• EU Blue Card: your mobility pass

• Strategic outlook for professionals

• Final thoughts & future outlook

The upgraded non-dom regime

Cyprus’s non-domicile regime, launched in 2016, has become a leading incentive for high-net-worth individuals, international professionals, and entrepreneurs seeking tax efficiency within a European Union jurisdiction. The framework operates under the combined application of the Income Tax Law 118(I)/2002 (IT Law), the Special Defence Contribution Law 117(I)/2002 (SDC Law), and the Wills and Succession Law Cap 195 (W&S Law), all as amended. The 2025 proposed reforms retain the strategic advantage of the rules and introduce certain improvements.

The benefits for non-doms remain substantial:

• exemption from Special Defence Contribution (SDC) on dividends, interest, and foreign rental income

• no capital gains tax on securities (with the exception of Cyprus-based real estate)

• no wealth, gift, or inheritance tax

• income over €100,000 remains eligible for the 50% exemption for 10 years

Employment income attractiveness is now being enhanced; the tax-free threshold increases to €20,500. New personal deductions for families, mortgage interest, and green investments provide further tax planning opportunities, especially for those building a life in Cyprus. Moreover, the proposed reforms allow indefinite extension of non-dom status, subject to an annual fee. This replaces the previous 17-year cap, offering long-term fiscal planning security.

This evolution of the non-dom regime ensures Cyprus remains a long-term base for wealth preservation and a safe haven in an increasingly competitive EU tax environment.

Redefining tax residency rules

Cyprus currently offers two main residency routes:

• the 183-day rule, based on physical presence

• the 60-day rule, allowing tax residency with a shorter stay if you have economic ties and no other residency

Under the 2025 proposals, the 60-day rule is expanded to include individuals whose centre of business interests lies in Cyprus, even if their physical presence is minimal. This change shifts the emphasis toward economic substance over physical relocation; a major win for remote professionals and international entrepreneurs.

This makes Cyprus particularly attractive to:

• digital nomads managing global ventures

• startup founders looking to anchor operations in an EU jurisdiction

• executives coordinating group structures from abroad

In essence, the redefined rules break the traditional link between tax residency and constant presence, giving entrepreneurs far more flexibility in how they manage their time and tax exposure. To benefit, applicants must still demonstrate business operations or key economic decision-making located in Cyprus, and ongoing compliance with IT and SDC law through filings and declarations.

This change modernises Cyprus’s tax framework, aligning it with a global workforce increasingly untethered from fixed locations.

EU Blue Card: your mobility pass

As of 7 July 2025, Cyprus has implemented the EU Blue Card, aligning its immigration framework with Directive (EU) 2021/1883. This harmonised permit offers third-country nationals a clear route into the EU job market. Combined with the tax advantages Cyprus offers, it’s a compelling package.

Eligibility requires:

• a university degree or three years’ recent experience in a relevant field

• a binding offer of employment in ICT, pharma R&D, or shipping (excluding seafaring roles)

• a minimum gross annual salary of €43,632

Benefits of the Blue Card include:

• the right to live and work in Cyprus

• equal treatment with nationals in employment, education, and social security

• family reunification

• short-term travel within the EU (90 days)

• mobility to another EU Member State after 12 months of residence in Cyprus

This allows skilled professionals to not only secure a favourable tax base but also leverage EU-wide mobility for business or career growth.

Combined with the non-dom regime, the Blue Card transforms Cyprus into a regional gateway—one where talent can establish, grow, and scale cross-border ambitions with minimal friction.

Strategic outlook for professionals

The combination of a more flexible residency framework, an extended non-dom regime, and a fully functional Blue Card system puts Cyprus in a league of its own.

Subject to the official adoption of the proposed reform:

• non-dom status can now be maintained indefinitely with a fee, offering certainty rare in EU tax law

• residency via economic interest frees professionals from the need to physically relocate

• new deductions support family life, real estate investment, and green upgrades—aligning tax incentives with personal priorities

• the corporate tax rate may increase to 15%, but strategic advantages remain via extended loss carryforward (from 5 to 10 years) and continued support for IP Box, Notional Interest Deduction, and Tonnage Tax regimes

Whether you’re relocating as a professional or scaling a business through Cyprus-based entities, these changes empower you to structure your affairs with predictability, compliance, and efficiency.

Final thoughts & future outlook

Cyprus’s 2025 reforms are more than just technical updates—they represent a broader vision for economic competitiveness. By expanding access, rewarding substance, and aligning incentives with modern lifestyles, Cyprus offers a model worth watching.

For professionals seeking an EU base without punitive tax consequences, or for businesses aiming to attract and retain top global talent, the updated framework presents an increasingly compelling proposition.

The true potential lies in combining available instruments: Blue Card access, non-dom optimisation, and carefully structured long-term planning. With the legal and fiscal tools firmly in place, the jurisdiction enables strategic decision-making that balances compliance, opportunity, and resilience across shifting international environments.

For tailored legal guidance on non-dom planning, EU Blue Card applications, or cross-border structuring, contact our team at Chrysses Demetriades & Co LLC at info@demetriades.com.

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