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An EU national, operating a successful consultancy company, sought a jurisdiction that combined tax efficiency, EU credibility, and a high quality lifestyle. With an international client base and no dependence on a physical location, Cyprus emerged as a natural choice for both business relocation and personal residency. The individual also held a personal investment portfolio which was discretionary managed by an EU Financial Institution.
After relocating to Cyprus, the individual became a Cyprus tax resident and incorporated a Cyprus private limited company to centralise operations. Cyprus’s EU-compliant legal system, competitive corporate tax rate (15%), and extensive double tax treaty network provided a strong foundation for international growth.
By introducing new equity into the business to support operating activities, the individual utilised the Notional Interest Deduction (NID) incentive and reduced the company’s effective corporate tax rate to 3%.
The business was structured to provide consultancy services to international clients, invoicing directly from Cyprus while meeting all required substance and compliance standards. By combining a director’s salary with dividend distributions, the owner achieved a highly optimised and fully compliant tax position. This included eligibility for the 50% income tax exemption on first salaried employment in Cyprus, full utilisation of the tax-free €22,000 income band and progressive income tax rates between 20% and 35%. This resulted in a clear, efficient structure that supported scalability and long-term planning.
In addition, the individual qualified for Cyprus’ highly attractive non-domicile regime, allowing dividends and interest income to be received tax-free for up to 17 years. Capital gains derived from disposal of securities were exempted from taxation.
Beyond the financial advantages, Cyprus offered a compelling lifestyle upgrade: a Mediterranean climate, excellent infrastructure, English-speaking professionals, and straight-forward access to EU markets. This case highlights how EU entrepreneurs can leverage Cyprus’ non-dom regime to enhance profitability, simplify operations, and enjoy an exceptional quality of life within a trusted EU jurisdiction.
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