1. Why Cyprus Appeals to International Founders and Executives
Cyprus has developed into an attractive European base for international founders, consultants and globally mobile executives. As a member of the European Union, it offers a well-established legal and business environment, access to the EU market and strong commercial links with the United Kingdom, the Middle East and other international markets.
For non-EU entrepreneurs, Cyprus offers the possibility of combining a business presence with the right to reside and work in the country. Through the “Company with Foreign Interests” framework, qualifying founders may establish and operate a Cyprus company, obtain residence and employment permits, and relocate eligible family members.
This business and immigration framework can also be combined with Cyprus tax residence and, where the relevant conditions are satisfied, “non-domiciled” status. The result can be a compelling structure for founders seeking an EU business base, lawful residence and employment rights, and potentially favourable personal tax treatment.
2. The Foreign Interest Company and Non-Dom at a Glance
The route brings together three distinct elements: a Cyprus company, residence and employment rights, and personal tax residence.
In broad terms, the process involves:
- incorporating a new Cyprus company or using an existing one;
- registering the company as a Company with Foreign Interests;
- employing the founder through the company and obtaining the appropriate residence and employment permit;
- obtaining residence permits for eligible family members;
- establishing Cyprus tax residence under the 183-day or, where applicable, the 60-day rule; and
- claiming non-domiciled status, provided the relevant conditions are satisfied.
These elements are connected but legally separate. Incorporating or registering an FIC does not automatically establish personal tax residence or non-dom status. Equally, Cyprus tax residence does not itself create a right to live or work in the country. Each part must therefore be properly structured and implemented.
3. What Is a Company with Foreign Interests?
A Company with Foreign Interests or “FIC”, is not a separate type of legal entity. It is ordinarily a private Cyprus company limited by shares which, after satisfying the applicable eligibility criteria, is entered in the official Register of Companies with Foreign Interests.
The regime is intended to encourage genuine foreign investment and business activity in Cyprus. Its principal immigration advantage is that a registered FIC may employ eligible highly skilled nationals from outside the EU and EEA under a simplified fast track procedure. This may include the company’s founders, shareholders, directors and other qualifying executives or specialists.
Incorporating a Cyprus company does not automatically give it FIC status. Following incorporation, an application must be submitted, supported by evidence of the company’s foreign ownership or investment, source of funds, business activities and operating presence in Cyprus.
4. Who Is the Route Designed For?
The FIC route is primarily designed for non-EU founders, entrepreneurs and business owners who wish to establish a genuine commercial presence in Cyprus and actively work through their Cyprus company.
It may be particularly relevant to:
- founders and owners of international businesses;
- consultants and professional advisers serving clients outside Cyprus;
- technology, software and other digital-business founders;
- executives relocating part of a business or its management to Cyprus; and
- foreign companies establishing a Cyprus subsidiary, branch or operational presence.
The regime can be especially attractive where the founder requires lawful residence and employment rights while continuing to develop an internationally focused business from Cyprus.
In certain instances, it may not, however, be necessary or proportionate for someone seeking only passive residence without intending to conduct genuine business activities in Cyprus. In that case, another immigration route -such as a visitor residence permit- may be more appropriate, depending on the individual’s circumstances and whether they intend to work.
5. The €200,000 Investment Requirement
A central requirement for registration as a Company with Foreign Interests is an initial investment of at least €200,000 in the Cyprus company. This is a company-level investment intended to demonstrate genuine foreign capital and a commitment to operating a business in Cyprus.
The requirement may ordinarily be satisfied by depositing €200,000 by one shareholder or collectively by several shareholders, into an account held in the company’s name with a credit institution licensed by the Central Bank of Cyprus. An account with a payment or electronic-money institution is not sufficient for this purpose.
Alternatively, the investment may be evidenced through qualifying expenditure incurred for the company’s operations in Cyprus, such as the acquisition of office premises, office equipment or machinery. Appropriate evidence must be submitted, including bank statements, SWIFT confirmations, invoices and receipts issued in the company’s name. Under the current criteria, the investment must generally have been made within the six months preceding the FIC application.
The €200,000 is not generally required to remain frozen after FIC registration. Once the company has been approved, the funds may ordinarily be used for genuine business purposes, including premises, equipment, personnel, professional services and operating expenses. The company should retain complete records showing how the money was introduced and subsequently used.
Importantly, the €200,000 is not a fee paid to the Cyprus Government and does not purchase a visa or residence permit. It remains an investment in, or expenditure of, the Cyprus company. FIC registration and the founder’s subsequent residence and employment application are separate stages, each subject to its own eligibility requirements and approval.
6. Business Presence and Substance in Cyprus
Registration as a Company with Foreign Interests requires a business presence in Cyprus. The company should have suitable operating premises and the basic infrastructure needed for its activities. A registered-office address alone would not be sufficient.
The company should carry on commercial activities, maintain proper banking and accounting records, enter into its own contracts and use its funds transparently for legitimate business purposes.
It must also complete the applicable tax, VAT, payroll and social-insurance registrations and maintain its annual corporate, tax, employment and immigration compliance.
The FIC framework is intended to support genuine foreign investment and business operations. The company should therefore not exist merely as an immigration vehicle.
7. Obtaining the Right to Live and Work in Cyprus
Registration of the company as an FIC does not, by itself, grant the founder a right to reside or work in Cyprus. It enables the registered company to employ eligible third-country nationals under the simplified FIC procedure. The founder must therefore enter into an employment relationship with the company and obtain a separate residence and employment permit.
To qualify as a highly skilled employee, the applicant must generally:
- hold a position appropriate to the company’s business activities;
- receive a gross monthly salary of at least €2,500;
- possess a relevant university degree, diploma or equivalent qualification, or demonstrate at least two years of relevant professional experience; and
- enter into an employment contract for a period of at least two years, normally for up to three years.
The application must be supported by the employment contract, evidence of qualifications or experience, company and FIC documentation, and the required personal, medical and immigration documents.
Subject to approval, the residence and employment permit may be issued for up to three years and may be renewed, provided that both the company and the employee continue to satisfy the applicable conditions.
Where properly structured, the founder may simultaneously act as the company’s shareholder, director and employee. These roles should nevertheless be properly documented and distinguished.
8. Bringing the Family to Cyprus
An eligible employee of a Company with Foreign Interests may generally be joined in Cyprus by their spouse or civil partner and dependent minor children through the family-reunification procedure.
Each family member must submit a separate residence application supported by the required identity, relationship, accommodation, financial, insurance and other documents. Marriage and birth certificates will need to be properly legalised or apostilled and, where necessary, officially translated.
Family permits are granted by reference to the status of the principal employee and cannot extend beyond the validity of that person’s residence and employment permit. They must be renewed while the family continues to reside in Cyprus and the principal employee remains eligible.
Residence as a family member does not automatically give every dependant the same employment rights as the principal applicant. The spouse or civil partner of a highly skilled FIC employee may generally access paid employment in Cyprus, subject to registration with the Migration Department and compliance with any requirements applicable to the particular position or regulated profession. This should be distinguished from self-employment or operating an independent business, for which separate requirements may apply. Dependent children obtain residence rights but not unrestricted employment rights.
Families should also plan for practical relocation matters, including suitable accommodation, private medical insurance or eligibility for registration with the General Healthcare System, and the children’s enrolment in a public or private school. Early preparation is particularly important because civil-status documents, legalisation, insurance and school-placement arrangements may require time to complete.
9. From Immigration Residence to Cyprus Tax Residence
Immigration residence and tax residence are separate legal concepts. A residence and employment permit authorises an individual to live and work in Cyprus, but it does not automatically make that person a Cyprus tax resident. Tax residence must be established independently under the applicable day-count and connecting-factor tests.
Under the 183-day rule, an individual is treated as a Cyprus tax resident if they spend more than 183 days in Cyprus during the relevant calendar year.
Alternatively, an individual may qualify under the 60-day rule if, during the same calendar year, they:
- spend at least 60 days in Cyprus;
- do not spend more than 183 days in any other single country;
- carry on a business in Cyprus, are employed in Cyprus or hold an office -such as a directorship- in a Cyprus tax-resident company, with that connection continuing as required throughout the year; and
- maintain a permanent home in Cyprus, whether owned or rented.
From 1 January 2026, the previous condition requiring the individual not to be tax resident in any other country was removed from the Cyprus 60-day rule. It is therefore possible for more than one country to regard the founder as tax resident under their respective domestic laws. Where this occurs, the position must generally be resolved under the tax-residence tie-breaker provisions of the applicable double tax treaty.
For this reason, founders should not consider the Cyprus rules in isolation. Before relocating, they should also examine the residence and departure rules of the country they are leaving, the location of their family and homes, the number of days spent in each jurisdiction and where their personal and economic relations are centred. This is particularly important where the founder continues to own, direct or manage businesses outside Cyprus.
10. What Is Cyprus Non-Dom Status?
Becoming a Cyprus tax resident does not necessarily mean becoming domiciled in Cyprus. Tax residence is determined primarily by the number of days spent in Cyprus and the individual’s relevant connections with the country. Domicile is a separate legal concept based broadly on the individual’s domicile of origin, personal history and long-term connection with Cyprus.
The non-dom regime is generally available to individuals who become Cyprus tax residents, but do not have a Cyprus domicile of origin and are not otherwise treated as domiciled in Cyprus under the applicable legislation.
An individual will generally become “deemed domiciled” after being a Cyprus tax resident for at least 17 of the preceding 20 tax years. Non-dom status can therefore ordinarily provide benefits for up to 17 years. Following the 2026 tax reform, certain eligible individuals whose domicile of origin is outside Cyprus, may elect to extend the regime for up to two additional five-year periods, subject to conditions.
The individual must first register with the Cyprus Tax Department and establish Cyprus tax residence. Non-dom status is then declared through the prescribed procedure, supported by documentation concerning the individual’s identity, tax residence, domicile of origin and previous periods of residence in Cyprus. Additional evidence or declarations may be requested depending on the individual’s history and circumstances.
The three concepts should therefore be kept distinct:
- Immigration status determines whether the individual may legally reside and work in Cyprus.
- Tax residence determines whether Cyprus treats the individual as resident for tax purposes.
- Domicile determines, among other matters, whether the individual is subject to Special Defence Contribution on certain categories of passive income.
Obtaining an FIC residence and employment permit does not automatically establish tax residence or non-dom status. Each status has its own requirements and must be addressed separately.
11. What Are the Main Non-Dom Benefits?
The non-dom regime is sometimes described too broadly as making foreign income “tax-free”. Its actual benefit is narrower, but potentially very valuable: qualifying non-domiciled Cyprus tax residents are exempt from Special Defence Contribution (“SDC”) on dividend and interest income, generally for up to 17 years.
An eligible non-dom individual may generally benefit from:
- exemption from SDC on dividends received from Cyprus or foreign companies; and
- exemption from SDC on interest income.
These exemptions do not necessarily remove any applicable General Healthcare System (“GHS”) contributions or taxes that may arise in another jurisdiction.
Other features of the Cyprus tax system may also be relevant, but they should not be confused with the non-dom exemption itself. These include:
- the general exemption of dividend income from personal income tax;
- the general exemption of qualifying gains from the disposal of securities from income tax; and
- the fact that Cyprus capital gains tax is principally imposed on gains from the disposal of immovable property situated in Cyprus and, subject to the applicable statutory conditions, shares in companies that directly or indirectly derive value from such property.
Non-dom status does not, by itself, exempt:
- salary and employment income;
- director’s fees;
- consultancy income;
- business or professional profits;
- rental income;
- gains connected with Cyprus immovable property; or
- income or gains taxable in another jurisdiction.
Separate employment-income exemptions may be available to qualifying individuals commencing their first employment in Cyprus. These incentives are distinct from non-dom treatment and have their own eligibility conditions.
12. Planning Before the Move
The timing and structure of a relocation can materially affect its tax outcome. Before moving to Cyprus, the founder’s personal, business and investment affairs should be reviewed across all relevant jurisdictions.
The review should cover:
- existing foreign companies, directorships and management responsibilities;
- the timing and treatment of salary, dividends and shareholder loans;
- anticipated share sales, IPOs, restructurings or other exits;
- foreign properties and rental income;
- corporate tax-residence and permanent-establishment risks;
- the residence, departure-tax and continuing filing rules of the country being left;
- applicable double-tax treaties; and
- VAT, payroll and social-insurance consequences.
The objective is to align the founder’s residence, remuneration, investments and business operations. The central principle is simple: review and, where appropriate, restructure before relocating or completing a major transaction -not afterwards. Any restructuring should have genuine commercial substance and be coordinated with advisers in the other relevant jurisdictions.
13. Common Mistakes to Avoid
The FIC–non-dom route can be highly effective, but it is not automatic. Most difficulties arise from taking steps in the wrong order or failing to align the immigration, corporate and tax aspects of the relocation.
- Assuming that incorporation creates a right to work
- Treating the €200,000 investment as a visa fee
- Transferring funds without a clear documentary trail
- Using a visitor permit while actively working
- Treating non-dom as an immigration status
- Relocating immediately before a dividend, IPO or share sale
The advisable approach is to establish the correct sequence from the outset: plan the relocation, structure the business and investment, obtain the necessary immigration permissions, establish tax residence and then implement the non-dom position. Attempting to correct the structure after the move or following a major transaction is usually more difficult, and may be too late.
How PL Law Can Assist
A successful relocation requires the company structure, immigration arrangements and personal tax position to work together. PL Law provides coordinated support throughout the process, including:
- Preliminary assessment of eligibility and the proposed structure.
- Incorporation and organisation of the Cyprus company.
- Registration as a Company with Foreign Interests.
- Applications for residence and employment permits.
- Residence applications for spouses and dependent children.
- Coordination with tax advisers regarding Cyprus tax residence and non-dom registration.
- Corporate governance and ongoing legal and regulatory compliance.
- Coordination with the client’s legal and tax advisers in their existing country of residence.
Our involvement can begin at the planning stage and continue through the company’s establishment, the founder’s relocation and its ongoing operation in Cyprus.
Contact us for an initial assessment of whether the FIC and non-dom route is suitable for you.
Disclaimer
This article does not constitute legal advice and is not intended to provide an exhaustive analysis of the topic. For information or guidance on this matter, you should seek legal counsel. You may contact us for appropriate assistance.
