Cyprus: Residency, the 60-Day Rule and Non-Dom Status After the 2026 Tax Reform

Residence: registration, not a visa

EU citizens do not apply for a residence programme. They register. Anyone staying longer than three months applies to the Civil Registry and Migration Department within four months of arrival for the registration certificate for Union citizens. The form is called MEU1, and the certificate is usually called the "yellow slip" because of its colour.

The core requirements:

• Passport or national ID card, original plus copy.
• Proof of an address in Cyprus, typically a rental agreement.
• Proof of the purpose of stay: an employment contract, self-employment, or, for those who do not work, sufficient means and health insurance.
• Photos and the fee, which the authority lists as 20 euros, paid before the application is submitted.

Foreign documents have to be officially translated and certified. After five years of lawful residence you can obtain permanent residence with form MEU3. In daily life the yellow slip matters more than it sounds: banks, the GeSY health system and the tax department all ask for it.

One distinction to keep clear: the yellow slip is a right of residence, not a tax status. Being registered does not make you tax resident in Cyprus, and being tax resident in Cyprus does not mean your home country has let you go.

Tax residence: 183 days or 60 days

Cyprus has two routes to tax residence, both based on the calendar year.

The 183-day rule. If you spend more than 183 days in Cyprus in a calendar year, you are tax resident there. No further conditions. The reform did not change this rule.

The 60-day rule. This is why Cyprus comes up in every relocation forum. You are also resident if, in the same calendar year, you meet all of the following:

• at least 60 days in Cyprus,
• no more than 183 days in any other single country,
• an activity in Cyprus: running a business, being employed there, or holding an office as director of a Cyprus tax-resident company, and that link must not end during the year,
• a permanent home in Cyprus, rented or owned.

Until the end of 2025 there was a fifth condition: you could not be tax resident in any other country. The reform removed it from the 2026 tax year. That sounds like a relief, and for some people it is. Above all, though, it means Cyprus now treats people as resident who are resident somewhere else at the same time. If you keep a home in Germany, for example, German law still treats you as fully tax liable, whatever Cyprus says. The double tax treaty then decides which country wins, and that turns on your permanent home and your centre of vital interests, not on the 60 days.

Put simply: the 60-day rule settles the Cyprus side. It does not settle the home-country side.

Non-dom: what is actually tax-free

Cyprus separates residence from domicile. Domicile is an English-law concept, essentially your country of origin. If your domicile of origin is not Cyprus, you count as non-dom as long as you have not been tax resident in Cyprus for 17 of the last 20 years. For someone moving from Germany that is the normal case. There is no application to be granted the status: it follows from the law and is claimed in the tax return.

The benefit concerns one specific tax, the Special Defence Contribution, or SDC. It applies to dividends and interest. Non-doms do not pay it, on worldwide dividends and interest, for as long as the status lasts, which means up to 17 years.

What the status does not cover:

• Income tax on work and business. Salary, director's fees and self-employed profits are taxed normally. From 2026 the first 22,000 euros are tax-free, after which the rate rises in steps through 20, 25 and 30 percent to the top rate of 35 percent above 72,000 euros.
• The GeSY health contribution. Dividends and interest attract 2.65 percent, non-doms included, capped at 180,000 euros of income a year. That is at most 4,770 euros.
• Crypto gains. Since the reform they are taxed at 8 percent.

Gains on securities are generally tax-free in Cyprus; capital gains tax only applies to Cyprus real estate. Combined with non-dom status this means an investor living on dividends, interest and price gains pays essentially the GeSY contribution in Cyprus. That is where the country's reputation comes from.

For newcomers who work in Cyprus there is also a new exemption. If you took up work in Cyprus after 1 January 2025, earn more than 30,000 euros a year and were not resident in Cyprus for at least seven years before, you can, according to KPMG, exempt 25 percent of that income for seven years, capped at 25,000 euros a year. It applies to employees and the self-employed and sits alongside the older exemptions for employees.

What the 2026 reform changed for non-doms and SDC

Three changes matter here.

SDC on dividends drops from 17 to 5 percent for domiciled individuals. This does not affect non-doms directly, since they already paid nothing. It does change the maths after year 17: once you count as domiciled, dividends from profits earned from 2026 cost 5 percent instead of 17. Dividends paid out of profits up to the end of 2025 and distributed by the end of 2031 stay at 17 percent. Rental income no longer attracts SDC at all.

Non-dom status can be extended. New is an option for the period after year 17. If your domicile of origin is not Cyprus, you can extend the SDC exemption by up to two further five-year periods, for a lump sum of 250,000 euros per period. That makes a maximum of 27 years. Law firms do not yet describe the procedural details, deadlines and payment mechanics, in the same way, so the law text and the tax department's practice are what count. At a 5 percent SDC rate the lump sum only pays off above roughly one million euros of dividends a year, so it is a tool for very large fortunes.

Deemed dividend distribution is gone. Previously, a Cyprus company with resident, domiciled shareholders that did not distribute 70 percent of its profit within two years was treated as if it had. For profits from 2026 this rule is abolished.

Corporate tax: 15 percent instead of 12.5

The 12.5 percent that Cyprus advertised for decades is history. Since 1 January 2026 corporate tax is 15 percent. The background is the OECD global minimum tax, which already requires 15 percent for large groups. Tax losses can now be carried forward for seven years instead of five, and stamp duty has largely been abolished.

For an entrepreneur with a Cyprus company the chain now looks like this: 15 percent on the company's profit, then no SDC on the distribution as a non-dom, but 2.65 percent GeSY. That is still low, but it is not a zero-tax model, and it only works with real substance. A company run from Germany has its place of management in Germany and is taxable there, wherever it is registered. If you are thinking about a US company instead: a US LLC is usually tax transparent, so its profits are taxed in the owner's country of residence, and Cyprus does not automatically see it the way the US does.

The double tax treaty with Germany

Germany and Cyprus signed a new double tax treaty in 2011, replacing the one from 1974. For people moving from Germany, two points matter.

The tie-breaker. If someone is resident under the law of both countries, which the new 60-day rule makes more common, the treaty decides in a fixed order: permanent home, then centre of vital interests, then habitual abode, then nationality. A flat kept in Germany and a family in Munich beat 60 days in Limassol.

Withholding tax on German dividends. If you are resident in Cyprus and hold German shares, the full German withholding tax is deducted first. The treaty limits it to 15 percent for portfolio holdings, and the difference has to be reclaimed from the Federal Central Tax Office. For non-doms this withholding is often the only real tax on dividends, which is why many shift their portfolio towards countries with lower or no withholding tax.

The German side, briefly

Cyprus makes it easy. Germany does not. Three rules to know before giving notice on the flat:

• Deregistering is not enough. You are fully tax liable in Germany if you have a residence or habitual abode there. A flat you can use at any time is a residence, with or without a registered address.
• Exit tax. If you hold at least 1 percent of a corporation, moving away triggers tax on the hidden reserves as if you had sold. Since 2022 there is no interest-free deferral even within the EU, only payment in instalments over seven years.
• Extended limited tax liability. A German citizen who moves to a low-tax country and keeps substantial economic interests in Germany stays in an extended tax liability on German income for up to ten years. Whether Cyprus counts as low-tax in a given case depends on the level of income and on whether non-dom status is treated as preferential taxation.

How these rules fit together is covered in the overview of Plan B residency options. The tax outcome always depends on the individual case, and you need an adviser on both sides.

Banking in Cyprus

A Cypriot account is an EU account. Deposit insurance covers 100,000 euros per customer and bank, and the new EU rule for banks from third countries, described in the article on accounts outside the EU, does not apply here. The large local banks are Bank of Cyprus, Hellenic Bank, Eurobank and Alpha Bank.

Opening an account is still not simple. Since the 2013 crisis and the criticism of their former business with offshore money, Cypriot banks check thoroughly. Expect to be asked for your passport, Cyprus address, yellow slip, tax number, a reference letter from your current bank and evidence of income and source of wealth. Bringing the complete package saves weeks. A credit card is a separate decision by the bank, and a credit history from your home country does not automatically count there: you start from scratch as a new customer.

For most people Cyprus is therefore not the main account but one level in the structure: a local account for rent, taxes and GeSY, alongside existing accounts at home or with an international bank. How those levels fit together is described in the banking ladder from fintech to private bank.