Non-dom in Cyprus: what it gives, what it doesn't

Non-dom status removes exactly one tax: the Special Defence Contribution (SDC). For a Cyprus tax resident who is not domiciled here, dividends and interest carry 0% SDC — instead of the 5% on dividends and 17% on interest that domiciled residents pay. It lasts seventeen years and, since the tax reform passed on 22 December 2025 and in force from 1 January 2026, it can be extended for a fee. What non-dom does not do is reduce tax on salary, business profits or crypto, and it does not switch off the GESY health contribution. This page covers both halves honestly. It is also the honest answer to what people mean when they ask about a “Cyprus offshore company”, and it says nothing about what happens to the estate — that is on inheritance and succession.

What the SDC exemption is worth

SDC is a Cypriot oddity: a separate tax on “passive” income that only hits residents who are also domiciled in Cyprus. Non-doms are outside it entirely.

Two reform notes worth registering. First, the domiciled rate on new-profit dividends fell from 17% to 5%, so the gap between dom and non-dom narrowed — but 0% is still 0%. Second, from 2026 personal interest sits only in SDC (it was removed from income tax), which makes the non-dom exemption on interest cleaner than before.

What you still pay

This is the part most “0% dividends” marketing skips:

• GESY, 2.65% on dividends, interest and rent — capped. The contribution base tops out at €180,000 of annual income, so the maximum GESY on dividends is €4,770 per year. The honest headline rate on non-dom dividends is therefore “up to 2.65%, capped”, not zero.
• Income tax on active income. Salary and business profits go through the normal bands — 0% to €22,000, then 20–35% — plus social insurance where applicable. The tax calculator shows the combined picture.
• The flat 8% on crypto gains, introduced from 2026, applies regardless of domicile — it is income tax, not SDC.
• Capital gains tax at 20% if you sell Cyprus real estate. Securities remain exempt for everyone.

Who counts as non-domiciled

SDC applies only to individuals who are both Cyprus tax resident and domiciled in Cyprus — a rule in place since 16 July 2015. You are treated as domiciled if either:

1. Cyprus is your domicile of origin under the Wills and Succession Law (broadly, inherited at birth — with statutory exceptions), or
2. You are deemed domiciled: tax resident in Cyprus for at least 17 of the 20 years before the tax year.

A foreign founder relocating to Cyprus typically has a foreign domicile of origin, so non-dom status applies from year one — no application fee, no minimum investment, no special visa. The prerequisite is simply becoming a tax resident, via the 183-day or 60-day rule.

The 17-year clock — and the new paid extension

Year 18 used to be a hard stop: deemed domicile kicked in and SDC arrived. The 2026 reform added an exit ramp. From 1 January 2026, individuals whose domicile of origin is outside Cyprus can extend non-dom treatment after the 17 years for up to two further 5-year periods, at €250,000 per period, paid up front (the equivalent of €50,000 per year). This is enacted law, not a proposal.

Whether it is worth it is arithmetic: the fee beats the tax only if the SDC you would otherwise owe exceeds €250,000 per period — at the 5% rate, that means more than €5 million of dividends per five-year window. For most owners the better answer at year 17 is a distribution and structure review, not a cheque.

How you get non-dom status

1. Become a Cyprus tax resident — 183 days, or 60 days plus a Cyprus home and a Cyprus role or business.
2. Register with the Tax Department and obtain your tax identification code (TIC).
3. File the non-domicile declaration, with evidence that your domicile of origin lies outside Cyprus — in practice a documented account of where you and your father were born and settled, which we prepare with you.
4. Keep it current. The deemed-domicile test looks back over 20 years, every year, so long-term residents should know their own count.

How we run it

1. Assess — residency route, domicile-of-origin facts, and how your income actually flows.
2. Register — TIC, the non-dom declaration and GESY registration handled in one pass.
3. Structure — the dividend flow set up so the SDC exemption and GESY cap do the work they should.
4. Review annually — residency days, the 17-year count and any law changes, checked before each tax year closes.