For many emigrants the non-domiciled status is the main reason for Cyprus: dividends, interest and rental income stay exempt from the special contribution for up to 17 years.
Cyprus distinguishes between tax residence and domicile. Anyone who becomes resident in Cyprus but has no domicile there – i.e. is not Cypriot-domiciled by origin – can obtain the non-domiciled status. It exempts you from the special defence contribution (SDC), which would normally apply to dividends, interest and rental income.
In practice this means: non-doms resident in Cyprus receive dividends from their company effectively without this contribution. The status generally applies for up to 17 years within a 20-year period.
No special defence contribution on dividends – ideal for company owners.
Interest income is also exempt from the SDC.
Rental income benefits from the exemption too.
Only those who are genuinely tax resident in Cyprus – via the 183-day rule or the 60-day rule – can use the non-dom benefit. Combined with a Cyprus Limited, the well-known model emerges: low corporate tax at company level plus a largely contribution-free distribution to the non-dom owner.
Important: even as a non-dom, small contributions (e.g. to the GESY health system) may apply to certain income. And the benefit only works once German tax liability has been cleanly ended.
An illustration (highly simplified, not tax advice): a Cyprus Ltd earns €100,000 in profit. Roughly 15% corporate tax applies, i.e. about €15,000. If the company distributes the remaining profit to a non-dom owner resident in Cyprus, the special defence contribution does not apply – the dividend stays exempt from it (small GESY contributions may apply).
For comparison: in Germany you would face around 30% total burden at company level plus around 26.4% capital gains tax on the distribution. The difference in what ultimately reaches the owner is significant – but only if residence and substance are genuinely in Cyprus.
Generally up to 17 years within 20 years of residence in Cyprus.
They are exempt from the special defence contribution. Small contributions such as GESY may apply depending on the income. The overall burden is nonetheless very low.
No. The prerequisite is tax residence in Cyprus – the status requires a genuine change of residence.
Note: this is not tax or legal advice. Rules and rates (2026) may change; individual treatment must be clarified with qualified advisers.
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