Cyprus non dom company: why the regime needs one

Cyprus non dom company: the condition it satisfies

The 60-day test has four limbs, and the second is the one a company answers: you must carry on any business in Cyprus, and/or be employed in Cyprus, and/or hold an office in a person tax resident in Cyprus, at any time in the tax year. There is a proviso attached. The limb is not met if that business, employment or office is terminated during the same year.

So a directorship of your own Cyprus company satisfies it, and resigning it in November of the year you relied on it un-satisfies it. That is the single most expensive administrative mistake available in this regime.

What the company itself pays

The 15% is the rate your money actually meets. Before any dividend reaches you, the company has paid 15% on the profit it came out of, and that is the real rate on the overall arrangement. "0% on dividends" describes the second step only.

The IP Box, stated accurately

The IP Box deducts 80% of qualifying profits from a qualifying intangible asset, which leaves 20% taxed at 15%, an effective 3%. Three conditions on that sentence are routinely dropped:

• It applies to qualifying intangible assets, such as software copyright or a patent your company developed, not to "tech companies" as a category.
• Qualifying profit is reduced by the nexus fraction, which compares your own research spend with total spend on the asset, so buying IP in rather than building it cuts the benefit.
• Everything else the company earns, including services billed to clients, is taxed at the normal 15%.

Two 2026 changes that cut in opposite directions

Deemed dividend distribution is going. For profits of tax year 2026 and after, it is abolished. For 2024 and 2025 profits it still applies: 70% deemed distributed two years after the year end, at 17%, and only on the share held directly or indirectly by Cyprus residents who are also domiciled. A non-dom shareholder was already outside it.

A new charge arrived in its place and it is less widely noticed. A constructive dividend rule charges 10% on the market value of company assets used privately by a resident shareholder or a connected person, and on transfers of company assets to them below value. The company car and the company apartment are the obvious cases.

Where the company must be resident

From 2026 a company incorporated in Cyprus under the Companies Law is Cyprus tax resident unless a tax treaty provides otherwise. That is new; the older test was management and control, which still makes a foreign company resident here if it is run from Cyprus.

Both tests point the same way for someone actually living in Cyprus, and the practical question is the one the law does not spell out: what the Tax Department expects to see as evidence that a company is managed here. Board meetings in Cyprus, local directors and decisions documented in Cyprus are what advisers build, and we have not found a published departmental test, so we treat substance as something to do properly rather than to minimise.

What the company does not do

It does not make you tax resident. It satisfies one limb of a four-limb test; the days, the other-state limit and the permanent home are still yours to meet. And it does not change your domicile, which is what the non-dom claim turns on.