Recent developments in the United Kingdom’s non-domiciled regime have led many individuals to reconsider their UK tax residency. With the UK abolishing its long-standing non-dom status from April 2025, international professionals, entrepreneurs and high-net-worth individuals are seeking alternative jurisdictions within the European Union. Cyprus has quickly emerged as one of the most attractive options, offering a combination of competitive tax incentives, EU mobility and long-term certainty.
Chancellor of the Exchequer Rachel Reeves confirmed in the Autumn Budget of October 2024 that from 6 April 2025, the UK’s non-dom regime would be replaced by a system based purely on tax residency. This reduces the period during which a non-domiciled individual can benefit from the remittance basis to only four years, provided they have been non-UK tax resident for at least ten. The result is a significant impact on long-term non-doms, many of whom are now exploring relocation to more favourable regimes such as Cyprus.
Cyprus has built a reputation as a politically stable EU jurisdiction with a well-developed legal and tax framework. The island’s non-domicile regime, introduced in 2016 under the Special Defence Contribution Law 117(I)/2002, exempts non-doms from tax on dividends, passive interest and rental income. In addition, there is no wealth tax, no inheritance tax and no capital gains tax on securities other than Cyprus real estate. This makes Cyprus particularly attractive for wealth preservation and cross-border asset structuring.
The Income Tax Law 118(I)/2002 also provides generous employment income exemptions. Currently, individuals earning more than €55,000 annually can benefit from a 50 per cent income tax reduction for up to 17 years, an incentive specifically designed to attract highly skilled professionals. Proposals under the 2025 tax reform package suggest extending non-dom benefits indefinitely through an annual fee and raising the tax-free threshold to €20,500, making Cyprus even more appealing in the post-UK non-dom landscape.
Unlike the UK’s tightening regime, Cyprus offers a clear framework for capital gains. The Capital Gains Tax Law 52/1980 limits taxation only to disposals of Cyprus-situated real estate and related shares. Gains from trading global securities remain exempt. This provides flexibility for internationally mobile professionals and investors managing diverse asset portfolios. Further tax deductions are proposed for families, green investments and mortgage interest, aligning Cyprus’s framework with modern lifestyle needs. The government has also signalled continuity for cornerstone incentives such as the Notional Interest Deduction and the Intellectual Property Box regime (IP Box), both of which remain highly competitive within the EU.
Tax residency in Cyprus is accessible and flexible. The traditional 183-day rule remains, but the innovative 60-day rule allows individuals to establish residency with minimal presence if they maintain economic ties and are not resident elsewhere. Planned 2025 reforms would expand this further by recognising the centre of business interests as sufficient grounds, even for those spending limited time on the island. This approach gives entrepreneurs, digital nomads and executives the ability to secure tax residency based on substance rather than permanent relocation, an increasingly important factor in today’s mobile business environment.
Cyprus has also updated its immigration law through the Aliens and Immigration (Amendment) Law 111(I)/2024, which transposed Directive (EU) 2021/1883 into national legislation. From July 2025, highly skilled third-country nationals can now apply for the EU Blue Card in Cyprus, securing access to the EU labour market on harmonised terms. Eligibility requires a university degree or equivalent professional experience, a binding job offer in sectors such as ICT, pharmaceutical research and development or shipping, and a minimum annual salary of €43,632. In addition to residence rights and equal treatment in employment and social security, Blue Card holders enjoy family reunification, short-term EU travel and mobility to another Member State after 12 months in Cyprus. When combined with Cyprus’s non-dom tax incentives, the Blue Card creates a uniquely powerful combination of fiscal efficiency and EU-wide professional mobility.
For former UK non-doms, Cyprus offers three key advantages. First, its non-dom regime eliminates tax on dividends, interest and foreign-sourced gains, allowing for efficient wealth planning. Second, its residency rules provide flexibility, enabling individuals to anchor their affairs in Cyprus without the need for constant physical presence. Third, its integration of the EU Blue Card strengthens mobility, giving globally minded professionals the ability to combine tax benefits with EU-wide career opportunities.
Relocating to a new country is a significant decision, but Cyprus offers a balance of fiscal efficiency, legal certainty and quality of life. With a Mediterranean climate, EU membership, an English-speaking professional services sector and favourable reforms underway, the island is increasingly seen as the natural successor for those leaving the UK non-dom regime. For individuals and families impacted by the UK’s reforms, Cyprus presents a stable and future-facing alternative. Its combination of tax incentives, residency options and EU mobility ensures it will remain a top destination for internationally mobile talent seeking security, opportunity and long-term planning.
To learn more, please refer to our comprehensive Relocation Guide for Cyprus available at the link below.
Download for free: https://accessfinancial.com/country-guides/cyprus/
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