Cyprus Proposing Tax Perks To Attract Foreigners, Investment
Lorys Charalambous, Tax-News.com, Cyprus
12 November, 2021
Cyprus is considering the introduction of a new digital nomad visa, which would enable non-EU, self-employed persons to work from the territory, and be taxable there, providing they are not tax resident elsewhere.
The measure is one of a number recently outlined by the Government that are to be introduced as early as January 2022, to attract individual and corporate investors.
The digital nomad visa, which would be open to a limited 100 beneficiaries initially, would provide a residence permit for a third country national working remotely and for their family. It would have an initial term of 12 months but could be extended for a further two years. The applicant and their dependents would not be eligible to work in Cyprus. If they reside in the Republic for one or more periods that in total exceed 183 days within the same tax year then they would be considered tax resident in Cyprus, providing that they are not tax residents in any other state.
Further, the Government said it intends to extend the concessionary income tax regime for foreigners relocating to Cyprus for work. The scheme provides highly paid foreign workers with a 50 percent tax exemption, for up to 10 years. The Government is considering whether to extend this scheme to 17 years.
Proposed tax measures to attract businesses include a new 20 percent enhanced deduction for research and development expenditure, and the expansion of the 50 percent tax exemption for investment in certified innovative businesses, which is currently available only to natural persons, to corporate investors.