Cyprus Business Guide for Beginners: 0% Dividend Tax & Residency Through Investment Explained
Cyprus – Beyond its advantageous geographical location connecting Europe, the Middle East, and Africa, Cyprus ranks among the top 50 countries to do business .
Cyprus is rapidly gaining recognition as a prime strategic destination for global entrepreneurs, investors, and families looking to expand their horizons internationally. In the latest leadership circle roundtable, Digital Go Where CEO Bhargavi Rathi had a conversation on “Breaking into Cyprus: A 2025 Opportunity for Business,” with Athena Trust Group CEO Andreas Athinodorou, Christos Kythreotis, a Cyprus-based tax expert, and Angela Neofytou, a real estate and immigration lawyer to discuss the compelling advantages the island offers.
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Why Cyprus, Why Now?
Cyrus ranks among the top 50 easiest places to do business in 2025. It offers a compelling blend of features. Andreas Athinodorou, CEO of ATG and a UK qualified chartered accountant, elaborated on the island’s core attractions. He also pointed to the ease of doing business, an attractive taxation environment, a trusted regulatory system, and the quality of life as key drivers. He said-
One thing that is very close to my heart is at the end of the day, after you've done the business, lifestyle is important. So Cyprus is a safe place to live, a good place to bring up your family, educate your children and then have access to a number of possibilities for expansion.
He remarked that the Mediterranean climate offers around 360 days of good weather, enabling a strong work-life balance and outdoor activities like sea sports and hiking. Schooling options are available linking to British, American, and international systems.
Pathways to Residency and Citizenship
For individuals and families looking to relocate, Cyprus offers clear residency pathways. Angela Neofytou, a real estate and immigration lawyer, detailed the popular permanent residency scheme.
Cyprus has a very strong scheme for permanent residency, which many foreigners choose. So for permanent residence in Cyprus, there is an investment requirement of 300,000 euros plus 19 % VAT in property acquisition. There is a strict requirement though that the money needs to come from a bank account that the applicant has abroad.
There is flexibility in choosing investment options – invest in property, share capital of a Cyprus registered company or in a collective fund like AIF or RAIF set up in Cyprus.
A significant benefit is the minimal physical presence requirement: applicants need only visit Cyprus once every two years to maintain their permanent residency. One important thing to note is that the source of funds for investment must be a foreign bank account in your name.
Low Tax Advantages: A Global Sweet Spot
A major draw for businesses is Cyprus’s competitive tax system. Christos Kythreotis, a Cyprus-based tax expert and founder of Auxilium Professional Services, highlighted the attractive tax regimes.
Since our aim is to attract international high networked individuals to come to Cyprus, we included in our legislation the non-domiciled provision, whereas it gives them the option to be exempt for certain sources of income. One of the main sources that they do not pay taxes on is dividends. So if you combine this with the corporate tax rate, which is 12.5%, this is a very good tax optimization tool
He spelled out the tax benefits for high-net-worth individuals and entrepreneurs through Cyprus’ non-domicile provisions. Individuals residing in Cyprus for at least 183 days per year qualify as tax residents and, if classified as non-domiciled, are exempt from Special Defence Contributions (SDC) for 17 years. This results in 0% tax on dividends, interest, and rental income from non-Cyprus properties—yielding potential tax savings of up to 17%.
Additionally, Cyprus boasts a competitive corporate tax rate of just 12.5%, and a progressive personal income tax structure with 0% tax on income up to €19,500, and rates ranging from 20%, to 35% for income exceeding €60,000. He explained that these rates are strategically set to be competitive globally, avoiding the pitfalls of excessively high or low rates that could attract unwanted attention from other jurisdictions.
Setting Up and Scaling Businesses
Establishing a corporate presence in Cyprus is a streamlined process. Andreas Athinodorou highlighted the suitability of a limited liability company (LLP), particularly for those from common law countries like India, as Cyprus’s corporate legal system is based on UK law.
Best legal entity to set up is a limited liability company, which is the easiest format of company to set up here in Cyprus. In terms of how fast you can incorporate a legal entity, consider the two-step process. So the first step process takes two three days to get a name approved and then five to seven working days from the day that you submit the documents you will have the company in place
He explained that Setting up a Limited Liability Company (LLC) in Cyprus offers several advantages, including limited liability for members and potential tax benefits. The process involves selecting a company name, preparing the Memorandum and Articles of Association, appointing at least two members (directors or shareholders), securing a registered office address, and registering with the Registrar of Companies.
Cyprus LLCs that are foreign-owned and treated as non-resident entities for tax purposes are exempt from corporate tax. Resident LLCs, on the other hand, are subject to a low corporate tax rate of 12.5%
Opening a bank account can take two to three weeks with a Cypriot bank or as quickly as 24 to 48 hours with an electronic money institution. Overall, a timeframe of around 30 days is considered realistic for setting up and being ready to operate.
India is a very growing market. So all the startups and big businesses are looking to scale up globally. I think it's very easy to plug and play with Cypress. You can move your company, you can move the structure, you can move your employees and you can start to give them a good lifestyle, with less taxes
Bhargavi Rathi is an international growth marketer and helps you expand business in a country like Cyprus which has a business-friendly environment, flexible corporate structures, and attractive low-tax regime, Cyprus offers a seamless “plug and play” setup for relocating companies and teams.
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FAQs
Cyprus offers a unique combination of a strategic geographical location, business-friendly regulations, competitive tax regimes, and a high quality of life. Ranked among the top 50 countries to do business in 2025, it provides easy company setup procedures, low corporate tax (12.5%), and strong legal infrastructure based on UK law.
To obtain permanent residency, individuals must invest at least €300,000 (plus 19% VAT) in real estate or other eligible options such as share capital of Cyprus-registered companies or investment funds. The funds must come from a foreign bank account, and only one visit every two years is required to maintain residency.
Non-domiciled tax residents of Cyprus are exempt from Special Defence Contributions for up to 17 years. This means 0% tax on dividends, interest, and foreign rental income, alongside Cyprus’s already competitive corporate tax rate of 12.5% and personal income tax exemptions up to €19,500.
Setting up a Limited Liability Company (LLC) in Cyprus typically takes 7 to 10 working days once the company name is approved. A full setup, including opening a bank account and becoming operational, is usually completed within 30 days.
Yes. Cyprus is especially suitable for Indian entrepreneurs and startups looking to scale internationally. Its common law system aligns well with Indian business practices, and the environment supports remote team relocation, low tax burdens, and global market access, making it a plug-and-play destination for Indian companies.
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