The Covid-19 pandemic and the enforcement of lockdowns has resulted in the exponential adoption of remote working, as businesses and individuals have had to adapt to a new norm. Due to technological advancements, the number of people who can perform their work remotely has been steadily rising. The large-scale adoption of remote working boosted the already growing trend of digital nomads.
Digital nomads are individuals who can, with the use of technology, carry out their work or profession remotely from anywhere and without location restrictions. As the term implies, digital nomads choose to live nomadically, which means that they remain in the same location for limited periods and they regularly change their location. This enables digital nomads to experience different lifestyles and cultures and explore the world, while also performing their work.
The recent embrace of this type of lifestyle by an increasing amount of highly skilled labour has caught the attention of the Cypriot government. To promote the island to digital nomads, the Cypriot Council of Ministers approved the introduction of the Digital Nomad Visa Scheme in 2021. This scheme applies only to non-EU and non-EEA nationals, as Cyprus is a member of the EU and, consequently, EU nationals have the right to reside and work within the country without restrictions.
The “Cyprus Digital Nomad Visa”
The “Cyprus Digital Nomad Visa” Scheme permits nationals from non-EU and non-EEA countries, who can work remotely with the use of technology, to reside temporarily in Cyprus, while working for an employer registered abroad or performing work for companies and/or clients located abroad.
For the visa to be granted, the applicant must be able to prove a stable and sufficient monthly net income, which is set to at least €3.500 (after the deduction of contributions and taxes). For a spouse/civil partner, the required amount shall be increased by 20%, while for each child, the required monthly income is increased by 15%. Moreover, the applicant must have healthcare coverage (General Healthcare System – GeSY); and shall provide a clean criminal record by the country of their residence.
What are the benefits:
Individuals that are granted a Digital Nomad residence permit will gain the:
- Right of residence for a year in Cyprus, with a possibility of renewal for a further 2 years.
- Right of residence for family members, for the same period as the Digital Nomad, without the right to be employed or perform economic activity in Cyprus.
- If they reside in the Republic for periods that in total exceed 183 days, within the same tax year, then they are considered tax residents of Cyprus, provided they are not tax residents in any other country.
Family members
- A digital nomad’s family members can reside in Cyprus for the same period as the digital nomad, without the right to be employed or perform any economic activity in Cyprus.
- Family members include the spouse/ partner in a civil union and underaged children.
- Family members also need to obtain a temporary residence permit (this requires an additional, but relatively straightforward, procedure).
Why choose Cyprus?
- A favourable tax regime
Cyprus offers a non-dom taxation scheme, which enables digital nomads to benefit from its attractive tax system. To be regarded as a Cypriot Tax resident and be eligible for the non-dom taxation scheme, any potential individual is required to:
- Reside in Cyprus for more than 183 days per tax year (this period does not have to be a continuous)
- Spend at least 60 days in Cyprus without being taxed in other countries
- Have a permanent home in Cyprus (Rental or Ownership)
- Own a business in Cyprus or be an employer in Cyprus
For individuals: The worldwide income of Cypriot Tax residents is subjected to the Cyprus Personal Income Tax. The Cypriot income tax provides individuals with the ability to credit any foreign taxes paid. The current rates of income tax for individuals are:
Chargeable Income for Tax Year
| From (€) | To (€) | Rate |
| 0 | 19,500 | 0% |
| 19,501 | 28,000 | 20% |
| 28,001 | 36,300 | 25% |
| 36,301 | 60,000 | 30% |
| 60,001 and above | 35% |
For non- tax residents of Cyprus, only certain types of income accrued or derived from Cyprus are taxed.
Tax regime for corporations: Cyprus offers an attractive corporate tax rate of 12.5%, while it also offers multiple other tax benefits (such as no- tax for any dividends received by Cyprus tax resident companies, no tax for profits arising due to a disposal of corporate titles etc.)
- Business-friendly environment
Other than the favourable tax regime, Cyprus provides an accommodating infrastructure and a friendly environment for business. The formation of a corporation is a relatively inexpensive and straightforward procedure. The country is world renowned for its ease of doing business and its business-friendly culture.
- Mediterranean Climate
As a Mediterranean island, Cyprus has more than its share of sandy beaches and sunny days. The island enjoys on average 300 days of sunshine each year, while the average yearly temperature is 25°C during the day and 15°C at night.
- Good Quality of Life
Cyprus offers a high standard of living, is affordable and has extensive infrastructure, including reliable Internet access, being the first country in the European Union with 100% 5G population coverage. Cyprus also continually ranks as one of the safest countries in the world.
- Strategic Location
Cyprus is also ideally located as it is at the crossroads of Africa, the Middle East and Europe. Its 2 airports and large port connect the island to the rest of the world offering excellent accessibility. As a member of the EU, Cyprus offers multiple direct links to the rest of Europe, with daily flights to major European and Middle-Eastern cities.
- A majority English speaking country
An issue which a lot of digital nomads face once they move to a new country is the language barrier. Nevertheless, in Cyprus this issue is almost non-existent, as English is widely spoken across the island.
Need Assistance?
Our Firm can assist you in obtaining the Digital Nomad Visa as well as temporary residence permits for any family members. Moreover, our Firm can assist with the formation of a corporation in Cyprus and any other legal issue regarding relocation to Cyprus.
Disclaimer: This article is intended for informational purposes only and does not constitute legal advice. Consultation with legal professionals is recommended for specific legal matters.