What is the corporate tax rate in Cyprus vs Ireland?

Cyprus is 15% from 1 January 2026. Ireland is 12.5% on trading income and 25% on non-trading income.

Can a UK citizen set up a company in Ireland?

Yes. You'll need at least one EEA-resident director or a €25,000 bond, and a company secretary. UK citizens can also live and work in Ireland under the Common Travel Area.

Can a UK citizen set up a company in Cyprus?

Yes, with no director residence rule. To live in Cyprus you need a separate residence permit unless you also hold an EU passport.

Do Irish companies need an audit?

Not if they're small: companies meeting two of turnover ≤ €15 million, balance sheet ≤ €7.5 million and ≤ 50 employees can claim audit exemption. Every Cyprus company needs an audit or, if small, a review.

Does Cyprus or Ireland tax the sale of my company?

Cyprus generally doesn't tax gains on shares (unless the company holds Cyprus property). Ireland charges 33%, or 10% with Entrepreneur Relief on up to €1.5 million.

How much does it cost to set up a company in Ireland?

The CRO filing fee is €50 online (€100 on paper), according to Irish formation agents, and agent packages start at around €100 plus VAT. Add about €1,600 plus VAT for a two-year bond if no director lives in the EEA.

Why do companies base themselves in Ireland?

For the 12.5% trading rate, an English-speaking EU base, a deep talent pool, a 35% R&D tax credit and a wide treaty network. Those suit funded, hiring businesses more than owner-managed companies that pay out their profits.

Is Ireland or Cyprus a tax haven?

Neither is on the EU list of non-cooperative tax jurisdictions. Both are EU members that apply EU anti-avoidance rules, and both apply the 15% global minimum to groups with revenue of €750 million or more.

Can I own an Irish company and live in Cyprus?

You can, but if you run it from Paphos it's likely to be treated as resident in both countries, which brings the treaty tie-breaker into play. For most owner-managers it's simpler to use a company in the country you live in.

Cyprus vs Ireland Company Formation: 2026 Comparison

Cyprus vs Ireland Company Formation: Which Is Better for a UK Founder in 2026?

Ireland taxes trading profits at 12.5%, Cyprus at 15%. But an owner who lives in Cyprus as a non-dom pays about 17% in total on profits paid out as dividends, against roughly 49% for an Irish-resident owner. Ireland wins on residence (no permit for UK citizens), audit relief and talent.

JJason 12 min read Last verified 27 September 2026

Get my structure compared Set up a Cyprus company

The short version

Corporate tax: Ireland 12.5% on trading profits (25% on passive income); Cyprus 15% on all profits from 2026.

Taking money out: a Cyprus non-dom pays 0% SDC + 2.65% GeSY on dividends. An Irish resident pays income tax up to 40%, USC up to 8% and PRSI.

Selling shares: Cyprus generally 0%; Ireland 33% CGT, or 10% with Entrepreneur Relief on up to €1.5m.

Living there: UK citizens can live and work in Ireland under the Common Travel Area. In Cyprus they need a permit.

Admin: Irish small companies can skip the audit; every Cyprus company needs an audit or review. Ireland needs an EEA-resident director or a €25,000 bond.

Cyprus vs Ireland company formation at a glance

Winners are marked for a small owner-managed company. Figures checked September 2026.

Cyprus

15% tax, non-dom dividends

Wins 6 of 12

Ireland

12.5% tax, Common Travel Area

Wins 5 of 12

Corporate tax on trading profits

15%

12.5%

Tax on passive / investment income

15%

25%

Owner's tax on dividends (resident owner)

2.65% GeSY for non-doms (0% SDC)

Marginal rate up to 40% + USC + PRSI

Tax on selling your shares

Generally 0%

33% (10% Entrepreneur Relief up to €1.5m)

IP regime

IP box: 80% exempt (about 3%)

Knowledge Development Box: 10%

R&D incentive

120% super-deduction to 2030

35% R&D tax credit

Dividend withholding tax

0% to non-residents (most cases)

25%, with exemptions for treaty residents

Resident director rule

None

EEA-resident director or €25,000 bond

Audit

Audit or review for every company

Small companies exempt

VAT

19%; register at €15,600

23%; register at €42,500 (services) / €85,000 (goods)

Right to live there as a UK citizen

Needs a residence permit

Yes, Common Travel Area

Tax treaties

72 jurisdictions listed

75 in effect

The verdict

Choose Cyprus if you'll live in Cyprus, run the company from there and pay yourself mainly in dividends — the total tax is far lower. Choose Ireland if you'll live in Ireland, need to hire from a big talent pool, want no immigration paperwork, or will reinvest most profits in the business at 12.5%. Either way, the company must be run from the country it's registered in.

Corporate tax: 12.5% beats 15%, but only at company level

Ireland charges 12.5% on trading profits and 25% on passive income such as rent and investment returns. Cyprus charged 12.5% until the end of 2025 and moved to a single 15% rate on 1 January 2026. The 15% global minimum under OECD Pillar Two only applies to groups with revenue of €750 million or more, so small Irish companies keep 12.5%. For how Cyprus's 15% compares with Malta's refund system, see our Cyprus vs Malta comparison.

Couples strolling the Kato Paphos promenade at dusk under palm trees — The Kato Paphos promenade after work

Ireland has one extra charge that catches owner-managed firms. A close company (one controlled by five or fewer people) that doesn't pay out its profits within 18 months faces a surcharge: 20% on undistributed investment and rental income, and 15% on half the undistributed trading income of a professional services company. Cyprus abolished its equivalent — the deemed dividend distribution rule — for profits from 2026 onwards.

So Ireland is cheaper if the money stays in the company to fund growth. On €150,000 of trading profit kept in the business, the Irish company pays €18,750 and the Cyprus company €22,500: Ireland saves €3,750 a year, as long as the close company surcharge doesn't bite. Once you take the money out, the picture flips.

Worked example: €150,000 profit paid out to the owner

A single owner, no salary, all profit paid as a dividend in 2026.

Step	Cyprus (non-dom owner living in Cyprus)	Ireland (owner living in Ireland)
Corporate tax	€22,500 (15%)	€18,750 (12.5%)
Dividend paid out	€127,500	€131,250
Personal tax on the dividend	€3,379 GeSY (2.65%); SDC 0%	About €41,700 income tax, €7,500 USC, €5,500 PRSI
Total tax	about €25,900 (17%)	about €73,400 (49%)
Left in your pocket	about €124,100	about €76,600

Ireland: 2026 single-person rates (20% to €44,000, then 40%; USC 0.5%–8% plus the 3% surcharge on non-PAYE income over €100,000; PRSI 4.2%) with only the €2,000 personal tax credit. Cyprus: non-dom status, 0% SDC, GeSY 2.65% capped at €180,000. Illustration only — salary, pension contributions and other reliefs change the result. Sources: PwC Worldwide Tax Summaries, Revenue.ie, Cyprus Tax Department.

Myth

Myth: "Ireland's 12.5% beats Cyprus's 15%, so Ireland is cheaper"

Reality

Only at company level. The owner of an Irish company who lives in Ireland pays income tax, USC and PRSI on dividends, which took the total to about 49% in our example. A non-dom owner living in Cyprus paid about 17%. The headline rate matters most for profits you leave in the company; the dividend tax matters most for profits you live on.

Personal tax on dividends decides it for most founders

This is where the Cyprus vs Ireland company formation question is usually settled.

Cyprus. Dividends aren't subject to income tax. They're subject to Special Defence Contribution (SDC), but a Cyprus tax resident who is not domiciled in Cyprus pays 0% SDC for up to 17 years. What's left is the 2.65% GeSY health contribution, capped at €180,000 of income a year. Cyprus-domiciled residents pay 5% SDC on dividends from 2026 profits. Our non-dom guide explains how UK citizens qualify, and the Cyprus tax route finder checks whether you'd be Cyprus tax resident under the 60-day or 183-day rule.

Limassol's old port at dusk with restaurant terraces and towers behind — Limassol's old port, a favourite for dinner after meetings

Ireland. Dividends from an Irish company are taxed as income: 20% up to €44,000 (single person) and 40% above, plus USC (up to 8%, and 11% on non-PAYE income over €100,000) and PRSI at 4.2%, rising to 4.35% from 1 October 2026. Ireland's non-domicile rules only help with foreign income kept outside Ireland, not dividends from your own Irish company.

If you don't live in either country — say you stay in the UK — neither company works as intended. A company run from the UK is likely to be UK resident under HMRC's central management and control test. See running a UK business from abroad.

Selling your company

Cyprus doesn't tax gains on shares, except shares in companies that own Cyprus property (from 2026, where at least 20% of the value comes from Cyprus property). A Cyprus-resident founder selling a trading company typically pays no Cyprus tax on the gain.

Ireland charges capital gains tax at 33%. Revised Entrepreneur Relief cuts that to 10% on qualifying gains up to a lifetime limit of €1.5 million for disposals from 1 January 2026 (it was €1 million), if you've held at least 5% for 3 of the last 5 years.

Either way, a UK founder who leaves the UK and returns within five years can be taxed by HMRC on the gain in the year they come back. Our entrepreneurs hub covers exit timing.

Setting up and running the company

	Cyprus	Ireland
Registrar	Registrar of Companies	Companies Registration Office (CRO)
Government fee	€165 (€265 expedited) + €10 name	€50 online / €100 paper (formation agents' figures)
Lawyer required?	Yes, a Cyprus lawyer must sign	No, formation agents or you can file
Typical time	6–10 working days	5–10 working days online
Directors	At least 1, any nationality	At least 1 EEA-resident director, or a €25,000 bond
Secretary	Required	Required (separate person if one director)
Audit	Audit, or review for small companies	Exempt if 2 of: turnover ≤ €15m, balance sheet ≤ €7.5m, ≤ 50 staff
Corporate directors	Allowed	Not allowed; directors must be individuals
First annual return	Registrar sets the return date; HE32 within 28 days of it	6 months after incorporation, then yearly
Late annual return	€50 + €1 a day (max €150) + €20	Late fee and, per formation agents, loss of audit exemption for 2 years
Annual cost for a small company	€2,000–€5,000 (accounts, audit, filings)	Usually lower without an audit
Tax residence rule	Cyprus-incorporated companies are resident by default (2026: unless a treaty says otherwise), and any company managed in Cyprus	Irish-incorporated companies are generally Irish resident; also any company managed in Ireland

People working at shared tables in a bright co-working space in Paphos — Shared desks in a restored stone building in old town Paphos

Ireland's Companies Act 2014, section 137 still requires at least one director resident in the European Economic Area, or a €25,000 insurance bond. A UK-resident founder isn't EEA-resident, so a UK-only board needs the bond or an Irish or EU co-director. Irish formation agents quote about €1,600 plus VAT for a two-year bond.

Cyprus has no director residence rule, but every company needs its accounts audited or reviewed, which Irish small companies avoid. Our Cyprus company formation guide has the full cost breakdown. For the questions founders ask most, see the Cyprus company formation FAQ, and for what makes a company genuinely Cyprus resident, the company substance guide.

Living there: residence for UK citizens

Ireland is part of the Common Travel Area with the UK. British citizens can live and work in Ireland without a visa or permit. That's a big practical advantage.

Cyprus is not. Since Brexit, a UK-only passport holder needs a permit to live in Cyprus. Founders usually get one through a work permit from a Cyprus company of foreign interests (with a €200,000 investment in Cyprus and a salary of at least €2,500 a month), the start-up visa, the digital nomad visa, or permanent residence by investment (€300,000 + VAT). Our entrepreneurs hub compares the routes.

If you or your spouse holds an Irish passport, you can use EU free movement in Cyprus too — which removes the permit question entirely. If you're still choosing which EU country to live in, our Cyprus vs Portugal comparison covers another popular option.

Free introduction

Not sure whether Cyprus or Ireland fits your business?

We introduce you to a vetted adviser who runs the numbers for your profit level, extraction plan and exit timing. The introduction is free.

Side-by-side tax for your actual profits
Residence and director requirements checked
Cyprus company set-up co-ordinated if it wins

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IP, R&D and growth incentives

Cyprus IP box: 80% of qualifying profit from IP developed by the company is exempt, which works out at about 3% at the 15% rate. Cyprus also gives a 120% super-deduction for qualifying R&D spending until 2030, and keeps its notional interest deduction on new equity.

Two hikers walking through the narrow limestone walls of Avakas Gorge in spring — Avakas Gorge, a weekend walk from Paphos

Ireland's Knowledge Development Box now taxes qualifying IP profit at 10% (it was 6.25% until 2023), and currently runs for accounting periods starting before 1 January 2027. Ireland's R&D tax credit rose to 35% from 2026, and it can be paid out in cash.

Both follow the OECD nexus approach: the relief depends on R&D actually being done by the company. For a funded tech start-up that will spend heavily on R&D and hire, Ireland's credit and talent pool are hard to beat. For a founder-owned IP business that pays out profits, Cyprus usually leaves more.

Cyprus: the trade-offs

Why founders pick Cyprus

Lowest total tax for an owner who takes dividends as a non-dom

No Cyprus tax on selling shares in a trading company

No resident-director rule; 0% withholding on dividends to non-residents

Lower cost of living in Paphos than in Dublin

What to weigh up

15% corporate rate is higher than Ireland's 12.5%

Residence permit needed for UK-only passport holders

Every company needs an audit or review

VAT registration from €15,600

Ireland: the trade-offs

Why founders pick Ireland

12.5% on trading profits, the lowest headline rate

UK citizens can live and work there with no permit

Audit exemption for small companies

Deep English-speaking talent pool and 35% R&D credit

What to weigh up

Dividends taxed at up to 40% plus USC and PRSI

33% CGT above Entrepreneur Relief

EEA-resident director or €25,000 bond

Close company surcharge on undistributed profits

Who should choose which?

Cyprus

Consultant or agency owner paying out profits

Cyprus usually wins by a wide margin if you'll live there as a non-dom.

Ireland

Funded start-up hiring engineers

Ireland's talent pool, R&D credit and Common Travel Area are hard to beat.

Cyprus, with care

Founder planning to sell in 3–5 years

Cyprus has no share gains tax — but check the UK five-year rule first.

Neither

Owner staying in the UK

Neither. A company run from the UK is likely UK resident. Keep it simple.

Vineyards near Kathikas at golden hour in autumn with the sea far below — Vineyards on the Laona plateau near Kathikas

Frequently asked questions

For a UK founder who will live in Cyprus and take profits as dividends, Cyprus usually is — about 17% total tax against roughly 49% in Ireland on €150,000. Ireland is better if you'll live in Ireland, reinvest most profits or need its talent and R&D credit.

Leaning towards Cyprus?

Get a free introduction to a vetted Cyprus corporate lawyer and a UK–Cyprus tax adviser, or start with your full relocation plan.

Set up my Cyprus company Compare Cyprus with Malta

Sources checked for this page

1.PwC Worldwide Tax Summaries — Cyprus, taxes on corporate incomeProfessional
2.KPMG — Cyprus tax reform enacted, effective 1 January 2026Professional
3.Cyprus Tax Department — Special Defence Contribution (Greek)Government
4.PwC Worldwide Tax Summaries — Cyprus, taxes on personal incomeProfessional
5.Registrar of Companies — Forms & feesGovernment
6.businessincyprus.gov.cy — Registering for income tax and VATGovernment
7.Cyprus Ministry of Finance — Double tax treatiesGovernment
8.PwC Worldwide Tax Summaries — Cyprus, tax credits and incentivesProfessional
9.PwC Worldwide Tax Summaries — Ireland, corporate taxesProfessional
10.PwC Worldwide Tax Summaries — Ireland, personal income taxesProfessional
11.Revenue (Ireland) — Close company surchargeGovernment
12.Revenue (Ireland) — Dividend withholding tax exemptions for non-residentsGovernment
13.Revenue (Ireland) — Revised Entrepreneur ReliefGovernment
14.Revenue (Ireland) — Knowledge Development BoxGovernment
15.Revenue (Ireland) — VAT thresholdsGovernment
16.Revenue (Ireland) — Double taxation treatiesGovernment
17.Revenue (Ireland) — Dividend incomeGovernment
18.Companies Act 2014 s137 (Ireland) — EEA-resident director or bondGovernment
19.KPMG Ireland — Budget 2026 R&D incentivesProfessional
20.Maples Group — Increased company size thresholds for audit exemption in IrelandProfessional
21.gov.uk — Common Travel Area guidanceGovernment
22.Business Support Center (MECI) — Registration of companies with foreign interestsGovernment
23.HMRC International Manual INTM120060 — central management and controlGovernment
24.PwC Worldwide Tax Summaries — Cyprus, corporate residenceProfessional
25.Open Forest — Registering a company in Ireland (CRO fee, bond cost, annual return timing)Experience
26.Registrar of Companies — Late filing of annual returnsGovernment

Written by

Jason

Founder, Paphos Advisor

British founder who moved his family from the UK to Paphos in 2025. I write down what I learned doing it properly — the tax, the residency and the living-here detail — and introduce people to the specialists I’d use myself.

How I research and fact-check

Cyprus vs Ireland Company Formation: Which Is Better for a UK Founder in 2026?

Cyprus vs Ireland company formation at a glance

Corporate tax: 12.5% beats 15%, but only at company level

Worked example: €150,000 profit paid out to the owner

Personal tax on dividends decides it for most founders

Selling your company

Setting up and running the company

Living there: residence for UK citizens

Not sure whether Cyprus or Ireland fits your business?

IP, R&D and growth incentives

Cyprus: the trade-offs

Ireland: the trade-offs

Who should choose which?

Consultant or agency owner paying out profits

Funded start-up hiring engineers

Founder planning to sell in 3–5 years

Owner staying in the UK

Frequently asked questions

Is Cyprus or Ireland better for company formation?

What is the corporate tax rate in Cyprus vs Ireland?

Can a UK citizen set up a company in Ireland?

Can a UK citizen set up a company in Cyprus?

Do Irish companies need an audit?

Does Cyprus or Ireland tax the sale of my company?

How much does it cost to set up a company in Ireland?

Why do companies base themselves in Ireland?

Is Ireland or Cyprus a tax haven?

Can I own an Irish company and live in Cyprus?

Sources checked for this page

Keep reading

Cyprus vs Ireland company formation at a glance

Corporate tax: 12.5% beats 15%, but only at company level

Worked example: €150,000 profit paid out to the owner

Personal tax on dividends decides it for most founders

Selling your company

Setting up and running the company

Living there: residence for UK citizens

Not sure whether Cyprus or Ireland fits your business?

IP, R&D and growth incentives

Cyprus: the trade-offs

Ireland: the trade-offs

Who should choose which?

Consultant or agency owner paying out profits

Funded start-up hiring engineers

Founder planning to sell in 3–5 years

Owner staying in the UK

Frequently asked questions

Is Cyprus or Ireland better for company formation?

What is the corporate tax rate in Cyprus vs Ireland?

Can a UK citizen set up a company in Ireland?

Can a UK citizen set up a company in Cyprus?

Do Irish companies need an audit?

Does Cyprus or Ireland tax the sale of my company?

How much does it cost to set up a company in Ireland?

Why do companies base themselves in Ireland?

Is Ireland or Cyprus a tax haven?

Can I own an Irish company and live in Cyprus?