What is the corporate tax rate in Cyprus in 2026?

15%, from 1 January 2026. It was 12.5% before the tax reform.

How much tax does a founder pay on dividends in Cyprus?

If you are Cyprus tax resident and non-domiciled, 0% Special Defence Contribution plus the 2.65% GeSY contribution, capped at €180,000 of income. Cyprus-domiciled residents pay 5% SDC on dividends from 2026 profits.

Can I keep my UK limited company if I move to Cyprus?

You can, but if you run it from Cyprus it can become tax resident in both countries. It works best if UK-based directors genuinely manage it. See running a UK business from abroad.

Do I pay UK capital gains tax if I sell my company after moving to Cyprus?

Usually not on shares in a UK trading company once you are non-resident. But if you return to the UK within 5 years, the gain is taxed in the year you return.

How much money do I need to get a work permit through my own Cyprus company?

The company of foreign interests route needs a €200,000 investment in Cyprus, separate business premises, and a salary of at least €2,500 a month for you as a highly paid employee or director.

Is Cyprus a tax haven?

No. Cyprus is an EU member state that applies EU and OECD rules, including the 15% minimum tax, and it is not on the EU list of non-cooperative jurisdictions. Its low personal tax on dividends comes from the non-dom regime, which has conditions.

How long does it take to move a business to Cyprus?

Plan on 6–12 months from first advice to trading from Paphos. Company formation takes 6–10 working days, the bank account 3–6 weeks, and a director permit decision about one month.

How much income tax do you pay in Cyprus?

From 2026, 0% on the first €22,000, then 20% to €32,000, 25% to €42,000, 30% to €72,000 and 35% above. Dividends and interest aren't subject to income tax; a non-dom pays only the 2.65% GeSY contribution on them.

Is Cyprus income tax free?

No, but the first €22,000 of income is tax-free from 2026, and a non-domiciled resident pays no income tax or SDC on dividends. See the non-dom glossary entry for how the status works.

Is there a 2.5% tax in Cyprus?

Not any more. The old '2.5%' figure was the effective rate on qualifying IP profit under the IP box: 80% of the profit is exempt, and 20% was taxed at 12.5%. With corporate tax at 15% from 2026, the effective IP box rate is about 3%.

Does Cyprus have a tax treaty with the UK?

Yes. The 2018 UK–Cyprus Double Taxation Convention decides which country taxes your income and gives credit where both do. It also has the tie-breaker for companies resident in both countries (Article 4(4)).

Can I be self-employed in Cyprus instead of forming a company?

Yes. You register with the Tax Department and Social Insurance Services and pay income tax plus 16.6% social insurance and 4% GeSY on your profit. Above about €30,000 of profit, a company usually costs less for a non-dom. See our company formation guide.

Paphos harbour and fort at golden hour with fishing boats on calm water

For founders and business owners

Entrepreneurs Moving to Cyprus: Keep, Move or Sell Your UK Company?

Cyprus taxes company profits at 15% and, for a non-domiciled resident, dividends at just the 2.65% health contribution. But the savings only hold if you get three things right: where your company is really run, when you leave the UK, and which residence permit lets you work here.

Get my founder relocation plan Talk to a UK–Cyprus tax adviser

The short version

Corporate tax is 15% from 1 January 2026 (up from 12.5%). The UK main rate is 25%.

Non-dom residents pay 0% Special Defence Contribution on dividends — only the 2.65% GeSY health contribution, capped at €180,000 of income.

Your UK company is UK resident for ever (it was incorporated there). Run it from Paphos and Cyprus can treat it as resident too.

Return to the UK within 5 years and HMRC can tax the dividends you took while away, and the gain on a sale.

A Cyprus company is not a visa. UK-only passport holders usually live here through a work permit from a qualifying company (€200,000 investment, €2,500/month salary), the start-up visa or permanent residence.

Budget about €1,900–€2,300 to form a Cyprus Ltd and €2,000–€5,000 a year for accounts, audit and filings.

Guides for founders moving to Cyprus

Start with the decision you're facing. Each guide goes deeper than this overview.

Laptop and coffee on a balcony of a limestone office building in Paphos old town

Guide

Company formation in Cyprus

The five steps, the real cost and every annual filing for a Cyprus Ltd.

Explore

Home office desk facing an open window with olive trees and a distant sea view in Paphos

Guide

Running a UK business from abroad

Keep, move or run both: how each structure is taxed once you live in Cyprus.

Explore

Small meeting room in a Paphos office with a window onto a limestone street

Guide

Company substance

What makes a Cyprus company genuinely Cyprus resident — and what fails.

Explore

Person working on a laptop on a shaded terrace overlooking the sea near Paphos

Blog

UK company from Cyprus: the risks

Dual residence, a Cyprus PE and the five-year rule, explained.

Explore

Calculator, plain invoices and an espresso on a café desk in Paphos

Blog

Cyprus VAT mistakes

The €15,600 threshold, reverse charge and the other traps.

Explore

A sunny Paphos street beside a green Irish coastal village street

Comparison

Cyprus vs Ireland for your company

Which EU base suits an owner-managed business in 2026.

Explore

Notebook and coffee on a wooden table in a sunny Paphos courtyard

FAQ

Company formation FAQ

Quick answers on cost, timing, directors and banks.

Explore

Two people reviewing documents at a table in a bright Paphos office

Service

Company formation service

Free introduction to a vetted Cyprus corporate lawyer and accountant.

Explore

The numbers that matter to founders

15%

Cyprus corporate tax

From 1 Jan 2026

2.65%

GeSY on a non-dom's dividends

0% SDC; capped at €180,000

60 days

Minimum stay for tax residency

Under the 60-day rule

€2,500

Monthly salary for a director work permit

Via a company of foreign interests

Why entrepreneurs moving to Cyprus end up here

UK founders look at Cyprus for one reason first: what you keep when you take money out of your company.

A Cyprus company pays 15% corporate tax. If you are Cyprus tax resident but not domiciled in Cyprus — which covers almost every British founder for their first 17 years here — your dividends carry 0% Special Defence Contribution (SDC). The only charge is the 2.65% contribution to GeSY, the national health system, and that stops at €180,000 of income a year. See our non-dom guide for how the status works.

Here's a simple example. A Cyprus company makes €150,000 profit and pays it all out to a non-dom owner:

	Amount
Corporate tax at 15%	€22,500
Dividend paid out	€127,500
GeSY at 2.65% on the dividend	€3,379
Total tax	€25,879 (about 17.3%)

Limassol's seafront towers at blue hour seen from the coast road — Limassol, where many banks and larger firms are based, is along the coast to the east

The same profit through a UK company taxed at 25%, then paid as dividends mostly taxed at the 35.75% upper rate (from April 2026), costs roughly two and a half times as much. That gap is the reason founders move. Our tax route finder shows which Cyprus residency route fits you.

The example leaves out salary, which most founders take to qualify for a residence permit and the 60-day rule — covered below. It also assumes the company really is run from Cyprus. That is the part people get wrong.

Founder note

“The tax numbers are real, but they're the easy part. The questions that cost founders money are about timing and control: when you stop being UK resident, who actually runs the company, and whether you might come back within five years.”

JJasonFounder, Paphos Advisor — moved his family from the UK to Paphos in 2025

Your UK company: keep it, move it or sell it?

Keeping your UK Ltd works if the company is genuinely managed in the UK — by UK-based directors who make the real decisions. You then take dividends as a Cyprus resident.

The risk: a UK company is always UK resident because it was incorporated there (CTA 2009 s14). If you, the sole director, run it from Paphos, Cyprus can also treat it as resident because its management and control is here. The company is then dual resident, and under Article 4(4) of the UK–Cyprus treaty it loses most treaty benefits until the two tax authorities agree where it belongs. Working from a Cyprus home office for more than half your time can also create a Cyprus permanent establishment.

Works for: founders stepping back to a chair or investor role, with a real UK management team. Read the seven risks of running a UK company from Cyprus.

For a founder who will live and work in Paphos, a Cyprus company run from Cyprus is usually the cleanest structure. The company pays 15%, you are its resident director, and your dividends are taxed as above.

What it takes: a Cyprus Ltd (about €1,900–€2,300 to form), a Cyprus bank account, a Cyprus accountant and auditor, VAT registration once sales pass €15,600, and real substance. Your UK clients must be willing to contract with the Cyprus company.

Getting there: some founders start fresh and let the UK company run down. Others keep both for a transition, which needs intercompany agreements and transfer pricing. Closing the UK company? Watch the section 396B rule: carry on a similar trade within 2 years of a winding-up and the distribution can be taxed as a dividend. Start with our Cyprus company formation guide, which also compares a company with working as a sole trader in Cyprus: on €60,000 of profit, about 17% total tax through a company against about 37% self-employed.

Cyprus does not tax gains on shares, except shares in companies holding Cyprus property. The UK does not normally charge capital gains tax on a non-resident's sale of shares in a UK trading company (TCGA 1992 s1A). So a founder who sells after becoming Cyprus resident can pay no capital gains tax on the sale.

The catches:

Five-year rule. If you were UK resident for 4 of the 7 tax years before leaving and you return within 5 years, the gain is taxed in the year you come back (TCGA s1M), and the treaty does not stop it.
You must actually have left. Your UK residence is decided by the Statutory Residence Test. A sale agreed while you are still UK resident — even in a split year — can stay in the UK net.
Compare with staying. UK Business Asset Disposal Relief is 18% on up to £1 million of lifetime gains from 6 April 2026. For a small exit, moving just to save tax may not be worth it.

Exit timing is the single most valuable conversation to have before you move. Get a UK–Cyprus tax adviser involved at least 12 months ahead.

Watch out

The five-year rule got tougher in 2026

From 2026-27, Finance Act 2026 removed the exemption for dividends paid out of profits earned after you leave. If you return to the UK within five years, close-company dividends you took while abroad can be taxed in your year of return, whenever the profits were made. Plan on staying away at least five full years, or take advice on how much to distribute.

The coast road past Petra tou Romiou at sunset

Which set-up fits you? A quick decision table

Find the row closest to your plans. Each one links to the guide that goes deeper.

Your situation	Usual structure	Usual residence route (UK-only passport)	Watch out for
Freelancer or consultant, clients outside Cyprus, modest profits	Keep a UK or other foreign company, or work as a sole trader	Digital nomad visa (net €3,500 a month from abroad)	A foreign company run from Paphos can become Cyprus resident
Consultant or agency owner moving for good, profits above about €30,000	Cyprus Ltd run from Paphos	Work permit through a company of foreign interests, if you can invest €200,000	Audit costs, VAT from €15,600, real substance
Owner with a UK team who will keep running the UK business	Keep the UK company, UK-managed	Digital nomad visa or permanent residence	UK directors must really decide; five-year rule on dividends
Innovative tech start-up raising money	Cyprus Ltd with real R&D in Cyprus	Start-up visa (scheme runs to December 2026)	Check the scheme is renewed before you plan around it
Selling the business in the next 1–3 years	Sell after you've left the UK; stay away 5 full years	Permanent residence (€300,000 + VAT) or Category F	SRT departure date; TCGA s1M if you return early
Stepping back to live on dividends	Keep the company UK-managed, or a Cyprus holding company	Permanent residence or Category F	Neither route lets you work in Cyprus

A guide, not advice. Residence figures from the Migration Department and Business Support Center; checked September 2026. Get your own case checked by a UK–Cyprus tax adviser.

Myth

Myth: "Form a Cyprus company and you pay 15%, wherever you live"

Reality

A Cyprus-incorporated company is Cyprus resident by default, but the UK taxes any company whose real decisions are made in the UK. Run your Cyprus company from Surrey and HMRC treats it as UK resident, taxable at up to 25%, with the treaty deciding which country wins. The 15% only holds if you, or a real board, run the company from Cyprus. Our company substance guide shows what that takes.

How UK founders get the right to live in Cyprus

A company does not give you residence. Since Brexit, a UK-only passport holder moving to Cyprus is a third-country national and needs a permit. If you or your spouse holds an Irish or other EU passport, you can register under EU free movement instead with a yellow slip.

Paphos harbour and fort in early morning light with fishing boats — Paphos harbour and its medieval fort at first light

The main routes for founders:

Residence routes for UK founders

Each route suits a different stage of your business.

Route	Key requirements	Can you work for your own company?	Best for
Work permit via a company of foreign interests	Company registered with the Business Support Center; €200,000 investment in Cyprus; office separate from a home; you're paid at least €2,500/month gross on a 2-year contract	Yes — as an employee or director of the company	Founders moving a real business, with capital
Start-up visa	Innovative start-up under 5 years old; business plan scored by independent evaluators; founders hold at least 25%	Yes	Tech and innovation founders
Digital nomad visa	Net income of at least €3,500/month from an employer or clients outside Cyprus	No — you must not work for a Cyprus employer	Keeping a UK company with UK clients
Permanent residence (Regulation 6(2))	€300,000 + VAT investment (usually new property); €50,000 secured annual income	Unpaid director and dividends only — no salary	Founders living on dividends or exit proceeds
Category F	Secured income from abroad; no work in Cyprus	No	Retired or fully passive owners

Sources: Business Support Center (MECI), Migration Department (gov.cy/mip-md), Deputy Ministry of Research start-up visa guide. Checked September 2026. The start-up visa scheme currently runs to December 2026; sources differ on its minimum capital (the official guide states none; some law firms quote €10,000). Always confirm with an immigration lawyer.

The director work permit route in more detail

This is how most UK founders who move a real business here get residence. It sits under Cyprus's strategy for attracting companies of foreign interests, which the Business Support Center of the Ministry of Energy, Commerce and Industry now runs (it absorbed the old Business Facilitation Unit in 2025).

A small meeting room in a restored stone townhouse in Paphos with afternoon light — A board meeting room in a restored Paphos townhouse

The company must:

Be majority-owned by third-country nationals (a UK founder counts), or fall into one of the other qualifying categories.
Invest at least €200,000 in Cyprus — a deposit in a Cyprus bank or spending on office space and equipment — within the 6 months before applying. Buying property to live in does not count.
Have business premises separate from any home, on a lease of at least 12 months.

You, as a highly paid employee or director, need:

A gross salary of at least €2,500 a month and a contract of at least 2 years.
A relevant degree or at least 2 years' relevant experience.

Registration with the Business Support Center takes up to 10 working days. The Migration Department aims to decide the temporary residence and employment permit within one month, and permits run for up to 3 years, renewable. Your spouse can work, and the Migration Department can let your family join you straight away.

There is also a staffing ratio. Over 5 years, no more than 70% of staff should be third-country nationals, and the Migration Department says it will check this for new hires from 1 January 2027.

Tip

No €200,000 to park?

Founders who can't make the €200,000 investment usually look at the start-up visa (for innovative businesses) or, if they're keeping a UK company with clients outside Cyprus, the digital nomad visa. Neither is right for everyone, so get the route checked before you commit to a structure.

Your personal tax residency: the 60-day rule and the SRT

Two tests decide where you pay personal tax, and you need both to work.

Cyprus side. You become Cyprus tax resident by spending more than 183 days here, or under the **60-day rule. The 60-day rule suits founders who travel: at least 60 days in Cyprus, no more than 183 days in any other single country, a permanent home here (owned or rented), and a business, job or **directorship of a Cyprus tax-resident company kept up to 31 December. PwC and KPMG say the 2026 reform removed the old condition that you must not be tax resident anywhere else; the Tax Department's own page and form TD126 still show it, so check with your adviser.

UK side. The UK Statutory Residence Test decides whether you have left, not a day count. Keeping a UK home or working in the UK can keep you UK resident. Tell HMRC you've gone on your tax return or form P85.

A person on a video call from a shaded balcony in Paphos, seen from behind — Morning calls with the UK, two hours behind

Salary. If you pay yourself the €2,500 a month a work permit needs, that €30,000 is taxed at Cyprus income tax rates: 0% up to €22,000, then 20% up to €32,000. Employee social insurance (8.8%) and GeSY (2.65%) apply on top, and the company pays employer contributions. New residents can also exempt part of a Cyprus salary: 50% of pay over €55,000 a year for up to 17 years, or 20% (capped at €8,550 a year) for 7 years if you worked outside Cyprus before. Check with your accountant which one your directorship qualifies for. Our UK to Cyprus tax planning guide covers the full picture.

Check which Cyprus tax route fits you

Answer a few questions about your days, home, income and company. The quiz shows whether the 60-day or 183-day rule fits, and what to ask an adviser.

Free toolCyprus tax route finder

1 / 10

How many days will you spend in Cyprus this calendar year?

Arrival day counts as a day in Cyprus; departure day counts as a day outside.

Sources: Cyprus Tax Department: Tax residency · Cyprus Tax Department: Form TD126 (60-day rule declaration) · Cyprus Tax Department: Form TD38 (non-dom declaration) · PwC Worldwide Tax Summaries: Cyprus individual residence (reviewed 4 Aug 2026) · PwC Worldwide Tax Summaries: Cyprus individual income determination · KPMG Cyprus: Tax residency and non-dom rules (April 2026) · Health Insurance Organisation: GHS financing and contributions · HMRC: RDR3 Statutory Residence Test guidance · GOV.UK: Tax if you leave the UK to live abroad (P85) · GOV.UK: Cyprus tax treaties (2018 convention and 2019 protocol)

Your founder move roadmap

Most founders need 6–12 months from first advice to trading from Paphos.

1
Get the structure and exit plan agreed
12 months before
Meet a UK–Cyprus tax adviser. Decide: keep, move or sell the UK company; how long you'll stay; your departure date for SRT purposes.
2
Choose your residence route
9–6 months before
Company of foreign interests, start-up visa, digital nomad visa or permanent residence. Line up the €200,000 or other investment if you need it.
3
Form the Cyprus company and open the bank account
6–3 months before
6–10 working days to incorporate; 3–6 weeks for the bank. Register for tax, VAT and Social Insurance.
4
Rent a home and an office in Paphos
3–1 months before
You need a permanent home for the 60-day rule and separate premises for a director permit.
5
Apply for your permit and move
Month 0
Register the company with the Business Support Center, then apply for your residence and employment permit.
6
Leave the UK properly
Year of departure
Report your departure to HMRC, stop managing the UK company from Cyprus (or hand it over), and keep a day-count log.
7
Run it with substance
Every year
Board decisions in Cyprus, local accounts and audit, Cyprus bank account in use. Claim non-dom and the 60-day rule each year.

Free for founders

Get a founder relocation plan

Tell us about your company, your exit plans and your timing. We'll map the structure, residence route and advisers you need, and introduce you to vetted UK–Cyprus specialists. Free, no obligation.

Keep, move or sell: the right structure for your company
The residence permit that fits your business
Introductions to a tax adviser, corporate lawyer and accountant

Founder-led. Replies within one working day.

What it costs to run a small Cyprus company

Cheaper than many founders fear, but more admin than a UK Ltd because every company needs an audit or review.

Item	Typical cost	How often
Company formation (Registrar, lawyer, certificates)	€1,900–€2,300	Once
Bookkeeping	€80–€150 a month	Monthly
Audit or review (small company)	€1,000–€2,000	Yearly
VAT returns (if registered)	€100–€200 per return	Quarterly
Annual return to the Registrar (HE32)	€20	Yearly
Company secretary and registered office	Quoted by provider	Yearly
Annual company levy	€0 — abolished from 2024	—

Registrar fees from companies.gov.cy; professional fee ranges from Cyprus corporate service providers (2026). Our accounting services page explains what an accountant covers.

Cyprus for UK founders: the honest trade-offs

What works

15% corporate tax and 0% SDC on dividends for non-doms

No Cyprus tax on gains from selling shares (except Cyprus-property companies)

EU member with the euro and a UK tax treaty

English widely used in business and the courts use a common-law system

Company formation in under two weeks, done remotely

What to watch

A UK-only passport means a separate residence permit — the director route needs €200,000

Every company needs an audit or review, and VAT registration starts at €15,600

Banks are slow and thorough on source of funds

Getting management and control wrong can leave you taxed in both countries

Returning to the UK within 5 years can undo the tax savings

A family walking along the beach at Geroskipou at sunset, seen from behind — Geroskipou beach at sunset, on the edge of Paphos

Frequently asked questions

Yes. Anyone can own and direct a Cyprus company. To live here and work in it, a UK-only passport holder also needs a residence and work permit, usually through a company of foreign interests or the start-up visa.

Bright co-working space in a restored stone building in Paphos

Start here

Moving your business to Paphos?

Get a free relocation plan built around your company: the structure, the residence route, the timeline and the advisers you'll need.

Get my founder plan Set up a Cyprus company

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 — Tax reform 2026 (Greek)Government
4.Cyprus Tax Department — Special Defence Contribution (Greek)Government
5.PwC Worldwide Tax Summaries — Cyprus, taxes on personal incomeProfessional
6.PwC Worldwide Tax Summaries — Cyprus, individual residenceProfessional
7.Cyprus Tax Department — Tax residencyGovernment
8.KPMG Cyprus — Tax residency and non-dom rules (April 2026)Professional
9.Business Support Center (MECI) — Registration of companies with foreign interestsGovernment
10.Migration Department — Legislation and policy (employment of third-country nationals by companies of foreign interests)Government
11.Revised strategy for attracting businesses (February 2024)Government
12.KPMG Cyprus — Immigration services alert (companies of foreign interests)Professional
13.Deputy Ministry of Research — Start-up Visa practical guideGovernment
14.Migration Department — Digital nomads and family membersGovernment
15.Migration Department — Immigration permits for investors (Regulation 6(2))Government
16.Migration Department — Immigration permits (Category F and others)Government
17.Migration Department — Family reunificationGovernment
18.legislation.gov.uk — CTA 2009 s14 (UK-incorporated companies are UK resident)Government
19.gov.uk — 2018 UK–Cyprus Double Taxation Convention (as amended)Government
20.legislation.gov.uk — ITA 2007 s812A (close company dividends, temporary non-residence)Government
21.legislation.gov.uk — Finance Act 2026 Schedule 3 (temporary non-residence changes)Government
22.legislation.gov.uk — TCGA 1992 s1A (non-residents and UK CGT)Government
23.legislation.gov.uk — TCGA 1992 s1M (gains during temporary non-residence)Government
24.gov.uk — Business Asset Disposal ReliefGovernment
25.gov.uk — Tax on dividendsGovernment
26.gov.uk — Corporation Tax rates and allowancesGovernment
27.legislation.gov.uk — ITTOIA 2005 s396B (winding-up anti-avoidance)Government
28.gov.uk — RDR3 Statutory Residence Test guidanceGovernment
29.Registrar of Companies — Forms & feesGovernment
30.businessincyprus.gov.cy — Registering for income tax and VATGovernment
31.PwC Worldwide Tax Summaries — Cyprus, corporate residenceProfessional
32.PwC Worldwide Tax Summaries — Cyprus, individual other taxes (social insurance, GeSY)Professional
33.PwC Worldwide Tax Summaries — Cyprus, income determination (employment income exemptions)Professional
34.PwC Worldwide Tax Summaries — Cyprus, tax credits and incentives (IP box)Professional

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

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