Anonymized real-world examples
Cyprus Non-Dom: Tax Case Studies
Five anonymized scenarios showing the before-and-after tax position for entrepreneurs from different countries who relocated to Cyprus under the Non-Dom regime. Numbers are calculated using published 2026 tax rates.
German SaaS Founder
Self-employed SaaS entrepreneur, German GmbH, 100% owner, no employees
€150,000 company revenue, no salary, all profit distributed as dividends. Business expenses: €12,000 (software, hosting, home office). Previous structure: German GmbH.
10-year saving: €478,610 (not accounting for investment returns)
Before - Germany
Germany — GmbH + personal dividends
Effective rate: 54.9%
After - Cyprus Non-Dom
Effective rate: 15.9% - Take-home: €114,192
Key notes for this scenario
- -Saving calculation: €70,983 (Germany taxes) minus €23,808 (Cyprus taxes) = €47,175 per year
- -German Wegzugsteuer (exit tax) applies on unrealised share gains above €500k at time of departure - plan ahead
- -German Abmeldung (deregistration) must be completed; Wohnsitz must be formally cancelled
- -Sabine model: Cyprus Ltd is the operating company; German GmbH optionally retained as holding during transition
- -Substance requirement: at least majority of board decisions must be made in Cyprus
Planning considerations
- -Wegzugsteuer planning if GmbH shares have significant unrealised gains
- -German social insurance contributions cease upon deregistration
- -Cyprus Yellow Slip (MEU1) required within 3 months of establishing Cyprus residence
- -Annual accounting cost in Cyprus: ~€3,000-4,000
UK Management Consultant
Former UK Ltd company director, independent management consultant, B2B clients
€100,000 company revenue (approx £86,000 at 1.16 exchange rate). Salary at UK personal allowance (£12,570). Remainder distributed as dividends. UK non-dom regime abolished April 2025.
10-year saving: €461,130 (not accounting for investment returns)
Before - United Kingdom
UK — Personal Service Company (post-April 2025)
Effective rate: 62.8%
After - Cyprus Non-Dom
Effective rate: 16.7% - Take-home: €81,447
Key notes for this scenario
- -UK non-dom regime abolished April 6, 2025 — no longer available as a mitigation strategy
- -UK corporation tax is 25% for profits above £250,000 (19% small company rate for profits below £50,000)
- -UK dividend allowance reduced to £500 (2024-25 onwards); tax rate 33.75% for higher-rate taxpayers
- -Cyprus salary set at €12,000 to minimize employer social insurance while maintaining GESY coverage
- -60-day rule can be used if client visits to UK remain under 183 days per calendar year
Planning considerations
- -Statutory residence test (SRT): must break UK tax residency formally
- -IR35 rules no longer apply once genuinely operating as Cyprus Ltd with non-UK clients
- -NHS replaced by GESY — comparable quality at lower cost
- -UK pension rights preserved; UK NI contributions history maintained
Spanish E-Commerce Operator
Online retailer, dropshipping + own products, selling across EU
€200,000 gross revenue, €40,000 cost of goods + expenses (all deductible). Net profit €160,000 distributed as dividends. No employees. Previously operating as Spanish autónomo.
10-year saving: €370,800 (not accounting for investment returns)
Before - Spain
Spain — autónomo (self-employed)
Effective rate: 40.4%
After - Cyprus Non-Dom
Effective rate: 13.8% - Take-home: €132,396
Key notes for this scenario
- -Spanish autónomo social contributions are now income-based (2023 reform); actual contributions depend on earnings level
- -IRPF rates: 19% up to €12,450, 24% to €20,200, 30% to €35,200, 37% to €60,000, 45% to €300,000, 47% above €300,000
- -EU OSS (One-Stop Shop) registration in Cyprus handles VAT on EU e-commerce sales from a single filing
- -Spanish exit tax (Impuesto de Salida) applies if Spanish business shares exceed €1M or 25% stake
- -Hacienda residency test: physical presence and habitual place of business — must genuinely relocate
Planning considerations
- -Spanish exit tax planning if holding company shares with unrealised gains
- -VAT: register for EU OSS in Cyprus; handle Spanish VAT reclaim for existing inventory
- -Supplier contracts may need updating to reflect new Cyprus entity
- -Family situation affects income splitting strategies
Dutch Freelance Designer
Independent brand and UX designer, international clients, fully remote
€80,000 annual revenue, €5,000 business expenses (software, equipment, travel). No employees. Previously Dutch ZZP'er (self-employed) structure.
10-year saving: €175,200 (not accounting for investment returns)
Before - Netherlands
Netherlands — ZZP (eenmanszaak)
Effective rate: 38.1%
After - Cyprus Non-Dom
Effective rate: 16.2% - Take-home: €62,061
Key notes for this scenario
- -Dutch zelfstandigenaftrek (self-employed deduction) being phased out by 7.5% per year; drops from full €7,280 to €900 by 2027
- -Netherlands Box 2 (substantial shareholding): 24.5% tax on first €67,804 dividends, then 33% — applies to DGA (company owner) structure
- -DGA (Directeur-Grootaandeelhouder) must pay minimum salary of ~€56,000/year, which raises the effective tax considerably
- -At €80k revenue, ZZP is often more tax-efficient than BV in Netherlands — this comparison uses ZZP baseline
- -60-day rule is feasible at this income level; maintain genuine Cyprus substance
Planning considerations
- -Dutch 30% ruling may apply if not yet used (exempt from Dutch income tax on 30% of salary for first 5 years)
- -ZZP vs BV decision affects Dutch baseline significantly
- -Zorgtoeslag (healthcare allowance) lost upon emigration
- -Relatively low income level means absolute saving (€17.5k) is significant but relocation costs matter more
US Remote Software Engineer
US citizen, employed by US tech company, working fully remotely, explores Cyprus for lifestyle
€120,000 annual salary (approx $130,000) from US employer. No company structure — individual employee. US citizenship means worldwide taxation regardless of residence.
10-year saving: €266,400 (not accounting for investment returns)
Before - USA
USA — federal + state income tax (California average)
Effective rate: 33.7%
After - Cyprus Non-Dom
Effective rate: 11.5% - Take-home: €106,260
Key notes for this scenario
- -US citizens are taxed on worldwide income regardless of residence — cannot fully escape US taxes without renouncing citizenship
- -Foreign Earned Income Exclusion (FEIE) excludes up to $126,500 (2024) of foreign-earned income from US federal tax
- -FEIE requires bona fide residence test or physical presence test (330 days outside US)
- -Cyprus social insurance: must contribute if working in Cyprus, even for US employer (EU social security coordination)
- -Form 1116 (Foreign Tax Credit) is alternative to FEIE if Cyprus taxes are paid at company level
- -FBAR filing required if Cyprus bank accounts exceed $10,000 at any point in the year
- -California is known for aggressively asserting tax residency even after departure — establish Nevada or no-state-tax address first
Planning considerations
- -US employer may require physical presence in same timezone or jurisdiction
- -Social security totalization agreement between US and Cyprus prevents double SI contributions
- -FATCA compliance: Cyprus banks report US account holders to IRS automatically
- -Renouncing citizenship (extreme option) eliminates US tax burden but triggers Exit Tax on unrealised gains
Model your own scenario
Use the Cyprus tax calculator to input your specific revenue, salary, and expenses and get your own effective rate.
All case studies use published 2026 tax rates. Home country rates are from PwC Worldwide Tax Summaries 2026, EY Country Tax Guides 2026, and official government sources. Cyprus rates: 15% corporate tax + 2.65% GHS on net dividends (Non-Dom). Individual results vary based on specific circumstances, deductions, timing, and treaty provisions. Not tax advice.