Moving to Cyprus from India: Residency-by-Investment, Non-Dom Tax and LRS Structuring Guide 2026

Why are Indians moving to Cyprus in 2026?

Indians are moving to Cyprus in 2026 because it combines full European Union access, a familiar common-law legal system and one of the lowest personal tax burdens in Europe for internationally mobile individuals. For an NRI, founder or HNWI leaving India, Cyprus offers a legally clean route to EU residence plus a 17-year window of near-zero tax on investment income, funded lawfully out of India under Reserve Bank of India rules.

EU access, English-language courts and a common-law legal system

Cyprus gives an Indian resident a foothold inside the EU single market, with the right to live in Cyprus indefinitely once permanent residency is granted. Cyprus law is rooted in the English common-law tradition, and English is used widely in commerce and legal drafting, so contracts, company law and court procedure feel familiar to anyone used to Indian or UK documents.

Cyprus tax headline: 0% on foreign dividends and interest for non-doms

The headline that draws Indian founders and investors is 0%: a Cyprus tax resident who registers as non-domiciled pays no Special Defence Contribution (SDC) on worldwide dividends and interest for up to 17 years. For someone whose wealth sits largely in dividends or interest, this is materially better than the tax payable on the same income in India, as explained under Cyprus tax residency and non-domiciled status.

Who this guide is for: HNWIs, founders, IT professionals and NRIs

This guide is written for four Indian profiles: high-net-worth individuals seeking EU residence and tax efficiency, company founders holding dividend-paying shares, IT professionals and remote workers who can structure income through a company, and existing NRIs wanting a stable EU base. Each must solve the same three problems together: the residency route, the Cyprus tax position, and how to move money out of India legally.

What are the routes for an Indian national to live in Cyprus?

Indian nationals reach Cyprus residence through four main routes: Permanent Residency by Investment (the EUR 300,000 property route), employment with a work permit or EU Blue Card, company relocation with staff transfer, and the older Category F self-sufficiency permit. As third-country nationals, Indians most commonly use the investment route because it is fast, permanent and does not depend on a local job offer.

Permanent Residency by Investment (the EUR 300,000 route)

Permanent Residency by Investment is the primary route for Indian investors, granting an indefinite residence permit in exchange for a qualifying EUR 300,000 (plus VAT) investment, typically in new residential property. The permit does not expire and needs no annual renewal, which makes it the cleanest option for a family wanting permanent EU status without tying it to employment. Full eligibility and conditions are covered in our guide to Cyprus Permanent Residence by Investment.

Employment and the Cyprus work/EU Blue Card path

The employment route suits Indian professionals with a Cyprus job offer, granting a temporary residence and work permit that can lead to longer-term status. The EU Blue Card is a separate track for highly qualified third-country nationals meeting a salary and qualification threshold, offering intra-EU mobility rights. Both depend on a Cyprus employer sponsoring the permit, so they work best for specialists recruited into a Cyprus company rather than passive investors.

Company relocation, digital nomad visa and Category F comparison

Company relocation lets an Indian business register a Cyprus entity and transfer key staff under Cyprus's foreign-interest company framework, common for IT and services groups. The digital nomad visa allows remote workers employed by non-Cyprus companies to reside in Cyprus while serving foreign clients. The Cyprus Category F permanent residency permit is an older, lower-cost self-sufficiency route based on secured foreign income rather than a large capital investment, but it is slower and more discretionary than the fast-track programme.

Which route third-country nationals actually qualify for

Indian nationals, as third-country nationals, qualify most readily for Permanent Residency by Investment because it needs no EU employer or EU family member. The employment and Blue Card routes require sponsorship, the digital nomad visa requires foreign employment, and Category F requires provable passive income. In practice most Indian HNWI and founder clients choose PR by Investment for its speed and permanence, then layer the tax structuring on top.

How does Cyprus Permanent Residency by Investment work?

Cyprus Permanent Residency by Investment exchanges a qualifying EUR 300,000 (plus VAT) investment and proof of EUR 50,000 secured annual income from abroad for an indefinite residence permit, decided on a fast-track basis under Regulation 6(2) of the Aliens and Immigration Regulations in roughly two months. The permit covers the investor's immediate family and, once granted, needs no renewal, though the qualifying investment must be retained.

The EUR 300,000 (plus VAT) qualifying investment options

The EUR 300,000 minimum can be met through several qualifying investments, most commonly new or off-plan residential real estate bought from a developer. The same threshold applies to commercial property, to shares in a Cyprus company with local substance, or to units in Cyprus investment funds (AIF, AIFLNP or RAIF). VAT treatment differs by asset class. New residential property carries the standard 19% VAT, but where the buyer will actually use the home as their primary and permanent residence in Cyprus, the reduced 5% rate applies to the first 130 square metres and the first EUR 350,000 of value, with 19% charged on any excess, provided the total buildable area does not exceed 190 square metres and the total value does not exceed EUR 475,000. This reduced rate is fully compatible with a EUR 300,000 fast-track purchase: an investor buying a new home to live in can combine the two, so a EUR 300,000 (plus VAT) apartment used as the family's primary residence attracts only 5% on the first EUR 350,000. A property bought purely as an investment or for rental, and not occupied as the applicant's main residence, is taxed at 19% on the whole price.

The qualifying investment options at a glance:

• New or off-plan residential property purchased from a developer (most common)
• Commercial real estate (offices, shops, hotels), with different VAT rules
• Shares in a Cyprus company carrying on genuine local activity
• Units in a Cyprus AIF, AIFLNP or RAIF fund

Secured annual income: EUR 50,000 main applicant plus family add-ons

The applicant must show secured annual income of at least EUR 50,000 for the main applicant, rising by EUR 15,000 for a spouse and EUR 10,000 for each dependent child. Where the application is based on residential property, this income must originate from abroad, for example dividends, salary, rents or pensions earned outside Cyprus. A couple with two children must therefore evidence roughly EUR 85,000 of secured foreign income.

Fast-track decision under Regulation 6(2): about two months

Under the fast-track procedure in Regulation 6(2), the Civil Registry and Migration Department (CRMD) can issue a decision in approximately two months from a complete filing. The resulting permit is indefinite and requires no periodic renewal, unlike temporary permits. This speed and permanence are the main reasons Indian families favour the investment route over slower discretionary permits.

Who is covered: spouse, children to 18 and students to 25 (parents excluded)

The permit covers the main applicant, the spouse, dependent children up to 18, and unmarried financially dependent children up to 25 in full-time study. Parents and parents-in-law are excluded, having been removed from the fast-track programme on 2 May 2023. Families intending to bring elder parents must plan a separate residence route for them.

Ongoing obligations: holding the investment and health insurance

The main ongoing obligations are retaining the qualifying investment, maintaining valid health insurance, and keeping a clean criminal record. The permit can be reviewed if the investment is sold without replacement or if the family fails to visit Cyprus at least once every two years. On the government side, the fast-track application under Regulation 6(2) carries a fee of EUR 500, plus EUR 70 per person for the biometric registration of each family member, with each adult applying in their own right paying the EUR 500 fee again. Valid health insurance and a clean criminal record are evidenced at the point of filing rather than on a fixed annual cycle. The precise per-person charges for a given family are best totalled at filing, since they depend on the number of dependants included.

How do you fund the move from India under RBI rules?

You fund the move under the Reserve Bank of India Liberalised Remittance Scheme (LRS), which lets each resident individual remit up to USD 250,000 per financial year for permissible capital-account transactions, including overseas property. Because the Cyprus threshold is EUR 300,000, most families pool the LRS quotas of several members and must factor in Tax Collected at Source (TCS) plus Foreign Exchange Management Act (FEMA) reporting.

The Liberalised Remittance Scheme USD 250,000 per-person annual cap

The LRS cap is USD 250,000 per resident individual per Indian financial year (1 April to 31 March) for permissible current and capital-account transactions, including overseas immovable property. The limit is linked to the individual's PAN and aggregates across all banks, so it cannot be multiplied by using several accounts. An Indian resident individual may lawfully use the LRS to buy Cyprus residential property while still an Indian tax resident: under Section 6(4) of FEMA and the Foreign Exchange Management (Overseas Investment) Rules 2022, acquiring residential or commercial immovable property abroad is a permitted capital-account transaction, remitted through an authorised dealer bank under purpose code S0005 (agricultural land, farmhouses and plantation property are excluded, and overseas mortgages to fund the purchase are not permitted). Once the person emigrates and becomes a non-resident, the property may continue to be held and any sale proceeds repatriated in line with FEMA, so coordinating the timing and reporting with an Indian chartered accountant or FEMA counsel keeps both the outward remittance and the later repatriation clean.

Pooling family LRS quotas to reach EUR 300,000

Because one person's USD 250,000 falls short of EUR 300,000, families commonly combine the LRS quotas of two or more adult members to fund the qualifying investment. A husband and wife each remitting close to their limit can jointly cover a EUR 300,000 purchase within one financial year. Each remitter must independently satisfy LRS and FEMA conditions, and title should reflect who actually contributed funds.

TCS on remittances: the ₹10 lakh threshold and 20% rate

Tax Collected at Source applies once a person's aggregate LRS remittances exceed ₹10 lakh in a financial year, at 20% for capital-account purposes such as overseas investment or property (lower rates apply to education and medical). TCS is not an extra tax but a prepayment, creditable against Indian income-tax liability or refundable. Indian movers should still budget for its cash-flow impact at the point of remittance.

FEMA compliance and reporting when buying property abroad

Buying property abroad triggers FEMA compliance, including remitting only through authorised dealer banks, filing the LRS declaration, and observing reporting obligations on overseas assets. The Foreign Exchange Management Act governs how Indian residents may hold and repatriate foreign property, and errors can create penalties independent of any tax question. This is where coordination between your Cyprus lawyer and your Indian chartered accountant matters most.

When do you become a Cyprus tax resident?

You become a Cyprus tax resident either by spending more than 183 days in Cyprus in a calendar year, or by meeting the 60-day rule if you have sufficient ties to Cyprus. Tax residency unlocks non-dom status, so timing the move to establish Cyprus residency in the right year is central to the whole plan.

The 183-day rule

The 183-day rule makes you a Cyprus tax resident for a calendar year if you are physically present in Cyprus for more than 183 days in that year. It is the simplest test: no business, home or other-country condition applies once the day count is met. For an Indian family relocating fully to Cyprus, it is usually satisfied automatically in the first full year.

The 60-day rule and its 2026 flexibility for third-country nationals

The 60-day rule lets you become Cyprus tax resident with only 60 days in Cyprus, provided you are not present more than 183 days in any single other country, carry on business or employment in Cyprus, and maintain a permanent home there. Under the 2026 reform, the 60-day rule can apply even if you remain tax resident elsewhere, which helps during a transition year. This is explained in depth in our guide to the 60-day tax residency rule.

Getting a Cyprus Tax Identification Code and residency certificate

To formalise residency you register with the Cyprus Tax Department for a Tax Identification Code (TIC) and, once qualifying, obtain a tax residency certificate. The certificate is what you present to foreign authorities, including India, to claim treaty benefits and demonstrate where you are taxed. Registering early and keeping day-count evidence (flights, tenancy, utility bills) supports the residency claim if queried.

What is Cyprus non-dom status and what does it save an Indian mover?

Cyprus non-dom status is a tax classification that exempts a Cyprus tax resident from Special Defence Contribution on worldwide dividends and interest for up to 17 years, provided the person is not domiciled in Cyprus. For an Indian mover whose income is largely dividends and interest, non-dom status is the single largest saving in the whole structure, taking the Cyprus tax on that income to zero.

The 17-year exemption from Special Defence Contribution

The core benefit is a 17-year exemption from SDC on dividends and interest, the Cyprus tax that would otherwise apply to passive investment income of domiciled residents. For a Cyprus tax resident who is domiciled, SDC on interest income is charged at 17%, having been reduced from the previous 30% rate with effect from 1 January 2024 (a lower 3% rate applies to interest from Cyprus government savings certificates and development bonds, and from approved provident funds). A non-dom pays none of this. The 2026 reform focused on cutting SDC on dividends from 17% to 5% for domiciled residents and abolishing the deemed dividend distribution, so the 17% rate on interest for domiciled residents remains the current position.

0% on worldwide dividends and interest

For a non-dom, the effective SDC rate on worldwide dividends and interest is 0%, whether that income arises in India, Cyprus or a third country. This is what makes Cyprus attractive to founders receiving company dividends and to investors living off portfolio income. Foreign withholding tax may still be deducted at source, for example Indian withholding on Indian dividends, which is then addressed through the treaty rather than the non-dom rule.

What non-dom does NOT cover: income tax and GESY at 2.65%

Non-dom status does not exempt you from Cyprus personal income tax on employment, self-employment, pension or rental income, nor from the General Healthcare System (GESY) contribution. GESY applies at 2.65% on income to both standard and non-dom residents. In practice a non-dom founder who draws dividends but no salary achieves a very low overall Cyprus tax cost, but only dividend and interest income is fully sheltered.

The 17-of-20-years domicile test

The domicile test defines who counts as non-domiciled: an individual qualifies if not Cyprus tax resident for more than 17 of the last 20 years, and becomes deemed domiciled once resident for 17 of the preceding 20 tax years. A newly arrived Indian resident therefore starts the 17-year non-dom clock on arrival. The 2026 tax reform, published in the Government Gazette on 31 December 2025 and clarified by the Cyprus Tax Department in Circular 2/2026, added an option to extend non-dom status beyond the initial 17 years: an individual whose domicile of origin is outside Cyprus may elect to extend the SDC exemption for up to two further five-year periods, paying an upfront lump sum of EUR 250,000 for each period. The election is irrevocable and the lump sum non-refundable, but it can take a non-dom to a maximum of 27 years of zero SDC on dividends and interest.

How are you taxed in Cyprus once resident? (2026 rates)

Once Cyprus tax resident you are taxed on worldwide income under progressive personal income tax bands starting at 0% up to EUR 22,000 and rising to 35% above EUR 72,000, with companies taxed at 15% from 2026. Non-dom status removes SDC on dividends and interest, but income tax, corporate tax and GESY still apply according to the 2026 rates below.

Personal income tax bands: 0% up to EUR 22,000, up to 35%

Cyprus personal income tax for 2026 is progressive, with the tax-free threshold raised from EUR 19,500 to EUR 22,000. The bands below apply to taxable income such as salary and pensions, not to a non-dom's exempt dividends and interest.

Corporate tax at 15% and the holding-company participation exemption

From 1 January 2026 the Cyprus corporate income tax rate rose from 12.5% to 15%, aligning Cyprus with the OECD Pillar Two global minimum tax. Even at 15%, Cyprus remains competitive, and its participation exemption can exempt qualifying dividends and gains received by a holding company. Indian founders frequently place their interests under a Cyprus holding company to use this exemption and the treaty network, a structure that pairs naturally with opening a company in Cyprus.

Capital gains, crypto and the abolition of deemed dividend distribution

Cyprus levies capital gains tax only on gains from Cyprus-situated immovable property, so gains on foreign shares and most securities fall outside the Cyprus net. The 2026 reform abolished the deemed dividend distribution (DDD) mechanism for post-2026 profits and reduced SDC on actual dividends from post-2026 profits from 17% to 5% for domiciled residents (non-doms remain at 0%), with transitional rules for 2024 and 2025. Digital assets are covered in our guide to cryptocurrency taxation in Cyprus, and the wider changes in the Cyprus Tax Reform 2026.

The 50% first-employment exemption for high earners

Cyprus offers a 50% income tax exemption on remuneration from first employment in Cyprus for high earners who meet a qualifying salary threshold and were not previously Cyprus tax resident. This halves the taxable portion of qualifying employment income for a number of years, valuable for an Indian executive or founder taking a Cyprus salary. The exemption applies where annual remuneration from the first Cyprus employment exceeds EUR 55,000 (a threshold in place since the 2022 amending law, which lowered it from EUR 100,000) and the individual was not Cyprus tax resident in the years immediately before taking up the employment. The 50% relief runs for up to 17 years and can be reclaimed in any later year in which the salary again exceeds EUR 55,000.

How does the India-Cyprus tax treaty affect you?

The India-Cyprus Double Taxation Avoidance Agreement allocates taxing rights between the two countries and provides relief so the same income is not fully taxed twice. The revised treaty, effective from 1 April 2017, moved to source-based taxation of capital gains on shares and is central to structuring an Indian founder's exit and ongoing income flows.

Source-based capital gains on shares and the pre-2017 grandfathering

Under the revised India-Cyprus DTAA effective 1 April 2017, capital gains on the alienation of shares are taxed on a source basis, so India can tax gains on shares of Indian companies. Investments made before 1 April 2017 are grandfathered and retain the previous, more favourable treatment. This distinction matters for a founder holding shares acquired at different times and should be mapped before any disposal.

Relief from double taxation on dividends, interest and royalties

The treaty relieves double taxation on dividends, interest and royalties, typically by allowing a credit in one country for tax paid in the other and capping source-country withholding rates. For an Indian mover receiving Indian-source dividends or interest, this prevents the income being taxed in full in both countries. Because Cyprus non-doms pay 0% SDC on that income, the practical residue is only the treaty-limited Indian withholding, if any.

Tie-breaker rules if you are dual-resident in the transition year

If you are tax resident in both India and Cyprus in the transition year, the treaty's tie-breaker rules assign a single residence based on permanent home, centre of vital interests, habitual abode and nationality, in that order. A Cyprus tax residency certificate and evidence that your centre of vital interests is in Cyprus support a Cyprus outcome. Careful planning of the move date reduces the risk of a messy dual-resident year.

How do you exit Indian tax residency cleanly?

You exit Indian tax residency cleanly by spending fewer than 182 days in India in the financial year and avoiding the deemed-resident and RNOR traps that apply to Indians with large Indian-source income. Because the Indian financial year runs 1 April to 31 March, timing your departure around that calendar determines when you stop being an Indian tax resident.

The 182-day and 120-day resident tests

An individual present in India for 182 days or more in a financial year is a resident for that year. A reduced 120-day test applies to NRIs whose Indian-source income exceeds ₹15 lakh: such a person present for 120 days or more can be treated as Resident but Not Ordinarily Resident (RNOR). To exit cleanly, an Indian mover generally needs to keep Indian presence below these thresholds.

The deemed-resident and RNOR traps for ₹15 lakh+ Indian income

Two traps catch Indians with significant income. First, an Indian citizen with Indian-source income above ₹15 lakh who is not liable to tax in any other country can be deemed resident in India regardless of days. Second, RNOR status applies where Indian-source income exceeds ₹15 lakh and presence is 120 days or more. Becoming genuinely liable to Cyprus tax, evidenced by a residency certificate, defuses the deemed-resident trap.

Timing the move around the Indian financial year (April to March)

Because Indian residency is assessed per financial year (1 April to 31 March), the date you leave India determines the first year you can claim non-resident status. Departing early in a financial year, keeping Indian presence under the relevant threshold, is cleaner than leaving late. Coordinating the Indian departure with the start of Cyprus tax residency avoids gaps where you are resident nowhere or resident in both.

How Indian families structure the move: worked example

Indian families typically structure the move by combining a Cyprus holding company, Cyprus non-dom residency and Permanent Residency by Investment, so dividends flow tax-efficiently while the family gains permanent EU status. The worked example below shows how a Bengaluru founder aligns the Indian exit, the LRS funding and the Cyprus tax position in one plan.

A Bengaluru IT founder relocating with dividends offshore

Consider a Bengaluru IT founder, married with two children, whose income is mostly dividends from an offshore group holding. The founder relocates to Cyprus, establishes tax residency under the 60-day or 183-day rule, and registers as non-dom, so those dividends attract 0% Cyprus SDC. The family funds a EUR 300,000 new-build apartment in Limassol by pooling the founder's and spouse's LRS quotas, and obtains PR by Investment for the whole family in about two months.

Combining a Cyprus holding company, non-dom and PR

Layering the three elements produces the efficiency: a Cyprus holding company receives and on-pays dividends under the participation exemption, non-dom status removes SDC on the founder's dividend income, and PR by Investment secures the family's indefinite right to live in Cyprus. Each element is separately valid, but the value comes from sequencing them correctly around the Indian exit year.

Using a Cyprus International Trust for asset protection

For asset protection and succession planning, many Indian families add a Cyprus International Trust for asset protection over part of their wealth. A Cyprus International Trust can hold shares and investments outside the founder's personal estate, offering confidentiality and protection while remaining compatible with the non-dom position. The trust is a planning overlay, designed alongside, not instead of, the PR and tax structure.

What does moving to Cyprus from India cost and how long does it take?

Moving to Cyprus from India costs at least the EUR 300,000 qualifying investment plus VAT, government and legal fees, due diligence, health insurance and Indian-side TCS, and typically takes a few months from first remittance to PR card. The exact figure depends on family size, the chosen investment and the VAT position, but the investment itself is the dominant cost.

Investment, government fees, legal and due-diligence costs

Beyond the EUR 300,000 investment (plus VAT where applicable on new residential property), budget for government application fees, legal and conveyancing fees, due diligence, and health insurance for each family member. On the Indian side, add TCS at 20% on remittances above ₹10 lakh, which is creditable but affects cash flow. The precise government charges should be confirmed at filing, as flagged in the ongoing-obligations section above.

Realistic timeline from LRS remittance to PR card

A realistic timeline runs from arranging LRS remittances and completing the property purchase, to filing a complete PR application, to the fast-track decision in about two months. Allowing for property selection, conveyancing and document collection, most families should plan for roughly three to six months end to end.

Path to long-term settlement and citizenship considerations

Permanent Residency by Investment gives indefinite residence but does not by itself grant Cyprus or EU citizenship. Naturalisation is a separate, longer process based on lawful residence, physical presence over several years, and language and knowledge requirements. Families wanting an eventual citizenship option should plan that path separately from the PR-by-investment route from the outset.

How Philippou Law helps Indian clients relocate to Cyprus

Philippou Law Firm (Polycarpos Philippou & Associates LLC) helps Indian clients relocate to Cyprus end to end, from the PR-by-investment application to the tax and corporate structuring that follows. Our team manages the property conveyancing, the CRMD filing under Regulation 6(2), and the registration for tax residency and non-dom status, so the family gets one coordinated plan.

End-to-end PR, tax and corporate structuring

We handle the full stack: the Permanent Residency by Investment application, the Cyprus tax residency and non-dom registration, and the corporate layer including holding companies and, where appropriate, a Cyprus International Trust. This keeps the residency, tax and asset-protection elements aligned around your specific family and income profile.

Coordinating with your Indian CA on LRS and FEMA

Because the funding must be lawful on the Indian side, we coordinate with your Indian chartered accountant or FEMA counsel on the LRS remittance, TCS and reporting, so the Cyprus purchase and the Indian exchange-control position line up. This cross-border coordination is where most self-managed moves go wrong.

Booking a consultation

To start, book a consultation with our relocation and tax team. We map your route, model the tax outcome, and set out the funding and timeline for your family before any commitment.

How Philippou Law Firm can help

Philippou Law Firm advises Indian nationals, NRIs, founders and HNWIs on every stage of moving to Cyprus, from choosing the right residence route to securing non-dom tax status and building the corporate and trust structures that protect your wealth. We coordinate the Cyprus PR-by-investment application, the tax residency registration and the India-side LRS and FEMA position with your chartered accountant, so the plan holds together across both jurisdictions. This article is general information, not legal or tax advice. To discuss your relocation, contact our team to arrange a consultation tailored to your family and income profile.