The Cypriot government is going to reduce the Non-Dom fee by 80%, a move designed to attract more foreign capital and highly skilled professionals to the island.

As Brief writes, the proposed reduction — from €250,000 to €50,000 for a five-year period — is part of a broader tax reform initiative intended to significantly enhance Cyprus’s competitiveness as a hub for foreign investment.

The measure targets foreign investors, senior executives, and international companies choosing Cyprus as their tax base, offering a financial incentive to establish residency and conduct business operations on the island.

The Non-Dom (Non-Domiciled Tax Resident) regime applies to individuals or companies that are tax residents of Cyprus but not domiciled in the country. Its key advantage lies in exemptions from taxation on dividends and interest, as well as tax relief on certain types of foreign income.

In practice, this framework attracts foreign investors and highly skilled professionals who can relocate to Cyprus without facing heavy tax burdens — effectively positioning the island as a high-value investment and business hub.

Until now, the Non-Dom fee stood at €250,000 for a five-year period, payable by companies or individuals regardless of investment size. This amount was widely viewed as excessive, particularly among the auditing community, as it was believed to limit the inflow of new capital and undermine Cyprus’s competitiveness compared to other European jurisdictions such as Malta, Luxembourg, and Ireland.

Under the new proposal, the Non-Dom fee will be cut by 80% to €50,000 for five years, making Cyprus considerably more attractive to foreign investors and international firms.

Besides boosting foreign capital inflows, the government expects the measure to stimulate job creation, support the real estate market, and promote the development of start-ups and high-tech enterprises.

The reduction primarily affects the following groups:

• Foreign investors and highly skilled professionals, who will benefit from a lower entry cost into the Non-Dom regime.

• International companies establishing a presence in Cyprus, which will gain from the tax exemptions offered under the scheme.

Through this fee reduction, the government seeks to send a signal of stability and predictability, reaffirming Cyprus as a business-friendly and tax-stable destination — even amid global economic and geopolitical uncertainty.

However, economic analysts caution that the challenge lies in proper implementation and in maintaining a balance between attracting new investment and ensuring the sustainability of public revenues.