A window of many opportunities can be opened for Cyprus by the UK’s abolition, from April 6, 2025, of the non-dom status, since Cyprus has for 17 years offered this status, with all the related privileges, and can continue to do so, Georgia Papa, Corporate and Commercial Law lawyer and Partner at Pyrgou Vakis LLC, has emphasised.
Speaking to InBusinessNews, Papa pointed out that, for four years the new residents of the UK (tax residence) will have some privileges, but in general the status is being abolished. She suggested that Cyprus immediately start a campaign to attract the non-doms of the United Kingdom.
The advantages of Cyprus
As Papa explained, the abolition of the non-dom status of the United Kingdom have consequences, from which Cyprus can benefit.
The first concerns trusts with non-dom status, which are not taxed at the settlor level, which is abolished with the new legislation and therefore trusts will be taxed.
In Cyprus, trusts are not taxed on capital and income, but only at the level of beneficiaries if and when they have to be taxed in the country where the beneficiary is a resident.
So, as Papa noted, at the level of the trust no taxation is imposed, nor taxes withheld when payments are made to the beneficiary.
The laws here are also based on UK law and therefore, as Papa explained, UK non-doms will have no difficulty understanding or feeling secure within Cyprus’ system.
Relocation opportunities
Also, as indicated by Papa, relocation opportunities are created. That is, if the specific non-doms own businesses in the UK or in other countries and taxation will no longer be beneficial for them – unlike before they will now be taxed – it is an opportunity for them to think about a complete transfer to Cyprus, by relocating their businesses.
It is noted that the non-doms of Cyprus are not taxed on dividends or interest, which is very beneficial for them. More generally, there are various privileges that Cyprus can take advantage of to attract non-doms.
Referring to the countries that will try to take advantage of the situation, like Cyprus, she noted that the classic jurisdictions that have been competing with Cyprus over time are Luxembourg and Malta.
The benefit to the economy
At the same time, the benefit to the real economy if Cyprus manages to attract individuals or companies will be more general, Papa explained.
As businesses grow in Cyprus and people come to work here, as long as investments are made in the end everyone benefits from this circular system, she said. Papa further noted that people coming to work spend, the clientele of lawyers and accountants increases and real estate benefits, since professionals will also look for places to stay.
Begin campaigning immediately
At the same time, Papa mentioned that a campaign on the issue should be carried out and expressed the opinion that this should be done now.
Already, as she noted, in the UK lawyers have begun to give advice to their clients on how they should respond the changes.
“Maybe we were late to start the campaign. The changes are coming in April and therefore a lot of preparation has to be done, especially if we are talking about relocation,” she added.
It is a long process and we have to move as soon as possible, she concluded.
The IMH conference in collaboration with Invest Cyprus in London
It is noted that IMH in collaboration with Invest Cyprus is organizing on December 4 in London the conference “Non Doms: The Cyprus Private Client Offering Gathering 2024” with the main subject “Cyprus: A destination of choice for High Net Worth Individuals (HNWIs), their families, companies and employees”.
The purpose of the conference is to highlight Cyprus, as one of the few places in the world and especially in the EU, that offers a full range of quality services to meet the needs of private customers, the wide range of advantages, both financial and non-financial, which is available to affluent and wealthy individuals, their families, businesses and employees.
In particular, the conference “Non Doms: The Cyprus Private Client Offering Gathering 2024” aims to present all the benefits and advantages of Cyprus for private clients, from taxation and wealth preservation, living and working in Cyprus, until the establishment of a business presence on the island.
Read more and find out about the conference HERE
(Source: InBusinessNews)
