What is Cyprus 60-Day Rule?

How it works

Cyprus introduced the 60-day rule in 2017 (Income Tax Law amendment) as a fast-track alternative to the standard 183-day residency test. The aim: attract HNW individuals, traders, and remote founders who don't want to commit to half the year in Cyprus.

To qualify under the 60-day rule, all four of these conditions must be met for the relevant tax year:

1. At least 60 days of physical presence in Cyprus during the tax year (calendar year).
2. No more than 183 days in any single other country.
3. Not a tax resident of any other country.
4. Maintain a permanent home in Cyprus (owned or rented), AND carry on business, hold employment, or serve as a director of a Cypriot tax-resident company throughout the year.

All four are cumulative. Failing any one of them defaults you back to the standard 183-day test (where 183+ days in Cyprus = Cypriot tax resident).

Why it's attractive

Cyprus combines the 60-day rule with the non-dom regime (introduced 2015). A non-Cypriot-domiciled tax resident:

• Pays no Special Defence Contribution (SDC) on dividends, interest, and rental income — these are usually the largest tax items for HNW individuals.
• Pays 0% on capital gains (with the exception of Cypriot real estate).
• Pays standard Cypriot income tax (progressive 0%–35%) on employment income and other earned income.
• Pays standard Cypriot corporation tax (12.5% — one of the lowest in the EU) on Cypriot-source business profits.

The non-dom regime is available for 17 years of Cypriot tax residence. After that, full Cypriot taxation kicks in.

Substance for the 60-day rule

The fourth condition (business / employment / directorship + permanent home) is the substance hook. In practice:

• Permanent home = a year-round lease or owned residence. Short-term rentals and Airbnb don't qualify.
• Business / employment = either operating a Cypriot company (CY tax-resident, with substance), being employed by one, or holding a directorship.
• The directorship route is the lowest-substance — but Cypriot tax authorities increasingly require real activity behind directorships (board meetings in Cyprus, decisions documented locally).

Examples

• French SaaS founder relocates to Cyprus. Spends 90 days in Cyprus, 90 days in Italy, 60 days travelling, 30 days in Paris. Files French départ fiscal, signs a Limassol apartment lease, becomes director of his new Cyprus Ltd. France: cleanly broken (well under 183 days, no foyer). Italy: under 183 days, no domicilio. Cyprus 60-day rule applies. Non-dom benefits for 17 years.
• British contractor on rotating assignments. Spends 70 days in Cyprus, 100 days in UAE, 80 days in UK. UK SRT may keep him UK-resident on ties. Fails condition 3 of Cyprus 60-day rule (UK residency not cleanly broken). Defaults to old residency.

Common mistakes

• Skipping the substance check. A "Cyprus director" with no real presence and no documented decision-making is increasingly challenged by tax authorities.
• Forgetting the 183 days elsewhere limit. Spending 200 days in another country defeats the rule, even if the other country doesn't claim you as resident.
• Keeping a French / German / Spanish home available. Permanent home in the old country can re-trigger old residency under domestic centre-of-vital-interests rules — failing condition 3.
• Relying on the Cypriot non-dom regime indefinitely. It expires after 17 years of Cypriot residency. Plan exit or alternative regime well before.