The most tax-efficient structure for most professionals relocating to Cyprus is a Cyprus limited company (Ltd) combined with Non-Dom residency status. The company pays 15% corporate tax on profits. The Non-Dom director then withdraws the after-tax profit as dividends, paying only 2.65% GESY (capped at EUR 4,770 per year) - no income tax, no Special Defence Contribution. Compare this to self-employment, where income tax reaches 35% above EUR 72,000, plus 4.70% GESY on net profit. Setting up a Cyprus Ltd typically takes 5-10 business days and costs EUR 1,050-2,000 in one-off fees.

Why the Calculator Shows ~17% and How to Get Much Lower

The default calculator output uses conservative assumptions: salary at the midpoint of typical ranges, moderate expenses, and no special optimisation. In practice, Non-Dom directors who structure carefully can bring the effective rate on gross revenue down to around 5%.

The Three Levers That Compress the Rate

First, keep your salary at or below EUR 22,000. This is the income tax threshold - every euro of salary below this amount costs zero income tax. You still pay social insurance on the salary (~8.3% employee + ~8.8% employer for formal payroll), but many owner-directors opt for the minimum insurable salary for pension purposes only.

Second, maximise legitimate business expenses before corporate tax. Rent, equipment, software subscriptions, professional fees, travel for business, and similar costs reduce taxable profit directly. Every EUR 1,000 in deductible expenses saves EUR 150 in corporate tax.

Third, take the remaining after-tax profit as dividends under Non-Dom status. Dividends are subject only to 2.65% GESY, capped at EUR 4,770 per year regardless of how large the dividend is. There is no income tax on dividends for Non-Dom residents, and no Special Defence Contribution.

Worked Example at EUR 150,000 Revenue

EUR 40,000 in business expenses. Taxable profit: EUR 110,000. Corporate tax (15%): EUR 16,500. After-tax profit: EUR 93,500. Director salary: EUR 22,000 (0% income tax). Dividends: EUR 71,500. GESY on dividends: EUR 4,770 (capped). Total taxes: EUR 21,270. Effective rate on EUR 150,000 gross revenue: 14.2%. Add EUR 15,000 more in deductible expenses and the effective rate falls below 10%. With a high-expense business, 5% is achievable.

What Each Calculator Covers

Use the Salary Calculator to model the income tax and GESY cost of different salary levels. The Dividend Tax Calculator shows exactly what Non-Dom dividends cost at any amount. For incorporation costs, see the Company Formation Cost Calculator.

Full background on the Non-Dom regime: Non-Dom guide. For incorporation steps and timeline: Company Formation guide.