Date: 9th June 2024

The Republic of Cyprus is one of the most attractive locations in the EU for US citizens to relocate to. With widespread English fluency and a large expat community, it offers a smooth transition for individuals and families looking to integrate into a European country. Other reasons are:
1. Warm and Familiar Culture: Cyprus offers a relaxed lifestyle which is familiar and refreshing. English language is widely spoken, especially in urban centres and business settings. Road signs, menus, and public services are usually in Greek and English, making daily life accessible for overseas citizens and tourists. The local residents have a strong sense of tradition rooted in family, food, and community, which is something many foreigners appreciate.
 

2. Safe and Family-Friendly: Cyprus is one of the safest countries in Europe. Violent crime, drugs and gun violence are very rare compared to the USA. In most towns and villages, families enjoy a peaceful environment where children can play outdoors safely and women can walk at night without fear. Due to demand from large multi cultural expat communities there are good international schools in all towns. 
 

3. Cost of Living and Quality of Life: Life in Cyprus is much more affordable than in most US cities. Real estate per square metre is cheaper to buy or rent and to maintain. Healthcare is very good and very reasonably priced compared to other EU countries (check out estimates for hip replacement or dental operations in Cyprus to see proof of this). Everyday living costs are lower than the USA, so your money goes further on things like dining out, childcare, and private education.   

RESIDENCY OPTIONS FOR US CITIZENS

There are four common ways that US citizens can obtain residency status to live in Cyprus:

1. Temporary Residence Permit (otherwise known as the 'Pink Slip'): This is simple and most common option for US citizens who want to live long-term in Cyprus. Under this regime, the permit holder cannot work as a salaried employee for a Cypriot employer, but he can own his own business and receive share of profits or dividends, or he can work for an employer abroad and receive his salary from overseas. This temporary residency permit is valid for 12 months and can be renewed every year.

The main requirements for this permit are: proof of income from outside Cyprus, rental agreement for minimum 12 months or contract for purchase of property, and private medical insurance. This option has the lowest entry requirements and allows the applicant's spouse and dependent children to join, making it the best way to test life in Cyprus before making a full commitment. After five years of legal residency, the holder can apply for permanent residency.

If you are interested in exploring this option, read our Guide to the Cyprus Pink Slip.
 

2. Digital Nomad Visa: The second option is the Digital Nomad Visa which allows holder to live in Cyprus for up to 12 months, with the option to renew for a maximum of two more years. Spouse and children can also join the application as dependents. The main requirements for this permit are: proof of employment or business outside Cyprus (payslip and/or bank statements showing monthly remuneration), proof of minimum monthly net income of €3500, .
copy of rental agreement for accommodation and private medical health insurance.

3. Permanent Residency by Investment: For US citizens who are prepared to make a long-term commitment, Cyprus offers an attractive 'fast track' permanent residency programme (also known as a 'Golden Visa'). By investing at least €300000 (plus VAT) in a new house or apartment from a licensed property developer, an overseas investor can obtain permanent residency status within 6 months of applying. Similar to the above temporary permit (pink slip), this permit does not grant the holder the right to work as a salaried employee in Cyprus.

Apart from purchasing the real estate, the other requirements are: annual net income must be €50000 or more (amount increases by €15000 for spouse and €10000 for each child under the age of 18), copy of police certificate showing clean criminal record, copy of marriage certificate (if applicable), copy of birth certificates (if applicable), and private medical insurance valid for 12 months with cover for Cyprus. If you are interested in exploring this option, read our Guide to the Cyprus Permanent Residency Permit.
 

4. EU Blue Card for Highly Skilled Professionals: US citizens who are not working remotely and not running their own business, can apply for the EU Blue Card. Unlike the options above, the Blue Card allows the holder and his spouse the right to work in Cyprus, provided they have a job offer from a local company working in certain pre-defined high-demand sectors. This permit is tied to a specific job and employer. This option is very suitable for professionals in technical fields like AI, forex, finance, software or fintech. 

The main advantage of this option is that it offers one of the clearest paths to long-term residency and eventually EU citizenship. Your family can join you immediately, and after 3 years, the holder can apply for permanent residency. With continued employment and proof of integration in the local community (with basic Greek language skills), citizenship is possible after four years.

The main requirements for this option are: signed job offer or employment contract for at least 6 months, university degree plus 3+ years of work experience in a high-skilled role, salary between over €30000 per year, private medical insurance with cover in Cyprus. 

BENEFITS OF THE CYPRUS NON-DOM STATUS FOR US CITIZENS

Whichever residency path is preferred, most US citizens also apply for Cyprus Non-Dom tax status after they become a Cyprus tax resident. This special tax status gives the applicant some of the best tax benefits in the world!
 

With Non-Dom status, you are exempt from paying tax on dividends and interest for 17 years, even if the income comes from abroad. Note that Cyprus has no inheritance tax, and no capital gains tax (except for gains from real-estate in Cyprus). For US citizens looking to protect and grow their wealth legally, this is a major advantage.
 

There are two routes to qualify for tax residency: 

1. 183-Day Rule: You become a tax resident if you spend at least 183 days in Cyprus during the year. These days don't need to be consecutive, but you must be physically present in the country.

2. 60-Day Rule: If you spend less time in Cyprus, you can still qualify under the 60-day rule, as long as you meet the following requirements: You are physically present in Cyprus for at least 60 days during the calendar year, and you do not reside in any other country for more than 183 days in the same year and you maintain a permanent residential address in Cyprus (either rented or owned), and you are employed, run a business, or serve as a director of a company registered in Cyprus.

To learn more about the Non Dom programme, read our Guide to the Cyprus Non-Domicile Tax Status.
 

DOUBLE TAX AGREEMENT & TAX OBLIGATIONS FOR US CITIZENS

After US citizen moves to Cyprus and becomes a Cyprus tax resident, he/she will still have  obligations with the US tax system, because the USA taxes its citizens based on citizenship and not on where they live. This means US citizens living in Cyprus must continue to file US federal tax returns every year.

The good news is that Cyprus and the US have a Double Taxation Avoidance Agreement (DTAA) which prevents double taxation on your income in following ways:

1. Foreign Tax Credit: US citizen living in Cyprus can claim a credit for taxes paid in Cyprus, which reduces taxes payable in the US. Also he/she can carry forward unused tax credits, which lowers future US taxes when income may be higher.
2. Foreign Earned Income Exclusion: US citizen living in Cyprus can exclude up to $126500 of foreign earned income from US taxes (valid in 2024), provided he/she meets the 'Physical Presence or Bona Fide Residence test'.
3. Filing Extensions: US citizens living overseas are allowed a two-month extension (until 15th June) to file US tax returns. This can be extended to 15th October by request. 

Note there are two additional reporting requirements which US citizens living overseas have to submit annually:

1. Foreign Bank Account Report (FBAR): This report must be submitted if the total value of foreign financial accounts exceeds USD10000 at any point during the year.
2. Form 8938 (Foreign Account Tax Compliance Act): This form has to be submitted if US citizen owns foreign assets above certain thresholds. 
 

CONCLUSION
Moving to Cyprus from the US can lead you and your family to a safer, affordable, and pleasant Mediterranean lifestyle. Whether relocating for work, lifestyle, or family reasons, Cyprus offers an attractive mix of tax and other benefits, but you need to consult with professional experts to get advice about the legal, tax, and financial issues. 

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HOW WE CAN HELP?
Our team of experienced associates can help you navigate the regulations to ensure your relocation is fully compliant with US and Cyprus laws. Contact us for confidential consultation.

Disclaimer: This guide is for informational purposes and does not constitute legal advice and is valid at the time of publication. Always consult professional advisors before taking any decisions concerning your financial and residential status.