The Non-Habitual Residence (NHR) Programme
The Portuguese NHR program was recently (2020) updated in an effort to starch foreigners to Portugal.
Successful applicants of NHR can be enjoy decreased income tax on particular foreign income for 10 years.
Eligibility for the NHR requires that applicants:
* Are existing taxpayers but have not been tax residents in Portugal in the past 5 years,
* Must stay in Portugal for 183 days to gain tax resident status in Portugal,
* Must purchase or rent property in Portugal as a means of permanent residence, and
* Maintain Portuguese tax residency for 10 years.
How can a Cypriot Company add benefits to your NHR status.
A foreigner who is a resident of Portugal and holds the Non-Habitual Residence Status in Portugal can have his business in Cyprus or under a Cypriot company which will offer him/her a tax friendly environment with multiple benefits such benefit can be the dividend income driving from the company which will be taxed from Cyprus at zero percent. This can be done through a holding company in Cyprus. On a further note, a trading Cypriot company enjoys the benefit of being taxed at a rate of 12.5% as corporate tax on profits and receive his/her dividends at zero percent tax.
Cyprus as a member of the European Union and the European monetary union is committed to quality and efficiency. Also offers and attractive and transparent tax regime, fully compliant with EU directives, OECD requirements and International laws and regulations. Its main features are:
- Corporate income tax 12.5%
- Dividend participation exemption
- Exemption on disposal of “Securities” (e.g. Shares, bonds, debentures)
- No succession taxes
- No withholding taxes
- Attractive Intellectual property (IP) tax regime
- Tonnage tax for shipping companies
- Notional interest deduction
- Personal tax exemptions for new residents and non-domiciles
Further to the above, Cyprus offers a robust legal regulatory framework which is on English common law principles.
Human talent probably constitutes Cyprus’ most compelling advantage, complemented by a broad range of high quality professional services. As dynamic business centre, Cyprus offers abundance of highly educated and skilled individuals, multilingual their majority, ready to serve the needs of any business.