Since Cyprus joined the EU, residency and work permits are no longer required of EU citizens. However, for non-EU citizens, employees of entities in Cyprus require 'Temporary Work and Residence (TRE) Permits', which are issued by the Central Bank. For this purpose, employees are categorized either as Executives or Non-Executives.

In effect, executives are defined as senior management, and only three are permitted per company unless the Central Bank can be persuaded otherwise. The minimum age for an executive is 24, and the minimum salary is €20,503 per year. In both cases, the authorities require a fair amount of documentation. Permits are normally issued for 2 years, renewable for a further three years.

Of course not everybody investing in Cypriot property is doing so with the intention of living there, and many investors will rent out homes whilst staying put in their home jurisdiction. Rentals in Cyprus will generally yield around 8% gross. After various management fees and costs have taken a bite, yields are closer to 5%.

Tax Implications

Few countries tax their citizens purely on a territorial basis (that is, only on income obtained from within the country of residence), and rental income from a property let in Cyprus will almost certainly attract income tax in your home state should you choose to remain there, not to mention capital gains tax when the property is sold on.

In Cyprus itself, income tax is levied on a progressive scale up to 30% on income above €34,172. The first €17,086 is exempt. Meanwhile, pensions are taxed at 5%.