Tax incentives for Cypriot talent repatriation

As part of the government’s “Minds in Cyprus” initiative, a new personal tax incentive has been introduced to encourage highly skilled Cypriot professionals living abroad to return and contribute to the country’s economic development.

The incentive was enacted on 6 March 2026 and it applies retroactively from 1 January 2025.

This measure complements the existing relocation incentives in Cyprus (the 20% and 50% exemptions) and aims to attract Cypriot professionals who have gained experience abroad.

Key Benefit

Eligible individuals are entitled to a 25% exemption from income tax on:

• Gross annual employment income, or
  
• Annual profits from self-employment/business activities

The exemption is capped at €25,000 per year and applies for a period of 7 years, starting from the year the individual begins employment or business activity in Cyprus.

Who Can Benefit?

The incentive is available to individuals who:

• who move back to Cyprus starting from 1st January 2025 and up to year 2030
• Become Cyprus tax residents (except in the year they start working or operating a business in Cyprus, when they may still be non-resident)
• Were not Cyprus tax residents for at least 7 consecutive years before returning
• Were Cyprus tax residents at some point before that 7-year period
• Earn at least €30,000 annual salary or business income during the first 12 months after commencing employment or business activity in Cyprus. The exemption will continue to apply for the following 6 years, provided the annual income remains above €30,000.

Employment History Requirements

Applicants must also meet specific overseas employment experience criteria before returning to Cyprus:

For university graduates (degree recognised by Cyprus Council for the Recognition of Higher Education Qualifications):

• At least 36 months of full-time employment abroad within the 84 months prior to returning to Cyprus.

For individuals without a university degree:

• At least 84 consecutive months of full-time employment abroad prior to returning.

Supporting the Return of Skilled Professionals

This new tax incentive strengthens Cyprus’ position as an attractive destination for returning professionals, supporting the country’s strategy to bring experienced Cypriot talent back home while boosting innovation and economic growth.

Businesses and professionals considering relocation to Cyprus should evaluate how this incentive may apply alongside other available tax benefits.

PGE&Co remains at your disposal for any clarifications and for further assistance that might be needed on this or on any other matter.