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The rise of digital nomads
The spread of the covid-19 pandemic has left people around the world with no choice but to find ways to adjust to the new normal. While two years ago the concept of being a digital nomad might sound more like a concept from a sci-fi movie to most of us, it is not implausible to say that the covid-19 has put “flesh on the bones” of this concept. But what does the term “digital nomad” mean?
Digital nomads, as the term suggests, are location independent people who use technology to do their jobs, living a nomadic lifestyle. They embrace remote working and telecommunications rather than being physically present at a company’s headquarters or office. The unprecedented technological innovation of the past decades has enabled many people to quickly adapt to the new realities introduced as the pandemic has spread and it is observed that many people have adopted this nomadic way of life. as their new standard. Many governments around the world immediately saw the increase in the number of digital nomads and have taken steps to incorporate this new reality into their legislative framework by introducing visa regimes for digital nomads.
Cyprus digital nomad visa
The Cypriot government recently announced its new strategy to attract business, which is expected to come into effect on 1/1/2022, which could not ignore digital nomads. Third country (non-EU) citizens who are self-employed, self-employed or employees working remotely for employers / clients based outside Cyprus using technological and telecommunications means would be eligible to apply for a digital nomad visa . Those granted the Digital Nomad Visa would be entitled to stay in Cyprus for one year, with the right to renew for an additional two years. They could also be accompanied by members of their family, to whom, following a relevant request made by them, a residence permit would be granted and which would expire when the Digital Nomad Visa expires. While in Cyprus, the spouse or civil partner of the person who obtains a digital nomad visa and minors in their family are not allowed to provide dependent work or exercise any form of economic activity in Cyprus.
In order to be eligible for a digital nomad visa, the interested person must meet, among others, the necessary requirements below:
- be able to prove that they have sufficient funds, in the form of fixed income, to cover their living expenses for the duration of their stay in Cyprus.
Sufficient funds have been set in the amount of 3,500 EUR (Euro, three thousand five hundred) per month and will be proved by the employment contract or other relevant evidence, if applicable, and a bank account.
This amount will be increased by 20% (twenty percent) if there is a spouse / partner and by 15% (fifteen percent) for each child;
- must have health coverage (General Health System – GHS); and
- must have a clean criminal record from the country of residence.
Besides enjoying the glistening Mediterranean horizon in front of the desk and nine months of sunshine, there are plenty of other reasons digital nomads could, undeniably, find their refuge in Cyprus. Cyprus is a member state of the European Union and one of the safest countries in the world. The quality of life and the cost of living are also important factors to consider. However, the two most important reasons for moving to Cyprus are the ease of starting a business and the taxation in Cyprus.
Cyprus has been characterized as a promising and promising new technological and innovation hub. In addition to providing a very easy and efficient way to start a business, the government encourages start-ups. The infrastructure adapts very well to the growth of businesses and the level of professionalism is high in all sectors. In addition, it is important to note that the new investment program announced by the Cypriot government also foresees a business facilitation unit which would be responsible for providing services for setting up a business by proceeding with the registration of a business. a business with the Cypriot Companies Registrar and approval of the company name, registration with the social insurance service and tax authorities, advice on licenses and permits needed to operate in Cyprus and speeding up of the issuance of any residence or work permit, if necessary.
When it comes to the tax treatment of digital nomads, the “60 day rule” could work perfectly for them. This rule allows a person who stays in Cyprus for at least 60 days during the fiscal year (the 60 days need not be consecutive), carries on a business here and maintains (by owning or renting) a permanent domicile in Cyprus, and provided that he is not physically present in another country, for one or more periods exceeding a total of 183 days in the same fiscal year and that he is not a tax resident in another country for the same year, to be considered as a Cypriot resident tax in that year. In any case, a person can become a Cypriot tax resident in accordance with a digital day test (spend 183 days in the tax year, on the island). A Cypriot tax resident is taxed on his worldwide income, while a credit is given for any foreign tax paid. Given the low tax rates applicable to individuals and companies, the many tax incentives, deductions and exemptions offered, and the vast network of double taxation treaties to which Cyprus is a party, Cyprus is rightly seen as an attractive jurisdiction to maintain. the financial burden of being independent at manageable and competitive levels.
With the above considerations in mind, while in Cyprus as a digital nomad, any businessman and / or entrepreneur can decide to drop anchor on the island and take advantage of the benefits offered to develop the sustainability and business growth.
The content of this article is intended to provide a general guide on the subject. Specialist advice should be sought regarding your particular situation.
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