The Challenge
Following his third successful exit, an Israeli serial founder had accumulated substantial dividend income from his Cyprus-based holding structure. Under Cyprus tax rules, Cyprus-domiciled individuals pay 17% Special Defence Contribution on dividend income. However, as a non-domicile of Cyprus, he could obtain a complete exemption from SDC. The challenge was ensuring his residency arrangements were correctly documented and his domicile status was properly established in advance of a large dividend distribution.
The Solution
Nexora advised on the steps required to establish and document Non-Dom status in Cyprus, coordinating with local tax advisers to confirm the correct approach under the Cyprus Income Tax Law and the relevant SDC provisions. The founder established a qualifying residence in Cyprus under the Non-Dom rules and maintained the required 60-day presence for tax residency purposes. The structure was reviewed to confirm the dividend source qualified for the SDC exemption.
The Outcome
The founder received a €1.1M dividend distribution entirely free of Special Defence Contribution, saving approximately €55,000 compared with a domiciled Cyprus resident receiving the same amount. He continues to receive annual dividend distributions from his portfolio companies with zero SDC liability. The Non-Dom status is expected to remain in place for the 17-year statutory period under Cyprus tax law.
“I had advisers in three countries. Nexora was the only one who gave me a clear, structured answer about the Non-Dom rules rather than vague assurances. I rely on that kind of precision.”
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