Relocation from Israel to Cyprus: Key Considerations for Foreigners

Relocation from Israel to Cyprus is becoming increasingly popular among foreign nationals who have already obtained or plan to obtain Israeli citizenship, permanent residency, or repatriation status. The reasons vary — from the desire to reduce tax burdens and simplify asset structures to the pursuit of a calmer and more affordable lifestyle. For repatriates and holders of teysha (Bnei/Bnot Torah) status, transitioning from one legal system to another requires a particularly careful approach.

This article explores the key issues such clients face and offers practical recommendations based on legal practice.

Legal Aspects of Immigration from Israel to Cyprus

Cyprus remains one of the most accessible jurisdictions for relocation from Israel. Entry is permitted with a biometric passport for up to 90 days; however, long-term residence or business activity requires additional legal grounds — such as company registration, real estate purchase, proof of financial independence, or marriage to a Cypriot citizen.

It is important to note that Cyprus, while a member of the EU, is not part of the Schengen Area. Therefore, you should determine in advance the intended form of relocation — temporary stay or permanent residence — as this will affect both your legal status and tax residency requirements.

Leaving Israel does not automatically terminate your tax residency. To avoid legal risks and double taxation, the relocation process must be properly formalized and documented in both countries — in Israel and in Cyprus.

Taxes and Change of Residency When Moving to Cyprus

Changing your tax status is one of the key steps in immigration to Cyprus. Under Israeli law, tax residency is determined by the “center of vital interests” concept — meaning that even if you live abroad, you may still have tax obligations in Israel if you maintain housing, family, or business ties there.

To avoid double taxation, it is crucial to correctly terminate your Israeli tax residency. This usually involves submitting Form 1348, along with documents proving that your center of interests has shifted to Cyprus.

Cypriot tax residency can be obtained under the 183-day rule or the 60-day rule, provided you have real estate, a business, or an employment contract with a Cypriot company. The new tax residency status offers several benefits, including exemption from taxes on dividends and interest income for up to 17 years.

Key Steps for Changing Tax Residency:

• Prepare and submit a notification of loss of Israeli tax residency.
• Collect evidence confirming that your center of interests is now in Cyprus.
• Submit documents to the tax authorities in both countries.
• Obtain Cypriot residency and a Tax Identification Code (TIC).
• Maintain proper financial reporting in accordance with local regulations.

All these steps should be documented and synchronized with your Israeli tax filings to ensure compliance and avoid future disputes.

Relocation from a Legal Perspective: How to Avoid Mistakes

Relocating without considering the legal nuances can lead to conflicts with tax authorities and other serious consequences. To avoid mistakes when moving from Israel to Cyprus, it’s essential to plan ahead and comply with the legal requirements of both countries.

If you intend to shift your center of business and personal activity, a tourist visa alone is not sufficient. Opening a bank account in Cyprus, registering a company, or purchasing real estate — all these steps require legal support and proper documentation.

A lawyer can help you:

• Properly obtain a residence permit (PR);
• Conduct due diligence on real estate before purchase;
• Assess risks related to maintaining Israeli tax residency;
• Structure assets in compliance with Cypriot and international law.

Legal assistance is especially important when relocating IT businesses, establishing family offices, or transitioning to an international tax framework.
Given Cyprus’s growing reputation as a secure and business-friendly jurisdiction, professional legal support ensures a smooth, compliant relocation without unnecessary risks or delays.