Cyprus for digital marketing agencies — 15% corporate, 50% off senior salaries, 0% on your dividends

Yes — Cyprus is an EU member state, so EU B2B invoicing is standard reverse-charge VAT, just like a German or French agency would issue. The bigger client-side concern is data processing under GDPR, which Cyprus solves natively as an EU-resident processor. We've onboarded clients of relocating agencies into 4–5-figure Bayer, ING and BMW accounts without procurement objections.

Either model works. The 50% expat exemption is most economic for senior salaries above €55k, so it makes sense for your leadership team. Junior staff often stay in their home country as employees of a local subsidiary or as contractors. We've structured both: full relocation (10–20 person agency moves to Limassol) and hub-and-spoke (Cyprus HQ, distributed contractors).

The exemption applies to first employment in Cyprus where (a) base salary exceeds €55,000, and (b) the individual was not Cyprus tax resident for 15 of the prior 17 years. The exemption is 50% of the qualifying salary, for 17 years from the year of first employment. It can apply alongside the €22,000 PIT nil-rate band, producing very low effective rates on senior packages.

If you want the 15% corporate rate to apply, the company needs to be Cyprus tax resident — which means real Cyprus management. Just relocating yourself personally without moving the company gives you 0% on dividends but leaves the corporate tax in Germany or France. Most agency owners do both: incorporate a Cyprus Ltd, novate clients to it, and relocate personally as non-dom.