Residency Explained: A Complete Guide for Entrepreneurs and Expats
Introduction
Residency has become a key topic for entrepreneurs, investors and digital nomads who want more freedom and lower taxes. In simple terms residency determines where you are legally considered to live and pay taxes. Choosing the right country of residency can make a huge difference in both lifestyle and finances.
In this article we explain what residency means, the main types of residency available, and how entrepreneurs use it for tax planning and relocation. We also look at two popular residency destinations: Cyprus in the European Union and Dubai in the United Arab Emirates.
What Does Residency Mean?
Residency is your legal right to live in a country. It also determines where you pay personal income tax. While citizenship gives you a passport, residency gives you the right to stay, work and often access local benefits.
Residency rules vary between countries but in most cases you are considered a tax resident if you:
Spend more than 183 days per year in the country
Have your main home there
Or have your economic interests (like a business) based there
Types of Residency
Residency comes in several forms depending on your purpose and goals.
Temporary Residency
Granted for a limited time, usually one to five years
Often renewable if you continue to meet requirements
Common for digital nomads, entrepreneurs or retirees
Permanent Residency
Long-term right to live in the country
Usually granted after holding temporary residency for several years
Often includes many of the rights citizens enjoy, except for voting
Tax Residency
Not always the same as legal residency
Focused on where you are liable to pay taxes
Some people can be legal residents in one country but tax residents in another, depending on treaties and personal situation
Why Residency Matters for Entrepreneurs
For entrepreneurs and investors residency is more than just a legal formality. It can:
Lower your personal income tax
Give you access to better banking and business opportunities
Protect your assets through clear legal frameworks
Improve lifestyle with better climate, infrastructure and cost of living
Choosing the right residency can save you tens of thousands of euros each year while also giving you access to a higher quality of life.
Popular Residency Programs Worldwide
Many countries now compete to attract entrepreneurs and wealthy individuals by offering residency programs. Common options include:
Residency by investment: Granting residency if you invest in real estate, government bonds or local business.
Residency through company formation: Starting or relocating a business in the country gives you the right to live there.
Digital nomad visas: Residency permits designed for remote workers.
Retirement residency: For those with stable pensions or income who want to retire abroad.
Cyprus Residency
Cyprus is one of the most popular residency destinations in the European Union.
How to Obtain Residency in Cyprus
Residency by property investment: Buying property worth at least €300,000 can qualify you for permanent residency.
Residency through company formation: Setting up a Cyprus company and being employed by it can give you residency rights.
Standard residency permits: Available for those who spend more than 183 days in Cyprus and register as residents. You can even get residency by just spending 60 days in cyprus if yyou plan on opening a business there.
Tax Benefits in Cyprus
Non-domicile residents pay 0% tax on dividends and interest income for 17 years.
Income up to €19,500 is tax-free.
Attractive lifestyle, English widely spoken, and full EU membership.
For entrepreneurs Cyprus combines EU credibility with one of the most favorable tax regimes in Europe.
Dubai Residency
Dubai and the wider UAE have become a global hub for expats.
How to Obtain Residency in Dubai
Residency through free zone company formation: Starting a company in a Dubai free zone grants you and your family residency visas.
Residency by employment: Employers sponsor foreign workers and provide residency permits.
Golden Visa program: Long-term residency for investors, entrepreneurs and high-skilled professionals.
Tax Benefits in Dubai
0% personal income tax on all earnings, dividends and capital gains.
0–9% corporate tax depending on structure, with many free zone companies still paying 0%.
Modern infrastructure, global connectivity and a high standard of living.
Dubai is the number one choice for entrepreneurs who want zero personal tax and a global lifestyle hub.
Residency vs Citizenship
It is important to understand the difference:
Residency gives you the right to live in a country but not a passport.
Citizenship gives you a passport, voting rights and the ability to live there permanently.
Many entrepreneurs only need residency because it provides the tax and lifestyle benefits without the complexity of dual citizenship.
Frequently Asked Questions (FAQ)
What is the difference between legal and tax residency?
Legal residency is your permission to live in a country. Tax residency determines where you pay income tax. They are often the same but not always.
How many days must I spend in a country to become a resident?
In most countries the threshold is 183 days per year, but some programs grant residency even if you spend less time physically present.
Can I have residency in more than one country?
Yes. It is possible to hold multiple residencies, but you can usually only be a tax resident in one country at a time based on double tax treaties.
Is residency in Cyprus or Dubai better?
It depends on your goals. Cyprus is ideal if you want EU membership, dividend tax exemptions and access to Europe. Dubai is best if you want 0% personal income tax and a global lifestyle hub.
Conclusion
Residency is one of the most powerful tools entrepreneurs and investors can use to optimize both taxes and lifestyle. By choosing the right residency you can lower your tax burden, expand internationally and enjoy a higher quality of life.
Cyprus offers EU membership and strong tax benefits for non-domicile residents, while Dubai provides unmatched personal tax advantages and a thriving business environment. Whether your goal is to reduce taxes, expand your company or simply enjoy a better lifestyle, planning your residency is a smart first step.
Thinking about relocating to Cyprus or Dubai? Offshore Pathway specializes in helping entrepreneurs obtain residency, set up companies and benefit from international tax advantages. Contact us today to start your journey.