Cyprus and its prices. Its overpriced real estate, enormous electricity and water costs, and ever-increasing food costs -
Is emigration to Cyprus really worth it anymore?
Cyprus had been severely damaged, or rather damaged itself, investors and citizens, after the financial crisis in 2013. A plan was needed to make the country, which is quite unknown to many foreigners, more attractive again. How was the turnaround achieved? In most European countries, tax levies were rising steadily, especially for entrepreneurs. It was therefore obvious that particularly favorable taxation for foreigners would bring more of them back into the country and thus more money into the coffers. And thus the tax haven Cyprus was born.
After the "Cyprus Papers", which allowed particularly rich foreigners from Russia and China to obtain a European passport in exchange for a real estate investment, were exposed by the media, a new plan was needed: enormously low taxes for entrepreneurs from other European countries, tax-free salaries and no taxes on dividends. After a few years, entrepreneurs came in droves. Especially from Germany.
And yes, the tax advantages in Cyprus really do exist. And they are worthwhile. That's why we too emigrated to Cyprus. But due to the in the last two years enormously risen rent prices and living costs on Cyprus also no longer for every entrepreneur. First of all, if your income tax rate is 20 to 25%, based on sales and profits, then Cyprus is not for you - because in addition to the tax savings, the rent prices, electricity prices, water costs and product prices in the supermarket in Cyprus will get to you, and already the tax advantages are used up again.
Why is that? Inflation and the increase in global costs due to the war in Ukraine has hit Cyprus hard. But also everyone in Cyprus is currently trying to get rich off of everything. In order to relieve the citizens a little, it was decided that basic foodstuffs such as bread, milk and eggs would no longer be taxed. But what are the supermarkets in Cyprus (including Lidl) doing? They simply increase the product prices by the value of the tax, and enrich themselves from this well-intentioned action of the government.
This was just a small example. Since the Ukraine war and sanctions against Russia, Ukrainians and Russians alike have been coming to Cyprus to set up companies, benefit from Europe and low tax rates, and avoid sanctions. Mind you, Ukrainians and Russians come who can afford it. So, since the beginning of the war, the housing market in Cyprus has turned negative. In 2020, it was possible to rent houses with a garden, three rooms and a pool in a good location in Paphos for between 780 and 1,100 euros. And these were already prices designed for the target group "foreigners". If you browse the advertisements today, you will find such an offer only for 1500 to 2500 euros. And this is because well-heeled foreigners from Ukraine and Russia pay such prices, because they are often sent by their companies and money plays less of a role here.
So you should ask yourself, if you are willing to pay the triple price for houses, which are in a very simple condition anyway and without heating or insulation. By the way, the rent is increased every 12 months, and long-term renting is not an option due to the fact that properties in Cyprus are always rented for 12 months only.
Because the people who earn money on the rental market are far too greedy for that. As long as rich foreigners accept to pay three to four times the rent, nothing will change for you.
In general, since emigrating, we have always wondered why Cypriots are so accommodating and open to foreigners, and why it doesn't bother most of them that there are whole neighborhoods where hardly any Cypriots live:
Entire villages and communities are founded in Cyprus, which from the very beginning have only one thing in mind as a target group: Foreigners who bring money here. The Cypriots themselves actually live very much among themselves, which is understandable. But as long as everyone profits more than well from the foreigners, they are naturally tolerated. Far too much money is brought to Cyprus every year by tourists and entrepreneurs. If they were foreigners in need of help, things would look very different.
They all make very good money from us. Be it dentist's offices that exclusively treat foreigners, restaurants and supermarkets created only for foreigners, or the property house of a Cypriot family that smells cash in the current times, and can rent their property at a price that is three times the average salary in Cyprus. Lawyers, consultants, construction companies, specialized stores - all of them would achieve only 30% of their turnover without foreigners.
And Cyprus in general is also pulling what it can from the EU pot. 15 kilometers of freeway are financed by the EU to the tune of 86 million euros, entire, actually beautiful city cores are being core-sarned and harbors are being torn up. Without Europe, Cyprus would certainly still be conquerable via gravel roads.
I write all this here, because I want to give you as an emigrant and founder of the first German portal for emigrants on Cyprus a realistic assessment, especially because some is often frustrated on the home country, and looks around for alternatives.
(Over this frustration, and whether emigrating makes really happier, I wrote here.)
CONCLUSION: Cyprus can be a genuine alternative, if you earn enough money and you then many advantages and a completely special life section give. Just don't be blinded by all the consultants, videos and the sea view, but stay realistic and well prepared. Then you will have an unforgettable time in Cyprus.
As a foreigner, you can definitely turn the tables a bit by benefiting from the tax advantages of the country, the good weather and the lifestyle, but otherwise do not make any major investments here. In the best case even so that you spend only the minimum time in Cyprus, namely 60 days a year, preferably in the summer.
Buying a boat, solar panels on the roof, expensive cars, importing things from Germany for a lot of money, increased tourist prices at makeshift beach locations - all this you should rather avoid in Cyprus! Basically, where many locals go, you should also go. On the one hand, this strengthens your network of Cypriots, and on the other hand, it saves you from some rip-offs in Cyprus.
