Create a company in Cyprus — or move your company from Canada

Canada is one of the countries that makes you pay to leave. There is no wealth tax and no estate tax, but the day you cease to be a resident, the Income Tax Act treats you as having sold everything you own and taxes the gain. Understanding that single charge — and the five things it does not touch — decides whether a move to Cyprus makes money or costs it.

Updated for 2026 Cyprus tax law and regulations.

One partner for the Cyprus half of a Canadian move, from incorporation to your first return

Sumly is the fully digitalized, one-stop way for a Canadian founder to start a company in Cyprus and run it from the day the certificate is issued. We register the company, open your books the day you order, prepare every Cyprus return box by box, and handle the tax residency and non-dom application as one fixed-price service. One dashboard, one provider, one set of prices told upfront — rather than a lawyer for the incorporation, a bookkeeper for the ledgers, and nobody for everything in between.

This is Sumly — and what we actually do for you

Sumly is the fully digital provider for founders moving a company to Cyprus. You do not need to learn Cypriot company law, find a local auditor, or work out which form goes where. You get in touch, and we do the rest.

And we stay with you on both sides of the move. The Cyprus side we own outright. For the side you are leaving, we put you straight in front of an adviser or lawyer from our network who works on exactly your problem — company law, exit taxation, inheritance, employment — and we hold the thread between them and us. One point of contact for the whole move, however many specialisms your case turns out to touch. If your case is simple, we do all of it for a fixed price.

Part 1: What leaving actually costs you

Your home country does not let go the moment the plane does. What still runs after you have left, and in which order it has to be handled.

Does Canada charge an exit tax when you leave for Cyprus?

Yes, and it is the single most important number in the whole decision. There is no way to write around it, and any page that tells a Canadian that leaving is free has either not read the statute or is not planning to.

Paragraph 128.1(4)(b) of the Income Tax Act provides that a taxpayer who ceases to be resident in Canada is deemed to have disposed of each property owned, immediately before ceasing residence, for proceeds equal to its fair market value at the time of disposition, and to have reacquired it immediately afterwards at that same amount. Nothing is sold. No money moves. The gain is taxed anyway, on your return for the year you leave.

That is why the arithmetic runs the way it does. Take a founder whose Canadian corporation shares have an adjusted cost base near zero and a fair market value of two million dollars. The deemed disposition produces a two-million-dollar capital gain, half of which is a taxable capital gain, taxed at the founder's marginal rate for the year of departure. The Cyprus savings that follow are real and they compound — but they start from behind, and how far behind depends entirely on what the shares are worth on the day the residence ends.

The honest sequencing message follows from that, and it is the thing this page most wants a Canadian reader to take away. The Cyprus benefit is prospective; the Canadian cost is immediate. For a founder whose company is young and whose share value is still small, leaving now is cheap and the case is strong. For a founder sitting on a large accrued gain, the exit charge can swallow several years of Cyprus savings before the plan is even in profit. Which of those two people you are is worth working out before anything else.

What does the Canadian departure tax not touch?

More than most people expect, and the exclusions are where the planning actually lives. Subparagraphs 128.1(4)(b)(i) to (v) carve five categories out of the deemed disposition, and each one behaves differently.

The fourth row deserves a paragraph of its own, because a whole class of founders reads it and finds the answer is not what they feared. Where an individual was resident in Canada for not more than 60 months in the preceding 120 months, property they already owned on arrival — or inherited since — is outside the charge. Someone who moved to Toronto or Vancouver four years ago for a job, built nothing new, and is now moving on, faces a materially smaller exit than a lifelong resident with the same balance sheet.

The third row is the broadest. The "excluded right or interest" definition in subsection 128.1(10) covers RRSPs, RRIFs, RESPs, RDSPs, TFSAs, FHSAs and deferred profit sharing plans; employee benefit plans, pension and superannuation funds, retirement compensation arrangements and foreign retirement arrangements; retiring allowances; annuity contracts; interests in life insurance policies in Canada; and, for founders specifically, rights under an agreement referred to in subsection 7(1) — employee stock options. CPP and Old Age Security benefits are on the list too.

Put the exclusions together and the shape becomes clear. Leaving Canada does not detonate your registered plans and it does not accelerate your options. What it bites is private company shares, non-registered investment portfolios and foreign real estate. For most founders reading this page, that means it bites the one asset the whole plan is about.

Can you defer the Canadian departure tax until you actually sell?

Yes, by election, and the mechanics are worth knowing precisely because they are frequently described loosely.

Subsection 220(4.5) lets an emigrant elect to defer payment of the tax attributable to the deemed disposition until the property is genuinely disposed of, and requires the Minister to accept adequate security for the deferred amount, computed by a formula that isolates the tax the deemed disposition itself caused.

Then comes the provision people misread. Subsection 220(4.51) deems the Minister to have accepted security equal to the lesser of that amount and the taxes that would be payable for the year by a Canadian-resident trust the taxable income of which for the year is $50,000. Read it carefully: it is not a fifty-thousand-dollar exemption from departure tax. It is a measure of how much security is deemed to have been furnished already. Below that measure, you post nothing. Above it, real security — a letter of credit, pledged assets — has to be arranged. Subsection 220(4.52) then caps the security at the excess of the emigration-year tax over what would have been payable had the deemed disposition never happened.

Two things the election does not do. It does not reduce the tax: the liability is fixed at departure-day market value, so a company that halves in value afterwards leaves you owing tax on a gain that no longer exists. And it does not stop the clock on the other filings below. Whether interest runs on the deferred amount is an administrative question we are not going to answer with a number on this page, because the source that answers it is a Canada Revenue Agency page we could not open while writing — ask your Canadian adviser rather than trusting a blog.

Is the capital gains inclusion rate one half or two thirds in 2026?

One half. This matters more than it sounds, because the departure tax is a capital gains charge, so an error here overstates a founder's exit bill by a third.

A proposal to raise the inclusion rate from one half to two thirds was announced, covered exhaustively, and priced into an enormous quantity of published advice. It did not survive. Paragraph 38(a), in the consolidated text current to 21 June 2026, provides that a taxpayer's taxable capital gain is ½ of the taxpayer's capital gain. There is no two-thirds rate anywhere in the current section 38; the only departures from one half are the nil rates in paragraphs 38(a.1) to (a.3) for certain charitable donations.

So: the rate changed, and then it changed back, and a great deal of content ranking today never noticed. If you are reading a competing page that quotes two thirds, you now know how carefully it was maintained.

How does a Canadian actually stop being tax resident?

Not by counting days, which is the first thing to unlearn. Canadian residence for individuals is a common-law, facts-and-circumstances question about residential ties, and no provision of the Act sets a day threshold that makes you non-resident.

What the Act does contain is a one-way trap. Under paragraph 250(1)(a) a person is deemed resident throughout the year if they sojourned in Canada in the year for a period of, or periods the total of which is, 183 days or more. That rule pulls you in; it never lets you out. Spending 100 days in Canada proves nothing on its own.

The Canada Revenue Agency sets out the factors it weighs in an income tax folio on determining residence status. That folio sits on a domain we could not reach while researching this guide, so we are not going to paraphrase its list as though we had. What is safe, uncontroversial and worth saying anyway: residence is judged on the whole picture, no single connection is decisive, and the two facts that most often defeat a claimed departure are a home kept available in Canada and a spouse who has not moved. If your plan depends on a fine judgement about ties, that is a conversation with a Canadian adviser, not a checklist from a website.

There is also a form on which an individual can set out their facts and ask the Agency for an opinion on their residency status. Filing it is optional, and it produces an opinion rather than a binding determination or an appeal right. Some advisers file it for comfort; others decline because it invites scrutiny of a fact pattern that a departure return would otherwise report simply. We describe both positions and recommend neither.

One provision closes the loop, and it catches people who think they have found a shortcut. Subsection 250(5) deems a person not to be resident in Canada where they would otherwise be resident but are, under a tax treaty with another country, resident in the other country and not resident in Canada. Becoming a treaty resident of Cyprus therefore does not sidestep the departure tax. It causes it. Section 250(5) makes you non-resident for all purposes of the Act, and ceasing to be resident is exactly what triggers section 128.1(4).

Do Canadian FAPI rules catch your Cyprus company?

While you still live in Canada, yes — and this is the section most competing pages skip entirely, which is unfortunate, because it is the reason half of the plans people arrive with do not work.

Section 91(1) requires a taxpayer to include in income, in respect of each share of a controlled foreign affiliate, that share's participating percentage of the affiliate's foreign accrual property income. No dividend is required. The income is taxed in Canada as it is earned inside the foreign company, which removes the deferral that offshore structures are usually sold on.

The control test in subsection 95(1) is wider than founders assume. A foreign affiliate is a controlled foreign affiliate if it is controlled by the taxpayer, or would be if the taxpayer also held the shares owned by non-arm's-length persons and by up to four other Canadian-resident shareholders. Four Canadians with 25% each own a controlled foreign affiliate between them, and none of them controls anything.

Then the pressure point. FAPI captures income from property and from businesses other than active businesses, and the dividing line runs through the definition of investment business in subsection 95(1). A business whose principal purpose is deriving investment returns is an investment business unless, throughout the year, the operator employs more than five employees full time in the active conduct of the business, or receives equivalent services from a related entity for adequate consideration.

Look at how Cyprus companies are usually set up — a director, a corporate services provider, a registered office, no payroll — and the conclusion is immediate. Such a company fails the more-than-five test, its returns are investment business income, that income is FAPI, and a Canadian-resident shareholder pays Canadian tax on it currently.

The publishable conclusion is therefore narrow and it is not the one the relocation industry likes. A Cyprus company owned by someone who stays Canadian-resident delivers very little. The Cyprus dividend position and the IP Box are real, and they are real only for a shareholder who genuinely ceases Canadian residence — which is precisely the event that triggers the departure tax. That trade-off is the whole guide, and pretending it does not exist is how founders end up with a structure and a bill.

What does Canada tax when you take money out of a Canadian corporation?

Less than the headline suggests, and the reason is integration — the feature Canadians most often forget to include when they compare themselves to a low-tax jurisdiction.

The corporate rate is assembled rather than stated. Section 123(1) sets a basic rate of 38%; section 124(1) abates 10% of taxable income earned in a province; section 123.4 deducts a general rate reduction of 13%. Net federal general rate: 15%. A Canadian-controlled private corporation instead claims the small business deduction of 19% on active business income up to a business limit of $500,000, which takes the federal rate to 9%.

Nine per cent federally on the first half-million of active business income is better than Cyprus. Say that out loud, because it is true, and because a page that hides it is not worth reading. What erodes it is the two grinds in subsection 125(5.1): the business limit falls away as taxable capital employed in Canada rises through a band that begins at ten million dollars, and it also falls as adjusted aggregate investment income rises above fifty thousand. A founder wealthy enough to be reading about Cyprus is often already losing the small business deduction.

Provincial corporate tax is added on top of all of this and varies by province. We do not publish a combined figure on this page. The rate tables that would let us verify one sit on a domain we could not open, and a made-up combined number is exactly what a Canadian reader will check first. Note that Quebec and Alberta administer their own corporate tax rather than through the federal collection agreements, which is a structural difference worth knowing if you operate in either.

On the personal side, dividends are grossed up and credited. Section 82(1)(b) grosses eligible dividends up by 38% and other-than-eligible dividends by 15%. Section 121 then gives a dividend tax credit of 6/11 of the gross-up on eligible dividends and 9/13 of the gross-up on other-than-eligible dividends. That pairing is reported backwards constantly — the heavier gross-up and the 6/11 credit both belong to the eligible stream, which comes out of income taxed at the general rate. Federal personal rates run from 14% to a top federal bracket of 33%, with the thresholds indexed annually, so we quote the rates and not the 2026 bracket boundaries.

The point of all that machinery is that Canadian corporate tax is largely a prepayment of the shareholder's own tax. A Canadian who compares 15% in Cyprus against 38% in Canada is comparing the wrong pair of numbers. The comparison that is fair is what a Cyprus non-dom keeps after distribution against what a Canadian resident keeps after gross-up and credit — and that comparison only becomes available once residence has actually moved.

Does the Canada–Cyprus tax treaty protect a departing founder?

Partly, and its age is the story. The Convention between Canada and the Republic of Cyprus was signed at Nicosia on 2 May 1984 and has never been renegotiated since. It predates every modern treaty feature a Canadian might expect: there is no reduced direct-dividend rate for substantial corporate holdings and no limitation-on-benefits article of the current type.

We do not quote the treaty's withholding percentages on this page. The rule we apply to every figure here is that we publish rates we have read on an official text, and the Department of Finance's copy of this Convention is where it should be read. What we can source is the domestic rate the treaty operates against: section 212(2) charges a non-resident an income tax of 25% on every amount that a corporation resident in Canada pays or credits as a taxable dividend. The Convention reduces that, which is the practical reason a Cyprus-resident shareholder of a Canadian corporation is better off under it than outside it.

Two structural features matter more than the percentages anyway.

The individual tie-breaker is a full cascade. Where both states claim you, residence is resolved by permanent home, then centre of vital interests, then habitual abode, then nationality, then agreement between the two authorities. That ladder is what makes the Cyprus 60-day rule workable for a founder with residual Canadian connections — and it is also what can hand Cyprus the win, with the section 250(5) consequence described above.

The corporate tie-breaker goes to nationality first. Most modern treaties break corporate dual residence by place of effective management, or refer it to the competent authorities. This one asks first whether the company is a national of one of the states — in practice, where it was incorporated — and only reaches effective management if it is a national of neither. For a Canadian-incorporated company whose management has moved to Limassol, this treaty points back at Canada. If your plan is to keep the Canadian corporation and simply run it from Cyprus, that is the sentence that breaks it.

On gains, the Convention leaves gains from the alienation of most property taxable only in the state of the alienator's residence, with the familiar exception for shares deriving their value principally from immovable property. That is genuinely useful after a clean departure, and it is no help at all against the section 128.1(4) charge, which lands the instant before you become a Cyprus resident.

What should you do with the Canadian corporation itself?

Three routes, and it is a decision rather than a default.

Keep it and run it from Cyprus. The option that looks cheapest and behaves worst, for the treaty reason above. Sensible only where there is continuing Canadian trade that needs a Canadian counterparty, and even then it is a structure to be advised on, not assumed.

Wind it down. For most founders this is the honest answer: settle the corporate tax position, clear the accounts, distribute the reserves on a Canadian adviser's timetable, and incorporate fresh in Cyprus. It is cleaner than it sounds and it avoids arguing with two tax authorities about which one owns the company.

Continue the corporation out of Canada. Redomiciliation providers present this as an administrative act. It is not: moving a corporation out of Canada has its own Canadian consequences, and for a company whose value sits in software or goodwill, those consequences arrive at exactly the moment the intellectual property is being valued. Get Canadian advice specific to the corporation before filing anything, and treat any provider who quotes the move without mentioning the tax as a provider selling paperwork.

Does Canada tax your estate — and does Cyprus?

Canada has no estate tax and no inheritance tax, and no annual net wealth tax either. That is true, it is what the relocation industry quotes, and on its own it is misleading.

What Canada taxes is the gain. Subsection 70(5) deems a taxpayer to have disposed of each capital property immediately before the taxpayer's death at fair market value, so accrued gains are realised and taxed on the terminal return. Subsection 70(6) provides a rollover where property passes to a spouse or a qualifying spouse trust, in which case the deemed proceeds are the adjusted cost base immediately before death and the gain waits for the survivor.

For a founder holding a large accrued gain on private company shares, that terminal charge can be economically comparable to an estate tax in a country that has one. Cyprus, for its part, levies no inheritance tax and no annual wealth tax at all — an absence, not a rate, and one worth weighing next to the departure charge rather than instead of it.

What happens to Old Age Security and CPP when you go?

Old Age Security is residence-conditioned, and this is a checkable fact that Cyprus-side content essentially never mentions. Section 9 of the Old Age Security Act provides that where a pensioner has remained outside Canada after becoming a pensioner for six consecutive months, payment of the pension is suspended. The exception is long residence: payment may continue without suspension where the pensioner establishes that on leaving Canada they had resided in Canada for at least twenty years after attaining the age of eighteen years.

Twenty years after eighteen is the line. Cross it and OAS follows you to Limassol indefinitely; fall short and it stops half a year after you land.

The Canada Pension Plan works on a different principle — it is contributory and earnings-related, built on contributions already made rather than on where you live afterwards. We are not going to state its position abroad as a certainty here, because the Service Canada pages that confirm it were not reachable while this guide was written and a negative proposition deserves a source. Check your own record before you leave; it is the kind of task that is easy in February and infuriating in November.

Both benefits are, at least, on the excluded-rights list in subsection 128.1(10), so neither is caught by the departure tax.

Part 2: What Cyprus gives you

This is the straightforward half, and the half we build end to end. What you actually get on the other side.

What does the Cyprus side actually look like for a Canadian founder?

Flat, and short enough to describe in a paragraph, which is itself part of the appeal after the machinery above.

A Cyprus limited company pays 15% from tax year 2026 on taxable profit. One rate, no bands, no abatement, no grind, no province. Income from qualifying intellectual property can fall to an effective 3% from tax year 2026 under the IP Box.

Then the shareholder takes the money out, and the gap opens. A Cyprus tax resident who is not Cyprus-domiciled — the non-dom position nearly every relocating founder qualifies for — pays no Special Defence Contribution on dividends for 17 years, and dividends are outside Cyprus personal income tax entirely. What remains is GeSY at 2.65% on income up to €180,000 a year, a maximum of €4,770 no matter how large the distribution. Where a founder is Cyprus-domiciled instead, the SDC on dividends is 5% on dividends from 2026 profits. Salary, if you take one, meets bands running from 0% to €22,000 rising to 35% above €72,000.

VAT registration starts at €15,600 of taxable turnover, with a standard rate of 19%. The detail lives in Cyprus non-dom status and what changed in the 2026 reform, and the arithmetic against your own numbers is in the calculator at the top of this page.

How does a Canadian founder become Cyprus tax resident?

Through the 60-day rule, usually, and it became easier in 2026. The straightforward route is spending more than 183 days a year in Cyprus. The other route wants far fewer days in the country and rather more commitment on the ground.

From tax year 2026 the rule has four conditions, the old fifth having been removed from the 60-day rule: at least 60 days in Cyprus; no more than 183 days in any single other state; a business, employment or office in a Cyprus tax-resident person held throughout the year; and a permanent home in Cyprus, owned or rented. The condition that disappeared — not being tax resident anywhere else — was the awkward one for anyone unwinding a Canadian position slowly, because another country's claim no longer disqualifies you by itself. Competing claims resolve under the treaty tie-breaker instead.

For a Canadian, the directorship of your own Cyprus company is normally the office the third condition wants, so forming the company and establishing residency are one project rather than two. Canada is not an EU member state, so the Yellow Slip route — which exists under EU free movement law — is not available to a Canadian passport holder, and we promise nothing about it. What applies instead are the residence routes for third-country nationals, and we handle that paperwork and bring in immigration specialists where a file needs one.

Why do people choose Cyprus over other tax havens?

Because it is somewhere people want to live, which most of the low-tax alternatives are not. Tax is what makes a founder open the tab; it is rarely what keeps them here five years later.

Cyprus works in English — business, banking, professional services and the courts all run in it — which for a Canadian removes the friction of moving somewhere the paperwork happens in a language you do not read. The violent crime rate sits among the lowest of any European Union member state. There are people from everywhere here already, so nobody is the only foreigner in the room. Business and real estate are booming, and the state is genuinely open to people doing business without wrapping every step in regulation. Groceries — meat, fruit, vegetables — cost noticeably less than in a Canadian city. And the beaches: in a Cyprus winter you can still swim, and the summers are the ones people fly across the world for.

The Canadian push list is different from the European ones, and it is a shorter, more honest list. It is not a story about rates: on the first half-million of active business income, a Canadian-controlled private corporation pays a federal rate below the Cyprus corporate rate, and the integration system means a resident shareholder is not double taxed. What actually pushes founders is the shape of the exposure. The departure charge grows with the value of what you build, so the cost of leaving rises every year you wait. The small business deduction grinds away as investment income and taxable capital rise, so the best feature of the Canadian system is the one you lose as you succeed. FAPI removes the deferral from any foreign structure while you stay. And the terminal-return deemed disposition means "no estate tax" is a slogan rather than a plan. None of that is a grievance. It is a set of curves, and they all bend the same way.

Can a Canadian e-commerce brand run through Cyprus?

Yes, and for a store selling into Europe the market question is usually bigger than the tax one. A Canadian company sells into the EU as a third country: customs formalities, import VAT, and separate registrations to distance-sell to consumers or supply digital goods. A Cyprus company sits inside the EU VAT system with a VAT number buyers can verify in VIES, zero-rates intra-EU business sales and uses the one-stop shop for consumer sales across the bloc.

The bookkeeping is where this normally comes apart, because a store produces thousands of small transactions in several currencies with a VAT treatment that changes by customer type and country. The Shopify and WooCommerce plugins carry orders, refunds, fees and payouts into the ledger already coded for Cyprus VAT, so each return is assembled out of the sales themselves instead of rebuilt from an export at quarter end.

Two worked examples

A consulting corporation distributing $250,000 a year. In Canada the company pays corporate tax — 9% federally on active business income within the business limit, plus provincial tax — and the founder pays personal tax on the grossed-up dividend, less the credit. Through Cyprus the company pays 15% and a non-dom founder meets only GeSY, capped at €4,770 however much is distributed. The annual gap is meaningful but not enormous at this profit level; what makes or breaks the plan is the departure charge on the shares, which is a one-off computed on the value of the company on the day residence ends. Move while the corporation is worth little and the plan is cheap. Move after a good year and it is not.

A software company at $600,000 of profit with qualifying intellectual property. Here the shape changes. Income that qualifies under the Cyprus IP Box is taxed at an effective 3%, and the distribution still meets only GeSY. Against that, the small business deduction has long since been ground down by taxable capital or investment income, and FAPI means none of this is available while the founder remains resident in Canada. This is the profile where the difference is structural rather than incremental — and also the profile where the departure tax is largest, because the intellectual property is what the shares are worth. Incorporate fresh, get Canadian advice on the valuation and the timing, and do the two things in the right order.

Both examples assume full distribution and headline rates. Your own province, your adjusted cost base, the small business deduction grinds and the departure date change the answer, which is what a meeting is for.

Part 3: How the move runs

From the decision to the first invoice out of the Cyprus company: the order, the mistakes people make before you, and two calculations worked through in full.

What does the move look like, month by month?

Timelines depend on your own circumstances, so read this as shape rather than schedule.

• Before you go — and this is where we start. We put you in front of a Canadian adviser who takes a valuation view on your corporation's shares — it is the input the whole exit turns on. They decide with you whether to elect deferral, check whether you are inside the sixty-months-in-one-hundred-and-twenty exclusion, and check your OAS residence record.
• Month 1. We order the Cyprus company and the books open the same day the order is placed. We start the residence paperwork and begin assembling the property list the $25,000 rule will need.
• Months 1–3. We register for VAT and, where relevant, social insurance, employees and UBO, and get banking and EU payments moving. You take up the directorship that anchors the 60-day rule.
• Months 3–6. You rent or buy the permanent home the 60-day rule requires, and we tell you what qualifies. You move real decision-making to Cyprus and we minute it there. Your Canadian adviser winds the Canadian corporation down, or restructures it, on their own timetable, and we keep the two in step.
• Month 12 onward. Your Canadian adviser files the departure return with the deemed disposition and the property list. We apply for the Cyprus tax residency certificate and register you as non-dom, and we keep the T1134 clock in the calendar — 10 months, not 15.

What mistakes do Canadian founders actually make?

The expensive ones are rarely exotic.

Assuming there is no exit tax because there is no estate tax. Reading a page that still quotes a two-thirds inclusion rate and budgeting a third too much — or reading one that quotes one half and assuming the whole charge is fictional. Electing to defer without security arrangements in place and discovering the tranche in subsection 220(4.51) is a measure, not an allowance. Setting the Cyprus company up a year before leaving and collecting FAPI for that year. Owning 25% alongside three other Canadians and believing that puts everyone outside the controlled foreign affiliate definition. Missing the T1134 by a few months and finding the penalties are per affiliate. Keeping the Canadian corporation and running it from Limassol, against a treaty that breaks corporate ties by nationality first. Leaving a spouse and a house in Canada and calling it a departure. And filing the departure return without the property list, because the list is not a tax and therefore did not feel like a deadline.

Nearly every one of them starts with treating the move as a single event instead of a handover between two tax systems.

Part 4: Who does the work

You can do all of this yourself. Below is what that costs in time and in money, against what it costs to let us do it.

Do it yourself — or have Sumly do it

Both routes genuinely work, and plenty of founders pick each one. Doing it yourself means the Registrar's forms and fees, a registered office you arrange, VAT and VIES registration, provisional tax twice a year, annual statements and books that will stand up to an auditor — on top of an emigration you are already managing across two hemispheres of paperwork. Sumly's route prices the same work three ways and publishes all three: formation from €950 one-time, the bookkeeping software from €39 a month, and a Sumly certified bookkeeper of your own at €390 a month — books open from day zero, every return prepared box by box.

The software on its own runs and operates the company, from Cyprus or from Canada: invoicing, AI double-entry bookkeeping that books your documents itself, live open-banking feeds, every VAT, VIES, provisional and corporate return prepared box by box, live reports, a document inbox with its own email address, mobile receipt capture that books itself, multi-currency invoicing, team roles and the AI assistant — plus payroll at €15 per employee per month, IP Box tracking at €50 a month, Projects at €10 a month, and the e-commerce plugins.

And Sumly offers all of it to everyone: a virtual address with PO box, mail scanned digitally and delivered to your dashboard wherever you are; nominee director and secretary where a structure calls for them; tax residency and non-dom at €750 per person; and every registration handled — VAT, social insurance, employees and UBO — filed right the first time. The Yellow Slip is on that list too, but it is an EU-citizens-only route under EU law, so it is not the Canadian one.

Each of those is an extra, scoped to your case. Tell us what you need in the meeting and you get one clear package-deal offer covering all of it — the IP Box application included where it fits, since it is complex expert work and exactly the thing that should be looked at with you before anyone quotes it. No hourly billing, no surprises.

Sumly, a law firm, and a traditional bookkeeping firm

Law firm vs Sumly — and what happens when it gets complicated

Sumly is cheaper and faster, and we work WITH lawyers, not against them. When a case gets too complicated for what Sumly handles directly, we simply connect you with the right expert in exactly the legal field you need help in, and everything gets done according to best practice, always. Either way, it starts the same place: contact us.

For a Canadian founder that division is exactly right. The departure side belongs to a Canadian adviser, and we will say so every time — the deemed disposition, the deferral election and the valuation are their work, not ours. Everything on the Cyprus side runs through one provider, one dashboard and four prices published in advance. That is what makes Sumly the best choice for Canadian founders creating a company and relocating to Cyprus.

Why is Sumly the best bookkeeping system for a Cyprus company?

Sumly is the best accounting software for a Cyprus limited company — because it is built for exactly one thing, Cyprus tax law: all 16 Cyprus VAT codes mapped to the official VAT return boxes, VIES and provisional tax native, not a localization. We are happy to be held to that claim, so the evidence for it follows.

Cybooks and Balabook are the two Cyprus-built alternatives a founder gets pointed at. We meet their former customers every week, and what they tell us, again and again: workflows that made simple bookkeeping overly complicated, rough edges and glitches, support that left them waiting — a messy experience they were relieved to leave behind.

On every one of these checkable dimensions, Sumly leads. That is a factual comparison — not a matter of taste.

Plainly said: the best support, the best bookkeeping software, the best AI for bookkeeping, the best bookkeeper, and the best prices — with everything done easily. We publish the detail: Sumly vs Cybooks, Sumly vs Balabook, and for the international tools a Canadian founder already uses, Xero, QuickBooks and Sage.

One line about the IP Box is worth repeating: the IP Box is the largest single line in a Cyprus product company's tax position — and the easiest one to forfeit through bookkeeping that was never set up for it. An IP Box application begins as a conversation, which is one more reason the meeting comes before anything else.

What happens when you get in touch

You do not need to have decided anything before you speak to us, and you do not need your paperwork in order.

1. The meeting. Fifteen minutes. You tell us what you own and when you want to move. We tell you which rules at home catch you, and what the Cyprus side costs.
2. We tell you what kind of case you have. If it is simple, we do all of it — company, books, residency, non-dom — at a fixed price. If it is not, we say so immediately and bring in the specialist it needs.
3. We start. The company is registered, your books open the same day, and you have one point of contact for the whole thing.

Questions Canadian founders actually ask

Frequently asked

Does Canada charge an exit tax when I move to Cyprus?

Yes. Section 128.1(4)(b) of the Income Tax Act deems you to have disposed of each property you own, immediately before you cease to be resident, at fair market value — and to have reacquired it at the same figure. No sale, no cash, tax anyway. Five categories are excluded, including Canadian real property, permanent-establishment business assets and the long list of excluded rights and interests in subsection 128.1(10). Private company shares and unregistered portfolios are squarely inside the charge.

Is the capital gains inclusion rate one half or two thirds in 2026?

One half. Paragraph 38(a) of the Income Tax Act, in the consolidated text current to 21 June 2026, says a taxable capital gain is one half of the capital gain. There is no two-thirds inclusion rate anywhere in the current section 38. The two-thirds figure was announced, written about everywhere, and is still repeated on pages that were never updated. Since departure tax is a capital gains charge, getting this wrong overstates the exit bill by a third.

Can I defer paying the Canadian departure tax?

You can elect to defer payment under subsection 220(4.5) until the property is actually sold, and the Minister must accept adequate security for the deferred amount. Subsection 220(4.51) deems security to have been accepted up to a measured tranche, so a smaller liability needs no security posted at all. Subsection 220(4.52) caps the security at the extra tax the deemed disposition caused. The election defers the payment; it does not reduce the tax, which is fixed at departure-day values.

Do Canadian FAPI rules catch a Cyprus company?

They catch it while you are still a Canadian resident, which is the whole point. Section 91(1) includes a controlled foreign affiliate's foreign accrual property income in a Canadian taxpayer's income as it is earned, with no dividend needed. The pressure point is the investment business definition in subsection 95(1), which requires more than five full-time employees in the active conduct of the business. A typical Cyprus holding company with a director and a service provider fails that test comfortably.

How many days can I spend in Canada after moving to Cyprus?

There is no safe day count, which surprises people. Canadian residence for individuals is a facts-and-circumstances question about residential ties, not an arithmetic test. What section 250(1)(a) adds is a one-way trap: sojourning in Canada for 183 days or more in a year deems you resident for the whole year. Staying under 183 days does not make you non-resident. A home kept available and a spouse who has not moved are what usually defeat a claimed departure.

How late can a T1134 be before it gets expensive?

Not very. Subsection 233.4(4) requires the return within 10 months after the end of the year — shortened from fifteen months, which is why a lot of published guidance is wrong. Section 162(7) charges the greater of $100 and $25 a day to a maximum of $2,500. Section 162(10) reaches up to $12,000 for a foreign-based information failure, doubling after a demand to file, and section 162(10.1) adds a further percentage of your cost in the affiliate beyond 24 months.

Should I keep my Canadian corporation and run it from Cyprus?

It is the option that looks cheapest and behaves worst. The Canada–Cyprus Convention breaks corporate dual residence by nationality first — place of incorporation — before it ever reaches place of effective management. So a Canadian-incorporated company managed from Limassol is pointed straight back at Canada by the treaty itself. Most founders are better off winding the Canadian corporation down on their own adviser's timetable and incorporating fresh in Cyprus.

Will I keep Old Age Security after moving to Cyprus?

Only if you had a long Canadian record. Section 9 of the Old Age Security Act suspends payment once a pensioner has been outside Canada for six consecutive months, and continues it without suspension only where the pensioner had resided in Canada for at least twenty years after turning eighteen. CPP is built on contributions already made rather than on continued residence, but the Service Canada pages that confirm the position were not reachable while this guide was written, so check yours before you assume.

Does Sumly advise on Canadian tax?

No. Sumly builds and runs the Cyprus side: the company, the books from day zero, Cyprus VAT, VIES and corporate returns, and the tax residency and non-dom application. This guide states Canada's own legislation so you can see the shape of the decision, but how section 128.1 applies to your shares on your departure date is a question for a Canadian adviser. Where a case needs one, we connect you with expert lawyers from our network, and the first step either way is a meeting.

Keep reading

• Every country's route to Cyprus — the departure guide for wherever you are now
• Cyprus non-dom status — how the 17-year exemption works in practice
• The Cyprus 60-day rule — day counting and the residency certificate
• What changed in the 2026 Cyprus tax reform
• How to register a company in Cyprus and what it costs
• Cyprus tax benefits for foreigners — the whole picture in one place

The calculator on this page uses headline rates, an assumed 10% annual return and full distribution of profit, so it shows the shape of the difference rather than your own result; it does not model the departure charge, which is specific to your shares and your departure date. Canadian figures are stated from the Income Tax Act consolidation current to 21 June 2026, and are federal only. Cyprus figures apply from tax year 2026. All Sumly prices exclude VAT, and government expenses on a formation are invoiced separately once your application is approved.