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

Leaving Luxembourg for Cyprus is not blocked by an exit tax on you personally — Luxembourg does not have one. The cost sits somewhere less obvious: a company that stays half-migrated, a dormant holding that keeps paying net wealth tax, and a residence test written in German that reaches backwards rather than forwards.

Updated for 2026 Cyprus tax law and regulations.

One partner for the whole move from Luxembourg to Cyprus

Sumly is the one-stop, fully digitalized way to create a company in Cyprus and relocate a Luxembourg business to it — and then to operate that company from the day it exists. We register it, open the books on day zero, prepare every Cyprus return box by box, and deliver the Yellow Slip, the tax residency registration and the non-dom application as fixed-price services. One provider, one dashboard, four published prices. Not a notary for the incorporation, a fiduciaire for the accounts, and nobody at all for the year 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 Luxembourg charge an exit tax when a founder moves to Cyprus?

Not on your shares. Luxembourg has no deemed-disposal charge on a privately held participation when a resident individual emigrates. Art. 100 LIR taxes an aliénation à titre onéreux — a disposal for consideration — and packing up your life is not one. This is the opposite of what most content on the subject says, and the reason is worth spelling out.

The provision usually cited for a Luxembourg individual exit tax is art. 102(8) LIR, described as a sursis d'imposition for substantial holdings. That description was never right. Before its repeal, art. 102(8) was rollover relief for reinvested real-estate gains, and it has now been deleted outright: the coordinated income tax law in force at 1 January 2026 carries the words "Supprimé par l'article 18 de la loi du 22 mai 2024" where the paragraph used to be. If a page still tells you to apply for a deferral under art. 102(8), it has not been read against the statute since 2023.

Two real exposures replace the imaginary one. The first is art. 38(1)(c) LIR, which treats the transfer abroad of business assets as a disposal for consideration where the taxpayer moves son domicile fiscal ou son séjour habituel — so an individual entrepreneur carrying a Luxembourg business does face an asset-level charge, though a private shareholding does not. The second is the trailing rule, which has its own section below.

What is the art. 156 n° 8 b) trailing rule, and does the treaty switch it off?

This is Luxembourg's real hold on a departing shareholder, and it is a look-back rather than a charge on leaving. Art. 156, n° 8, lettre b) LIR keeps a former resident within the Luxembourg charge on gains from participations in companies having their statutory seat or central administration in Luxembourg, where the seller was a resident taxpayer for more than fifteen years and became non-resident less than five years before the gain. Both limbs must be satisfied together.

A participation importante for this purpose is a holding where you, together with your spouse or partner and minor children, held directly or indirectly more than 10% of the capital at any point in the five years before the disposal. Participations in corporate-form investment vehicles, SICARs and SPFs are excluded by lettre c).

Read practically: a founder who has lived in Luxembourg for two decades, moves to Cyprus and sells the Luxembourg company eighteen months later is still inside the domestic charge. Treaty art. 13(5) allocates those gains to the residence state, which for a genuine Cyprus resident should displace the domestic rule. That is the orthodox reading and it is also the point on which the tax administration is most likely to push back, so it belongs in front of a Luxembourg adviser before a share purchase agreement is signed — not after.

When does a Luxembourg company itself face an exit charge?

When it goes properly. Art. 172(1) LIR provides that where a resident collective body transfers son siège statutaire et son administration centrale abroad and ceases to be a resident taxpayer, the liquidation rules of art. 169 apply, and the whole balance sheet is brought in at its valeur estimée de réalisation. The company is taxed as if it had been wound up: every latent gain in one year, goodwill and intangibles included.

Art. 172(2) keeps book values for anything that stays attached to a Luxembourg permanent establishment, which is the standard way of softening the charge where part of the business genuinely remains. Art. 38(1)(c) LIR bites in parallel at asset level and reaches the same fair-value result for individual assets that leave, with a narrow carve-out for securities-financing and collateral transfers returning within twelve months.

For most Luxembourg founders the honest arithmetic is that the exit charge is small, because the latent gain in a young operating SARL is small. It becomes large where a holding has appreciated participations on its balance sheet, and that is precisely the case where the art. 166 participation exemption may already do the work — which is one more reason not to reason about this in the abstract.

Where is the five-year deferral actually written, and what breaks it?

Not where almost everyone says. The ATAD instalment regime is in § 127, alinéa 2 of the Abgabenordnung, replaced wholesale by art. 5 of the law of 21 December 2018 transposing Directive (EU) 2016/1164. It lets a taxpayer whose liability arises under arts. 38 and 172 LIR ask for a linear spread of the exit tax over a maximum of five years, without late interest, on condition that the destination is an EU Member State or a qualifying EEA state. Cyprus is an EU Member State, so the instalment is available on a Luxembourg-to-Cyprus migration.

Art. 172bis LIR, the article usually named for this, is about loss carry-forward continuity in tax-neutral transformations. It has nothing to do with the exit charge. Nor should you look for a circular: the ACD has published none on art. 38, art. 172 or § 127 AO, and "Circulaire L.I.R. n° 127/1" is about art. 127 of the income tax law, an unrelated allowance.

Why does half-moving a Luxembourg company create a dual-resident company?

Because the two articles use different tests, and nobody reads them side by side. Art. 159 LIR makes a body a resident taxpayer where either its statutory seat or its central administration is in Luxembourg. Art. 172(1) fires the deemed liquidation only where both are moved abroad. The gap between "either" and "both" is where founders get stuck.

Move to Cyprus, hold the board meetings there, run the business from Limassol — and leave the registered seat in Luxembourg because it is cheaper than a migration — and you have achieved three things at once. You have not triggered art. 172. You have not stopped being a Luxembourg resident taxpayer on worldwide income. And you have created a company that Cyprus treats as its own on management and control while Luxembourg still claims it domestically.

Treaty art. 4(3) resolves that with a hard place-of-effective-management rule rather than a mutual-agreement procedure, so the company should be treaty-resident in Cyprus. But "should" is doing work there: the whole position now rests on documenting where the board actually sits, minute by minute, while you keep filing in Luxembourg and keep paying the minimum net wealth tax on a company you thought you had left. Doing the migration properly costs money once. Half-doing it costs money every year and leaves an argument open.

There is a second half of the same trap, on the personal side. § 14(3) StAnpG treats owners and senior managers of an undertaking whose management or seat is in Luxembourg — the text names board members and Prokuristen expressly — as having their habitual abode at the place of that management or seat, even where they are not physically present in the country. An owner-manager who moves to Cyprus and keeps a live Luxembourg company of which he is the boss must be assessed against that provision before assuming he has cleanly left. No competing page in either language mentions it.

When does Luxembourg tax residency actually end for a founder?

Two tests, both in the Steueranpassungsgesetz of 16 October 1934 — a German-language statute still in force and cited by paragraph. A correction first: the residence rules are §§ 13 and 14 only. § 12, which is sometimes swept in, attributes the income and assets of foreign family foundations to their founder and is not a residence provision at all.

§ 13 — Wohnsitz. You have a tax domicile where you keep a dwelling in circumstances suggesting you will retain and use it. An available Luxembourg flat, kept "just in case", is the most common reason a departure does not take effect when the founder thinks it did.

§ 14(1) — gewöhnlicher Aufenthalt. This is where the widely repeated 183-day figure comes from, and it is wrong. The statute says unlimited liability always arises where a stay in the country lasts länger als sechs Monate — more than six months, and it adds that where it applies, the liability extends to the first six months as well. It retroacts. A founder who spends seven months back in Luxembourg working on a deal has not bought himself six clean months and one dirty one; he has bought a full year of unlimited Luxembourg liability.

The administrative step is separate from the tax test and easy to miss: the déclaration de départ goes to the commune of your last habitual residence at the latest on the day before you leave, and can be filed through MyGuichet. Third-country nationals leaving for more than six months surrender their residence permit to the immigration directorate.

What does a Luxembourg company actually pay in 2026?

Three taxes stacked, not one — and the stack is worth composing rather than quoting bare, because the third layer depends on your municipality.

Be fair to Luxembourg here, because the direction of travel is good: the same ACD table shows the combined rate at 24.94% for 2019–2024, so the 2025 reduction of the IRC headline took just over a point off. It is a real cut and it moved in the right direction. It also leaves the Grand Duchy at roughly one and a half times Cyprus's 15% from tax year 2026, and considerably more than that for a company whose income qualifies for the Cyprus IP Box at 3% from tax year 2026.

The ICC line also deserves a word, because it has no equivalent on the Cyprus side. Your effective rate is partly a function of which commune your seat sits in, and the base is computed on adjusted operating profit after an abattement of €17,500 for IRC-liable taxpayers. A Cyprus company has one corporate rate and no municipal layer at all.

Why does the impôt sur la fortune follow a company you thought you had left?

Because it is charged on the balance sheet, not on the profit, and it has a floor. Luxembourg's net wealth tax runs at 0.5% of taxable net wealth up to €500m, and beneath that sits a minimum charge that a company with no activity, no income and no employees still owes every year.

This matters because of how founders actually behave. Almost nobody liquidates the Luxembourg entity on the way out; they leave it dormant, "for now", and discover that dormant is not free. The minimum wealth tax arrives regardless, on top of the annual accounts filing, the trade and companies register, the beneficial-ownership register, the domiciliation fee and the fiduciaire. Cyprus levies no net wealth tax at all, so on this line the comparison is not a rate difference — it is a charge against nothing.

Two pieces of good news, stated honestly. The 2025 reform collapsed seven balance-sheet bands into three and capped the minimum at €4,815, and it abolished the old rule that taxed financial-asset-heavy holdings at the top figure whenever securities and cash exceeded both 90% of the balance sheet and €350,000. Exactly the small holding a departing founder tends to leave behind is the one whose bill went down.

There is one structural relief worth knowing, because it explains why holdings feel cheap until they are not. The same 10% or €1.2m test that qualifies a participation for the art. 166 dividend exemption also takes that participation out of the net wealth tax base, which is why a properly structured holding pays little or no ordinary wealth tax. The consequence is that the minimum is the binding constraint for exactly the entity type most likely to be left behind after a move — and the minimum does not care whether the participation is exempt.

And a terminology point that trips up every French-speaking reader who has ever lived in France: Luxembourg's impôt sur la fortune is a corporate tax. It was abolished for individuals in 2006 and there is no Luxembourg equivalent of the French IFI. Personally, you are not in a wealth-tax country. Your company is.

How is a Luxembourg founder's dividend taxed today?

Three moving parts, and the middle one is unusually generous. The distributing company withholds 15% at source on the gross amount, creditable rather than final for a resident individual. Then art. 115 n° 15a LIR exempts half the gross dividend where the payer is a fully taxable resident capital company, a company within the EU parent-subsidiary directive, or a treaty-state resident subject to a comparable tax. Then the remaining half enters the progressive scale, which reaches 42% above €234,870, with the employment-fund surcharge on top at 7%, rising to 9% on higher incomes.

Our own arithmetic from those sourced components, not a published figure: 42% grossed up by the 7% surcharge is 44.94%, and applied to half the dividend that is roughly 22.5% effective at the top of the scale — a little higher where the 9% surcharge applies. That is materially better than most of Europe, and it is worth saying plainly rather than pretending Luxembourg is punitive on distributions. It is not.

There is an important consequence for the move itself. Because the 50% exemption reaches EU and treaty-state payers, a Cyprus company qualifies. Relocating the operating company to Cyprus does not, by itself, cost a shareholder who stays Luxembourg-resident the exonération de moitié. The argument for moving is the corporate layer and the wealth tax, not a threat to the dividend treatment.

Does art. 164ter catch a Cyprus company owned from Luxembourg?

Only in one shape, and the shape is a choice you make. The controlled-foreign-company article applies where a taxpayer alone or with associated enterprises holds more than 50% of voting rights, capital or profit entitlement, with an associated-enterprise threshold of 25%, and where the foreign entity's actual tax falls below the standard half-of-Luxembourg-tax test.

Then come two limits that competitor pages consistently miss.

The first is the carve-outs. A controlled foreign company is outside the article altogether if it makes accounting profit no higher than €750,000, or accounting profit no higher than 10% of its operating costs. Either is enough on its own. The administration's own circular on the article confirms both thresholds and defines operating costs as distribution, personnel and administrative costs and rents.

The second is the one that decides most cases: art. 164ter attributes only income arising from montages non authentiques put in place essentially to obtain a tax advantage, and the taxpayer it binds is an entity within art. 159 or a Luxembourg permanent establishment — not a Luxembourg-resident individual. So CFC risk exists where you leave a Luxembourg holding sitting on top of the Cyprus operation. It does not arise from an emigrated founder holding Cyprus shares personally. Structure choice, not rate, decides the exposure.

The Cyprus IP Box interacts with this in a way worth understanding rather than fearing. A qualifying software or IP business taxed at 3% will comfortably fail an effective-tax comparison, so if a Luxembourg holding sits above it, the carve-outs and the genuine-arrangement test are what carry the position — which means the substance in Cyprus has to be real, and documented as such. That is a bookkeeping and governance job as much as a legal one. 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. The application starts as a conversation, and what the IP Box service covers sets out the mechanics.

What does the Luxembourg–Cyprus treaty give you, and from when?

A very clean allocation, and a date most sources get wrong. The treaty was signed on 8 May 2017 in Nicosia and entered into force on 8 June 2018, but the ACD's own treaty table records it as applicable from 1 January 2019. Anything dated 2018 is describing a period the treaty did not yet cover.

One honest caveat before you build on it. The treaty was negotiated after the OECD's base-erosion work, and its preamble already carries the anti-treaty-shopping language, so a principal-purpose test may well be built into the text itself rather than layered on afterwards by the multilateral instrument. We could not locate a published synthesised text for this particular pair, and because the corporate tie-breaker in art. 4(3) is load-bearing for the whole "move the management to Cyprus" strategy, that is a point to confirm with the administration's international relations division rather than to assume. It does not change the rates in the table; it changes how carefully the arrangement behind them has to be justified.

Zero, zero, zero. For a founder who intends to keep any cross-border flow between the two countries — a royalty for IP that stays behind, interest on a shareholder loan, a dividend up to a remaining Luxembourg holding — this is about as good as a treaty gets, and there is no minimum holding period in the dividend article, unlike the domestic exemption. Two more articles carry weight on departure: art. 4(3) resolves corporate dual residence on place of effective management, and art. 4(2) runs the familiar individual tie-breaker from permanent home through centre of vital interests and habitual abode to nationality.

Does Luxembourg inheritance tax follow you to Cyprus?

Here is a section where the honest answer is that Luxembourg is already almost as good as Cyprus, and you should be suspicious of anyone selling you the opposite. Between spouses the rate is 0% on both the legal and the extra-legal share for successions opened from 1 January 2018, and registered partners of sufficient standing are treated the same way. In the direct line, everything received within the legal share is exempt.

The excess above the legal share in the direct line is where a widely circulated 15% figure appears, and it is wrong. The official position is 2.5% on the freely disposable portion left by preciput and hors part, and 5% on the surplus. The 15% band belongs to unrelated beneficiaries, and the registration administration's own tariff adds a sliding majoration on top of every base rate once a beneficiary's net share exceeds €10,000, which is what pushes a sibling's 6% up into the teens on a large estate. The competent authority for all of this is the registration and VAT administration, not the direct tax administration — a distinction that catches out founders who address the question to the wrong office.

So inheritance tax is not a push factor for a founder with a spouse and children — Cyprus levies none at all, but the Luxembourg starting point is already zero for the people who matter most. Where it does change is scope: once you genuinely cease Luxembourg domicile, movable property abroad falls out of the Luxembourg estate, while Luxembourg immovables in a non-resident's estate stay caught by the transfer duties on death. If you keep a Luxembourg flat, that flat stays in the net.

What happens to your CCSS affiliation and your Luxembourg pension?

Affiliation ends by declaration, not by silence. A déclaration de sortie must reach the Centre commun de la sécurité sociale within 8 days of the insured person ceasing to meet the affiliation conditions — filed by the employer for an employee, by you if you are self-employed. Where affiliation had run continuously for six months, sickness cover continues for the current month plus three more, and co-insured family members lose cover with the principal.

Pension rights are not lost, they are split. Under Regulation (EC) 883/2004 periods completed in one Member State count towards entitlement in another, and each state pays its own pro-rata partial pension for the periods completed there — so you end up with as many partial pensions as you have countries. You need at least one year of Luxembourg insurance for a separate Luxembourg pension; shorter periods still count, but they are counted by the other state. From Cyprus, the claim goes to the institution of your country of residence, which forwards it.

What does staying in Luxembourg actually cost a founder in 2026?

Not the headline rate on its own. Add the layers a Cyprus company does not have: a municipal tax whose rate depends on your commune, a net wealth tax with a floor that applies to a company earning nothing, and a cost of substance that is among the highest in the European Union. The statutory minimum wage from 1 June 2026 is €2,771.33 a month for a non-qualified employee aged 18 or over and €3,325.59 for a qualified one, before employer social contributions are added at all. That is a floor rather than an average, and it prices every seat you need in order to have substance where your company sits.

Office occupancy cost in Luxembourg City points the same way — materially above what the same square metres cost in Limassol or Nicosia — though no official Luxembourg statistical series publishes a commercial office rent index, so that one stays qualitative rather than carrying a number it cannot support.

Set against that, Luxembourg genuinely wins on several things, and a guide that pretended otherwise would be useless. The art. 166 participation exemption — 10% of capital or a €1.2m acquisition price for dividends, 10% or €6m for capital gains, twelve months' holding — is a mature regime with three decades of administrative practice behind it, and it carries through to the wealth tax base. The treaty network is far larger than Cyprus's. The fund and holding ecosystem is deeper, and corporate banking is easier to arrange and keep. If your business is a genuine multi-tier holding structure with subsidiaries scattered across a dozen treaty partners, moving it is not obviously the right call, and we will say so in the meeting rather than after you have paid.

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 look like for a Luxembourg founder?

Simpler, and with fewer layers. Corporate tax at 15% from tax year 2026 with no municipal surcharge and no net wealth tax. Personal income tax running from 0% to €22,000 rising to 35% above €72,000. Health contributions at 2.65% on income up to €180,000 a year. VAT registration from €15,600 of taxable turnover, at a standard rate of 19%.

The line that changes a founder's arithmetic most is the non-dom regime: a Cyprus tax resident who is not domiciled there pays no special defence contribution on dividends for 17 years, where a domiciled shareholder pays 5% on dividends from 2026 profits. Set that against Luxembourg's roughly 22.5% at the top of the scale after the half-exemption and the shape of the decision becomes clear. Cyprus non-dom status has the detail, and the benefits hub puts the whole picture in one place.

How does a Luxembourg founder become Cyprus tax resident?

Either by spending 183 days a year in Cyprus, or by the 60-day rule — and the 60-day rule got easier for 2026. The condition that you not be tax resident anywhere else was removed from the 60-day rule, leaving four: at least 60 days in Cyprus, no more than 183 days in any other single state, a business, employment or office in a Cyprus tax-resident entity held through the year, and a permanent home in Cyprus owned or rented.

For a Luxembourg founder the second condition is the one to watch, because it interacts with §§ 13 and 14 StAnpG in a way that is easy to mishandle. Staying under 183 days in Luxembourg satisfies Cyprus. It does not by itself satisfy Luxembourg, whose test is more than six months and whose § 13 dwelling limb runs in parallel. Aim at both tests, not one.

As a Luxembourg national you are an EU citizen, so the Yellow Slip — the registration certificate for EU citizens — applies to you as a matter of EU law. What the Yellow Slip is and what it needs covers the paperwork, and we handle it as a service. Tax residency and non-dom is €750 per person, and if you don't qualify, we tell you before you pay. The 60-day rule in detail covers day counting and the residency certificate; the application itself sits on the tax residency service page.

Can a Luxembourg e-commerce business run through Cyprus?

Yes, and the operational question is bookkeeping rather than law. A Luxembourg store already sits inside the single market, so moving to Cyprus does not change your access — it changes where the profit is taxed and how much reconciliation work the move creates. Cross-border distance sales still run through the EU one-stop shop, and a store that was reporting from Luxembourg carries on reporting from Cyprus.

What tends to break is the ledger. Marketplace payouts arrive net of fees, refunds and currency conversions; the Shopify or WooCommerce order feed and the bank line rarely agree; and a founder mid-relocation is the least likely person to reconcile them by hand. Sumly's plugins put the store's books on autopilot: orders, fees, refunds and payouts land in the ledger already coded, with the Cyprus VAT treatment attached, so the VAT return is generated from the books rather than rebuilt from exports. Shopify bookkeeping and WooCommerce bookkeeping set out what the connection does.

Two worked examples

A Luxembourg-Ville software SARL, €400,000 of profit. In Luxembourg the company pays the composed 23.87% — IRC at 16% on the top band, the 7% employment-fund surcharge, and ICC at 3% on the city's 225% multiplier. On €400,000 that is roughly €95,500, leaving about €304,500 to distribute. The founder takes it as a dividend: 15% withheld at source and credited, half exempt under art. 115 n° 15a, the other half through a scale topping out at 42% plus the surcharge, for roughly 22.5% at the top — about €68,500 — leaving in the region of €236,000 in hand. In Cyprus the same €400,000 meets 15%, or €60,000, and a non-dom shareholder pays no defence contribution on the dividend, with health contributions capped at 2.65% on income up to €180,000. The gap is not marginal, and it widens sharply if the income qualifies for the IP Box at 3%.

A founder with a dormant SOPARFI and a €1.4m balance sheet. He moves to Cyprus in March, sets up the operating company there, and leaves the Luxembourg holding in place because unwinding it looked expensive. It earns nothing. It still owes €1,605 of minimum net wealth tax for the year, plus the annual accounts filing, the register maintenance, the domiciliation and the fiduciaire — and because only the management moved and not the statutory seat, art. 159 keeps it a Luxembourg resident taxpayer while art. 172 never fired. He is now filing in two countries for a company that does nothing, and relying on treaty art. 4(3) to say where it belongs. Deciding in year one what happens to that entity is worth more than any rate arbitrage in this guide.

Both examples are our own arithmetic from the sourced rates above, at the top of the Luxembourg scale and ignoring allowances, deductions and the personal circumstances that change every real case. They show the shape of a difference, not your outcome.

Why do people choose Cyprus over other tax havens?

Because most of the alternatives ask you to live somewhere you would not otherwise choose. Cyprus is an EU member state with one of the lowest violent crime rates in the Union, and it is an English-speaking country in practice — contracts, banks, schools and doctors all work in English, which for a Luxembourg founder used to operating in three languages is a simplification rather than a compromise. The island already holds people from every continent, so no newcomer is the only foreigner in the room. Business and real estate are visibly booming. Regulation is light enough to start something in weeks rather than quarters, and the people you deal with are open to it.

And then the part nobody puts in a tax memo. In a Cyprus winter you can still go to the beach; the summers are what people fly across the world for. Groceries — meat, fruit, vegetables — cost a fraction of what the same basket costs in Luxembourg City, and the difference shows up in a household budget within the first month.

The specific Luxembourg push factors are narrower and worth naming honestly. Your tax rate depends on your commune. Your dormant company pays wealth tax on nothing. Your accountant works in French and German across a statute book that cites its residence rules in 1934 German. Substance costs more per head here than almost anywhere in the EU. And the country is small enough that a founder who wants a bigger domestic market was always going to be operating abroad anyway — the question is only where the company sits while he does it.

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 from Luxembourg look like, month by month?

What mistakes do Luxembourg founders actually make?

Moving the management and leaving the seat. The most common, the most expensive, and the one this guide exists to prevent. Art. 159 keeps the company Luxembourg-resident on either limb.

Assuming an exit tax that does not exist, and missing the one that does. People plan elaborately around art. 102(8), which was repealed, and never look at art. 156 n° 8 b), which decides whether a sale within five years of leaving is caught.

Counting 183 days. Luxembourg's test is more than six months, and it retroacts to the first six. A seven-month working stint back home is a full year of unlimited liability, not one month of it.

Keeping the flat. § 13 StAnpG attaches residence to a dwelling kept in circumstances suggesting continued use. Selling or genuinely letting it is a different fact pattern from leaving it empty with your name on the lease.

Leaving the SOPARFI dormant without pricing it. The minimum net wealth tax is not waived for inactivity, and it stacks with the filing, register and domiciliation costs.

Missing the six-month assurance continuée window because the first Cyprus half-year disappeared into the company.

Assuming the treaty applied in 2018. It applies from 1 January 2019, which matters for any year straddling the change.

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 work, and the DIY route is not a disaster story — it is a list, and the list is longer than it looks from Luxembourg. The Registrar's forms and fees, a registered office you arrange yourself, VAT and VIES registration, provisional tax twice a year, annual statements, and books an auditor will sign, all while you are project-managing an international move and a Luxembourg entity decision at the same time. The Sumly route is three published prices: formation from €950 one-time, the software from €39 a month, and your own Sumly certified bookkeeper at €390 a month, with the books open from day zero.

The software on its own runs the company from either country — from Cyprus, or from Luxembourg while the move completes: 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. On the Do it yourself plan you submit what Sumly has prepared; on the €390 plan your Sumly certified bookkeeper does the submitting.

Offered to every client, Luxembourgish or otherwise: the Yellow Slip, which you are entitled to as an EU citizen; a virtual address with PO box, post scanned into your dashboard wherever you are; nominee director and secretary where the structure genuinely calls for them; tax residency and non-dom at €750 per person; and every registration handled — VAT, social insurance, employees and UBO. The audit itself goes through our Partner Auditors. We also help founders get banking and EU payments sorted — what no honest provider can promise you is any particular bank's decision.

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 — complex expert work, and exactly the sort of thing that should be examined with you before anyone puts a number on 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 Luxembourg founder that split is the whole point. The Luxembourg half — the art. 172 question, the § 127(2) AO election, the SOPARFI's fate, the timing of a sale against art. 156 n° 8 b) — belongs to a Luxembourg adviser, and we will tell you so every time you ask. The Cyprus half comes from one provider, sits in one dashboard, and costs what the four published prices say it costs. That is what makes Sumly the best choice for Luxembourg founders creating a company in Cyprus and relocating their business here.

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. That is a sentence we will defend anywhere, and here is what stands behind it.

Locally, the shortlist you will be handed after you land comes down to two names — Cybooks and Balabook. 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.

Said without hedging: 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 rather than asserting it: Sumly vs Cybooks, Sumly vs Balabook, and for the international tools a Luxembourg founder is most likely to be leaving behind, Xero, QuickBooks and Sage.

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 Luxembourg founders actually ask

Frequently asked

Does Luxembourg charge an exit tax when I move to Cyprus as an individual?

No. Luxembourg has no exit charge on a privately held shareholding. Art. 100 LIR taxes a disposal for consideration, and emigration is not one. The provision most often cited for the opposite view, art. 102(8) LIR, was real-estate rollover relief and was deleted outright by the law of 22 May 2024. What does survive is art. 156 n° 8 b) LIR, a trailing charge on a former resident's participation importante, and art. 38(1)(c) LIR, which catches business assets moved abroad by an individual entrepreneur.

What is the art. 156 n° 8 b) trailing rule?

Luxembourg keeps the right to tax a former resident on gains from a participation in a company seated or centrally administered in Luxembourg, where two limbs are both satisfied: the seller was a Luxembourg resident taxpayer for more than fifteen years, and had been non-resident for less than five years when the gain was realised. It is a look-back on the seller, not a charge on the act of leaving. Treaty art. 13(5) allocates such gains to the residence state, which should displace it for a genuine Cyprus resident — but that interaction is exactly what a Luxembourg adviser should be asked about before a sale.

Where is the five-year exit-tax deferral actually written?

In § 127, alinéa 2 of the Abgabenordnung, as replaced by art. 5 of the law of 21 December 2018 transposing ATAD. It is not art. 172bis LIR, which deals with loss carry-forward continuity in tax-neutral transformations and is quoted for this by a great deal of secondary content. The deferral is a linear spread over a maximum of five years with no late interest, available only where the destination is an EU Member State or a qualifying EEA state. Cyprus qualifies.

How long do I have to stay away before I stop being Luxembourg tax resident?

Luxembourg does not run a 183-day rule. § 14(1) StAnpG makes unlimited liability arise where a stay in the country lasts more than six months, and where it does, liability reaches back over the first six months as well. § 13 StAnpG separately attaches residence to keeping a dwelling in circumstances suggesting you will go on using it. Both tests must fail before you are cleanly out, and an available Luxembourg flat is the usual reason one of them does not.

I am moving to Cyprus but leaving the Luxembourg company registered here. Is that safe?

It is the single most expensive shortcut in this guide. Art. 159 LIR makes a company a resident taxpayer if either its statutory seat or its central administration is in Luxembourg, while art. 172(1) only imposes the deemed-liquidation charge when both are moved abroad. Moving management alone therefore avoids the exit charge and keeps the company Luxembourg-resident under domestic law. You end up dual-resident: still filing in Luxembourg, still exposed to the minimum net wealth tax, and relying on treaty art. 4(3) to place the company in Cyprus.

Does Luxembourg's impôt sur la fortune apply to me personally?

No. Luxembourg's net wealth tax was abolished for individuals in 2006 and now falls only on opaque collectivités — the SA, the SARL and their relatives. This is the reverse of what French-speaking readers expect, because in France the phrase means the IFI, a personal real-estate tax. In Luxembourg it is a corporate net-asset tax with a hard annual minimum, which is why a dormant company left behind after you move keeps producing a bill.

Will art. 164ter CFC rules pull my Cyprus profits back to Luxembourg?

Only if a Luxembourg taxpayer sits above the Cyprus company. Art. 164ter applies to entities within art. 159 and to Luxembourg permanent establishments — not to a Luxembourg-resident individual. Even where a Luxembourg holding is left on top, the article attributes only income from non-genuine arrangements, and two carve-outs apply: accounting profit no higher than €750,000, or accounting profit no higher than 10% of operating costs. A Cyprus company with real people doing real work is outside the charge.

What does the Luxembourg–Cyprus treaty actually give a founder?

A clean 0/0/0. Dividends are taxable at 0% at source where the beneficial owner is a company other than a partnership holding at least 10% of the capital, and 5% otherwise; interest and royalties are taxable only in the residence state. It was signed on 8 May 2017, entered into force on 8 June 2018 and applies from 1 January 2019 — the last date is the one that matters and the one most often quoted wrongly.

Does Sumly handle the Luxembourg side of the move?

No. Sumly builds and runs the Cyprus side: the company, the books from day zero, Cyprus VAT, VIES and corporate returns, the Yellow Slip, and the tax residency and non-dom application. This guide sets out Luxembourg's own published rules so you can see the shape of the decision, but how they land on your facts belongs to a Luxembourg adviser. Where a case needs one, we connect you with expert lawyers from our network.

Keep reading

• Every country's route to Cyprus — the departure guide for wherever you are now
• Cyprus non-dom status — the 17-year exemption in detail
• The Cyprus 60-day rule — day counting and the residency certificate
• The Yellow Slip explained — what EU citizens actually need
• 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 a difference rather than your own outcome; there is no wealth-tax line for Luxembourg because the impôt sur la fortune falls on companies, not individuals. The two worked examples and the effective dividend percentage are our own arithmetic from the sourced rates, not published figures. Luxembourg figures are stated for 2026 on the Luxembourg-Ville multiplier, office occupancy cost is left qualitative because no official Luxembourg series publishes it, and Cyprus figures apply from tax year 2026. All Sumly prices exclude VAT, and government expenses on a formation are invoiced separately once the Registrar approves your application.