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

Two claims dominate this search and both are wrong. Cyprus is not on Spain's list of non-cooperative jurisdictions, so the five-year quarantine never applies to a Spanish national who moves there. And the Madrid wealth-tax exemption founders plan around has been switched off since the ITSGF arrived. AEAT's own pages settle both.

Updated for 2026 Cyprus tax law and regulations.

One partner for the Spanish exit file and the Cyprus company you are opening

Sumly is the one-stop, fully digitalized way to create a company in Cyprus, move a business you currently run from Spain, and operate it from the day it exists. We register the company, open your books the day you order, prepare every Cyprus return box by box, and handle the Yellow Slip, the tax residency registration and the non-dom application as fixed-price services. One dashboard, one provider, prices told upfront — rather than a gestor for one half, a despacho for the other, and nobody at all for the join.

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.

Is Cyprus a jurisdicción no cooperativa for Spain?

No, and this is the first thing to settle because so much of what a Spanish founder reads assumes the opposite. Cyprus appeared on the old Real Decreto 1080/1991 list of paraísos fiscales. That list is gone. What replaced it, and the concept it replaced it with, both leave Cyprus out.

The instrument in force is Orden HFP/115/2023, which set out the list of jurisdicciones no cooperativas and took effect in February 2023. It was amended this year by Orden HAC/649/2026, which removed Barbados, Dominica, Gibraltar, Seychelles and Trinidad y Tobago and added the Russian Federation in respect of its international holding companies regime. AEAT publishes the resulting enumerated list as an annex to its non-residents manual — Anguila, Bahréin, Bermuda, Fiji, Guam, Guernsey, the Isle of Man, the Cayman Islands, Jersey, Palau, Vanuatu and the rest — and Chipre appears nowhere on it. AEAT's own index page confirms Orden HAC/649/2026 as the operative amendment.

Three separate official confirmations of the same answer. That matters more than tidiness, because four consequences follow from it, and every one of them is favourable:

• The five-year quarantine on Spanish nationals does not engage, so residence can end cleanly.
• You do not have to prove 183 days of physical presence in Cyprus; an ordinary Cypriot certificate of tax residence does the job.
• The exit tax runs on the EU deferral branch rather than the non-cooperative branch with its guarantees.
• The presumption that treats certain entities in listed jurisdictions as Spanish-resident cannot be pointed at a Cyprus Ltd.

Does the five-year quarantine follow a Spanish national to Cyprus?

It does not, and this is the single most consequential correction on the page. AEAT states, in its discussion of who is a contribuyente, that a person of Spanish nationality who moves tax residence to a non-cooperative jurisdiction does not lose contribuyente status in the tax period of the change of residence, nor in the four following tax periods. That is five years of continued full Spanish taxation on worldwide income, and it is the rule sitting underneath the "four-year rule" framing you will find on English-language pages about leaving Spain.

Read the condition rather than the headline. The trigger is the destination, and the destination has to be on the list. Cyprus is not. Anyone advising a Spanish founder to budget five more years of IRPF on a move to Limassol is applying Dubai's answer to an EU member state.

What replaces it is ordinary and much better: your Spanish residence ends in the year the article 9 tests stop being met, and nothing about your passport extends it. The work moves from waiting out a quarantine to getting the article 9 analysis right, which is a different section below and a far more winnable problem.

Do Madrid and Andalucía founders really pay no annual wealth tax?

No, and this is the second correction, and the more expensive one to get wrong. Both regions do grant a 100% bonificación on the wealth tax quota. Both bonificaciones are currently suspended, and AEAT says so in terms, region by region.

On Madrid, AEAT states that while the Impuesto Temporal de Solidaridad de las Grandes Fortunas is in force the general 100% bonificación is not applicable, and a regional bonificación equal to the difference between the wealth tax quota and the ITSGF quota applies instead. Andalucía runs the same mechanism through the fifth transitional provision of its Ley 5/2021, substituting a bonificación measured by the difference against the ITSGF quota, after the joint limit in article 31 of Ley 19/1991 has been applied.

Look at what that does rather than at what it is called. The relief has not been cancelled; it has been inverted. Instead of the wealthy resident paying nothing, the region now claws its own wealth tax back up to the level the state would have taken through the ITSGF — so the money is collected either way, and the argument between Madrid and the Treasury is about which of them banks it. The taxpayer's cash position is broadly unchanged.

What does the Impuesto sobre el Patrimonio actually charge?

An annual percentage of what you own, on a progressive scale, every year, regardless of whether the assets produced any income. That is a genuinely different animal from an income tax and it is the strongest honest reason a Spanish founder looks abroad.

The state scale, which applies where a region has not legislated its own, runs like this:

Those are the figures AEAT publishes as the escala estatal, from 0.2% up to 3.5%. Three thresholds sit around them. The mínimo exento is €700,000 in general, though the regions hold normative competence over it and AEAT gives La Rioja at €700,000 and the Comunitat Valenciana at €1,000,000 as live examples of the spread. The main home is exempt up to €300,000 for the owner or the holder of a real right of use over it.

And then the trap that catches people who think a bonificación removes the paperwork. You must file if the quota comes out payable after deductions and bonificaciones — or, failing that, if the value of your assets and rights exceeds €2,000,000. Two million gross puts you inside the filing obligation even where nothing is due.

Is the ITSGF still in force in 2026, and what does it cost?

Yes, it is live, it is being amended, and the word temporal in its name has done no work since 2023. The Impuesto Temporal de Solidaridad de las Grandes Fortunas was created by article 3 of Ley 38/2022 as a state tax that the regions cannot cede, bonify or legislate away — which is precisely why it neutralises the Madrid and Andalucía reliefs.

The consolidated text gives that scale and reduces the base by a mínimo exento of 700,000 euros for taxpayers by obligación personal. Put the two together and the arithmetic is worth doing yourself: because the €700,000 reduction comes off before the €3,000,000 zero band, the practical entry point is around €3.7 million of net wealth rather than the three million the preamble talks about.

Two mechanics decide what it really costs a founder. The first is the credit for wealth tax actually paid, which is the anti-double-charge valve and the reason the regional inversion above works at all. The second is the joint cap: the ITSGF quota together with IRPF quotas cannot exceed 60% of the IRPF bases — but where it does, the reduction is itself capped, and it cannot exceed 80% of the ITSGF quota. At least a fifth of the charge survives no matter how little income you had that year. For an asset-rich, income-poor founder holding illiquid shares, that floor is the whole problem.

Still in force is not an inference. Ley 38/2022 originally applied for the first two years only; Real Decreto-ley 8/2023 prorogued it until wealth taxation is reviewed, AEAT's landing page carries a modelo 718 filing window opening on 1 July, and Orden HAC/652/2026 amended modelo 718 in June 2026. A tax nobody is planning to let lapse is being redesigned in its fourth year. Note the calendar too: modelo 718 sits in a July window of its own, separate from the Renta campaign in spring and from the informative returns in the first quarter.

Does Spain charge an exit tax when you move to Cyprus?

Yes, on unrealised gains on shareholdings, and it is the section most Spanish-language pages cover least usefully. The regime is article 95 bis LIRPF — statutorily ganancias patrimoniales por cambio de residencia, colloquially the impuesto de salida.

Three conditions have to hold together. You must lose contribuyente status by changing residence. You must have held that status for at least ten of the fifteen tax periods preceding the last period that has to be declared. And you must cross one of two thresholds: the market value of all your shares taken together exceeds €4,000,000, or — where your participation in a given entity is above 25% — the market value of that one participation exceeds €1,000,000.

The gain is the excess of market value over acquisition cost, attributed to the final year of Spanish residence and regularised by a complementary self-assessment in the first year you are no longer resident. It is taxed as savings income, so on the scale further down this page, topping out at 30%.

The ten-of-fifteen condition is the quiet filter. A founder who arrived in Spain six years ago is outside the regime entirely, however large the shareholding. A founder who has been Spanish-resident their whole life is inside it the moment the valuation clears the line — which brings us to how the valuation is done.

How does Spain value an unlisted S.L. for the exit tax?

By formula, and this is the part almost nobody on this search explains. Listed shares are taken at their quotation and collective investment vehicles at their liquidation value, which is uncontroversial. For an ordinary unlisted S.L. — the vehicle every reader of this page actually owns — AEAT sets the value as the greater of two figures: the net equity from the balance sheet of the last closed financial year, or the value obtained by capitalising at 20% the average of the results of the three preceding closed financial years.

Capitalising at 20% is the same operation as multiplying by five. That single line is a statutory earnings multiple, and it decides who crosses the threshold far more often than any balance sheet does:

An owner-managed consultancy averaging €200,000 of profit is valued at exactly a million euros by this rule, whatever its book equity says — and a million euros is precisely the threshold that applies once your stake is above 25%. Founders talk themselves out of the exit tax on the grounds that their company is obviously not worth four million. The four-million test is not the one that catches them. The 25% plus one-million test is, and the multiple is written into the statute rather than argued with a valuer.

How does the EU deferral work, and what exactly is modelo 113?

This is where Cyprus's EU membership pays for itself. Because the destination is another EU member state with effective exchange of information, article 95 bis.6 lets you elect into a regime in which the gain is computed and declared but the tax is not payable — unless, within the following ten ejercicios, one of three things happens.

AEAT lists them: that the shares are transferred inter vivos, that the taxpayer loses resident status in an EU or EEA member state, or that the communication obligations are breached. Survive ten years without any of them and the charge is simply never self-assessed. It lapses. That is a materially better outcome than most departure regimes in Europe offer, and it is the single fact that makes the Spain-to-Cyprus route work for a founder with a valuable company.

The third trigger is the one that fails in practice, because it is administrative rather than economic. The election is made and maintained through modelo 113, which communicates the article 95 bis.6 election, the gain, the shares that generated it, the ownership percentages, the market value and the destination country. You must also report the destination address and any later change of address, and confirm continued ownership.

Two related branches exist and are worth naming so you can ask about them by name rather than by rumour. There is a separate deferral for temporary moves abroad for work reasons, on its own terms — and a third branch for moves to non-cooperative jurisdictions, which Cyprus movers never reach. We are not publishing the periods or conditions attached to the work-related branch here, because AEAT's own sub-page for it was not reachable when this guide was researched and a number without a source has no business on this page. For a move to Cyprus you are on the EU branch above, which is fully documented.

Do Spanish CFC rules catch a Cyprus company?

They can, and whether they do is decided by substance rather than by structure. The regime is transparencia fiscal internacional — article 100 LIS, article 91 LIRPF — and it attributes certain income of a majority-held foreign entity to its Spanish owner as though the owner had earned it directly.

AEAT sets out three gates. The participation in capital, own funds, results or voting rights must be equal to or greater than 50%, measured jointly with related entities and with persons connected by family ties. The tax of an identical or analogous nature actually paid abroad must be less than 75% of what Spain would have charged on the same income. And the regime does not apply where the entity is resident in an EU or EEA member state and the taxpayer proves it carries on genuine economic activities.

Take those one at a time, because each has a practical edge.

The family aggregation kills the most common piece of amateur planning. Splitting a Cyprus holding across yourself, a spouse and two adult children does not get you under 50%; the shares are counted together.

The 75% test is a computation, but the direction of travel is easy to see. Spain's general corporate rate is 25%, so three quarters of it is 18.75%. Cyprus charges 15% from tax year 2026, which sits below that line. Be honest about what the statute actually compares, though: it compares tax paid on the specific income against Spanish tax on that same income, not headline against headline, and Cyprus's participation exemption on dividends can push the effective figure lower still. The realistic expectation is that a Cyprus Ltd clears the low-tax limb.

Which leaves the EU escape carrying the whole defence — and that is the correct place for the argument to sit. Real staff, real premises, real decisions taken in Cyprus. Not a nameplate. On what the regime attributes: it reaches passive income — dividends, interest, royalties, gains on financial assets, real-estate income, related-party financial services — and it reaches the entity's entire income where there is no genuine organisation of people and assets behind it. We are stating that qualitatively on purpose; AEAT's enumerating sub-page was unreachable during research, so the statutory catalogue and its de minimis are a question for your Spanish adviser rather than a figure we will print.

When does Spanish tax residency actually end under article 9 LIRPF?

When none of three tests is met — and it is the third that ends most plans, not the day count. AEAT's residence chapter gives them in order.

The 183 days. More than 183 days in Spanish territory in the calendar year makes you resident. Sporadic absences count towards those days unless you prove tax residence in another country, and where that country is a non-cooperative jurisdiction Spain can demand proof of 183 days of actual presence there. For Cyprus, an ordinary certificate of tax residence is what is asked for.

The centre of economic interests. Residence follows where the main nucleus or base of your activities or economic interests sits — directly or indirectly. Those last two words are doing real work. Holding the operating business through a chain of companies does not move the nucleus; it just lengthens the paper trail to it.

The family presumption. The same page provides that residence in Spain is presumed where your legally non-separated spouse and dependent minor children habitually reside in Spain. It is rebuttable — the text says salvo prueba en contrario — but it starts with you on the wrong side of the argument.

Lead with the third one when you plan, because it is where this actually goes wrong. The founder who moves to Limassol in September while the family finishes the school year in Spain, intending to bring them over in June, has spent a full tax year rebutting a presumption rather than simply not attracting one. Sometimes there is no alternative. But it should be a decision taken with the cost priced in, not a logistics detail discovered afterwards.

Can Hacienda treat your Cyprus company as Spanish anyway?

Yes, and this is the risk that outlives a flawless personal move. An entity is resident in Spain if any one of three things is true: it was incorporated under Spanish law, its domicilio social is in Spanish territory, or its sede de dirección efectiva is in Spanish territory — the place where the direction and control of its activities as a whole are located.

Keep domicilio social and sede de dirección efectiva apart in your head; Spanish practice does, and conflating them is how founders reassure themselves wrongly. A Cyprus registered office satisfies neither of the first two criteria for Spain, which is why they feel like the answer. The third criterion does not care where the office is. It asks where the company is run.

The failure mode is unglamorous. A founder incorporates in Cyprus, appoints local directors, and then keeps making every real decision — pricing, hiring, which product gets built, whether to take the loan — from Málaga, while Nicosia signs what it is sent. That is a Spanish-resident company paying Spanish corporate tax on worldwide income, and no amount of correctly dated Cypriot minutes fixes it after the fact.

What protects you is ordinary: decisions genuinely taken in Cyprus by people who are genuinely there, board meetings that decide rather than ratify, material spending signed off locally, and records that match the way the business actually behaves. Our guide to nominee directors in Cyprus sets out where a nominee helps and, more importantly, where one cannot.

What do modelo 720 and modelo 721 require once you own a Cyprus company?

They are two different declarations and merging them is a common source of missed filings. Both are informative — they raise no tax by themselves — and both close on 31 March.

Modelo 720 is one form carrying three legally separate reporting obligations: accounts at financial institutions abroad, securities and rights and insurance and income deposited or obtained abroad, and immovable property abroad. AEAT is explicit that these are three different information obligations reported on a single form. Your Cyprus Ltd shares sit in the second block.

The threshold is €50,000, and it is applied to each block separately rather than aggregated across them. Joint ownership does not remove the obligation. Having filed once, you file again only where a block rises by more than 20,000 euros over the last declared value, or where an asset is sold or cancelled. The window is 1 January to 31 March of the following year.

Modelo 721 covers virtual currencies held abroad and nothing else. There is no obligation where the 31 December balances of all virtual currencies held abroad do not jointly exceed 50,000 euros, and the same first-quarter window applies. It was approved by Orden HFP/886/2023. A founder holding crypto and Cyprus shares has two forms, not one.

On penalties, the honest position is that the frightening regime is gone and we are not going to quote you the new numbers. The Court of Justice of the EU struck down Spain's original modelo 720 penalties in January 2022 in case C-788/19, and Ley 5/2022 rewrote them. AEAT states that what now applies is the general regime in articles 198 and 199 of the Ley General Tributaria for failing to file on time, or filing incorrectly, where there is no economic loss to the Treasury, applied independently to each of the three obligations. Those articles are dramatically milder than what they replaced — the CJEU found the old approach disproportionate, including a rule that made undeclared foreign assets effectively imprescriptible. AEAT's page names the governing articles without quantifying them, so no euro amounts appear here.

What does the Spain–Cyprus treaty actually give you?

More than most Spanish commentary assumes, because that commentary predates it. There was no treaty at all between Spain and Cyprus until one was signed in Nicosia in February 2013; it entered into force on 28 May 2014. Together with Cyprus's presence on the abolished 1991 list, that gap explains why so much of what circulates in Spanish is describing a world that ended twelve years ago.

That is the consolidated convention as published in the BOE. Two points repay reading twice.

Article 13(5) is the payoff and article 13(4) is the trap. Once residence has genuinely shifted, a later sale of shares is taxable only in Cyprus — unless more than half the company's value is Spanish immovable property, in which case Spain keeps the right. If your S.L. owns the building it works from, model that explicitly rather than assuming the general rule.

And the corporate tie-breaker is sede de dirección efectiva, not a negotiation between competent authorities. That is genuinely favourable, because it is a test you can apply and evidence in advance. It also points straight back at the section above: the treaty answers the question by asking where the company is really run.

What happens to your existing S.L.?

It does not become Cypriot because you did. The S.L. was constituted under Spanish law and has its domicilio social in Spain, and either of those alone makes it Spanish-resident. Your own emigration changes nothing about the company's tax position, which surprises people who assumed the two travel together.

While it stays Spanish-resident it pays Impuesto sobre Sociedades on worldwide profit, and distributions to you as a now-Cypriot shareholder are Spanish-source dividends. Here the treaty makes a structural point that is worth money: the 5% cap applies to any recipient, but the 0% rate is available only where the recipient is a company directly holding at least 10% of the payer's capital. An individual shareholder cannot reach it. If the S.L. is going to keep running and keep distributing, a Cyprus holding company above it is a different answer from personal ownership, and that is a conversation to have before anything is signed.

Retention is not neutral for your own residence either. Keeping the operating S.L. keeps the main nucleus of your economic interests visibly in Spain, which is the second article 9 test — the one that reaches through structures rather than around them.

Selling or liquidating before departure realises a gain on the savings scale, up to 30%. Doing it after a clean residence change puts it under article 13(5), Cyprus-only, unless the property test bites. But the exit tax may already have crystallised a deferred charge on the same shares, and an inter vivos transfer inside ten years is exactly the event that makes that deferred charge payable. So the two answers interact, and the sequencing of departure and sale is the highest-value planning question on this whole route. We are not going to pretend there is a clean general answer to it; there is a correct answer for your facts, and it is worth paying a Spanish adviser to produce.

One thing we will not assert: whether a formal EU cross-border conversion of the S.L. into a Cypriot entity makes sense. It is a distinct legal route with its own consequences and we have not researched it to the standard the rest of this page is held to.

What does a Spanish founder actually pay today?

Enough to make the comparison worth running properly, and with more moving parts than most countries. Corporate tax first — Spain is midway through a multi-year transition introduced by Ley 7/2024, so 2026 is not 2025:

AEAT states the general rate as 25 per 100, and publishes the year-by-year transitional schedule for microempresas and reduced-dimension entities on its novedades page for the Ley 7/2024 régimen transitorio. Two conditions matter before you plan around the low numbers: the reduced rates are not available to a passive asset-holding entity, and the 15% nueva creación rate requires an actual economic activity. A pure holding vehicle pays 25%.

Then the owner takes the money out, into the savings scale:

Those are the combined state and autonomous figures AEAT publishes for the gravamen de la base liquidable del ahorro, running from 19% to a top rate of 30%. That is tax year 2025 — the latest scale AEAT has published in a manual, because the 2026 Renta manual does not exist until the 2026 return is filed in spring 2027. We have identified no amending norm, but we are labelling it as the latest published rather than asserting a 2026 figure.

Inheritance and gift tax is where the regional lottery is most extreme. The state scale in Ley 29/1987 runs across eleven brackets from 7.65% to a top marginal rate of 34%, with multiplier coefficients running as high as 2.4 by kinship group and pre-existing wealth, and it applies only where the region has not legislated its own. Madrid grants a 99% bonificación for close relatives and, from July 2025, raised the Grupo III bonificación to 50% and extended it to collaterals by affinity; Andalucía grants 99% for Grupos I and II on both mortis causa and inter vivos acquisitions.

Note the asymmetry, because the two are constantly conflated: Madrid and Andalucía give near-total relief on inheritance and gift tax, and that relief is fully operative. Their wealth tax relief is the one currently switched off.

Where Spain is genuinely good, and who should stay

A page that only lists grievances is a page a sophisticated reader stops trusting, so here is the other side, and it is substantial.

The régimen especial de impatriados — the ley Beckham — lets someone acquiring Spanish tax residence be taxed broadly under non-resident rules for the year of the change plus the five following tax periods, with employment income at 24% and 47% above 600,000 euros. From January 2023 the prior-non-residence requirement fell from ten years to five and eligibility widened to teleworkers, administradores, entrepreneurs, highly qualified professionals working with empresas emergentes or in R&D, and to spouses and children under 25. It is an inbound regime and irrelevant to a departing founder — except as evidence that Spain competes hard for mobile people, and as a real reason some readers of this page should not move at all.

The Ley de Startups is the other half of that argument. A certified empresa emergente pays 15% for the first period with a positive base and the three following, gets the tax debt deferred for twelve months and then six without guarantees or late-payment interest, sees the employee share exemption raised from 12,000 to 50,000 euros a year, and carries an investment deduction raised to 50% on a maximum base of 100,000 euros. The definition is tight — under five years old, seven in biotech, energy and industrial sectors, no dividends ever distributed, not listed, and turnover no higher than ten million.

The fair summary is this. Spain is a genuinely good place to start a company and an expensive place to hold capital afterwards. The incentives are front-loaded and they expire; the wealth taxes are permanent and they recur every year on whatever the incentives helped you accumulate. That is a sharper way of putting the push factor than "Spain has high taxes", and it is also why the founders who leave tend to be a specific profile: past the startup phase, holding an appreciated stake, and now paying an annual percentage on it.

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 Spanish founder?

Flatter, and with an entire category of tax simply absent. A Cyprus limited company pays 15% from tax year 2026 on taxable profit — one rate, no bands, no transitional schedule, the same on €80,000 as on €8 million. Income from qualifying intellectual property can be brought down to an effective 3% from tax year 2026 under the IP Box.

Then the money comes out, and the gap opens. A Cyprus tax resident who is not domiciled in Cyprus — the non-dom position virtually every relocating founder qualifies for — pays no Special Defence Contribution on dividends for 17 years, and dividends sit outside Cyprus personal income tax altogether. What remains is GeSY at 2.65% on income up to €180,000 a year — a ceiling of €4,770 whatever you distribute. A shareholder who is Cyprus-domiciled pays 5% on dividends from 2026 profits instead, which is why the non-dom registration is worth doing properly rather than assuming.

Salary, where you take one, runs on personal bands from 0% to €22,000 rising to 35% above €72,000. VAT registration bites at €15,600 of taxable turnover, at a standard rate of 19%.

And the part that matters most to the reader who has just read four sections about the Impuesto sobre el Patrimonio and the ITSGF: Cyprus levies no annual net wealth tax and no inheritance tax. There is no modelo 714 equivalent, no modelo 718 equivalent, and no July window. For a founder whose Spanish bill is driven by what they own rather than what they earn, that absence is the entire decision.

How does a Spanish founder become Cyprus tax resident, and does the Yellow Slip apply?

Through the 60-day rule in most cases, and yes — as an EU citizen you qualify for the Yellow Slip, which is one of the genuine advantages a Spanish founder has over a British or American one on the same journey.

The straightforward route to Cyprus tax residence is more than 183 days a year. The alternative asks for fewer days and more commitment on the ground, and it got easier in 2026 because the awkward fifth condition was removed from the 60-day rule. Four conditions remain: 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 person held through the year; and a permanent home in Cyprus that you own or rent.

The dropped condition — not being tax resident anywhere else — was the one that made mobile founders nervous, because another country's claim used to disqualify you outright. Competing claims now resolve through the treaty tie-breaker instead, which for a Spain–Cyprus case means permanent home, then centre of vital interests, then habitual abode.

The practical detail for a Spanish reader is that a directorship of your own Cyprus company can be the office the third condition asks for. Forming the company and establishing residence are therefore one project rather than two — and the same directorship is what gives the sede de dirección efectiva analysis something real to look at. The Yellow Slip is the registration certificate for EU citizens exercising free movement, and we run that file alongside the company; how the Yellow Slip works covers the documents in detail, and the 60-day rule covers the day counting and the certificate.

What happens to your social security and your Spanish pension?

Honestly: this is the section where we tell you what we could not verify, because the alternative is inventing it. The Seguridad Social website refused every request made to it while this guide was researched, across four separate URLs. Under the rule this whole cluster is written to, that means no duration, no procedure and no figure appears here.

What can be said at the level of mechanism, without asserting anything unsourced:

• Spain and Cyprus are both EU member states, so which country's system applies is decided by the EU coordination rules rather than by Spanish domestic law on its own, and a person is subject to the legislation of a single member state at a time.
• A posting mechanism exists under which someone temporarily working in another member state stays in the sending state's system. We are not publishing its duration, its form numbers or its conditions.
• Contribution periods completed in different member states are aggregated for pension entitlement, so a Spanish contribution record is not lost when you leave.
• An autónomo genuinely relocating their activity would leave RETA and join the Cypriot system. The conditions commonly attached to posted self-employed people are exactly the ones we could not open and verify, so they are not stated here.

Take this to the Tesorería General de la Seguridad Social directly, before you go rather than after. It is the sort of question that is quick while you still have a Spanish address and slow once you do not. On the Cyprus side we handle the social insurance registration as part of the registrations bundle.

Why do people choose Cyprus over other tax havens?

Because it is somewhere people actually build a life, which is not true of most of the alternatives on the same shortlist. The tax is what starts the conversation. It is rarely what keeps anyone here after year two.

Cyprus has among the lowest violent crime rates in the European Union — usually the first thing a family arriving from a large Spanish city notices, and the thing they mention most when they talk about the move afterwards. It is an English-speaking country in every way that matters commercially: banking, professional services, contracts and most official dealings run in English, which shortens the landing considerably. People from all over the world are already here, so no one is the only foreigner in the room. Business and real estate are both booming, and the administration stays broadly friendly and open towards people who want to trade rather than layering another authorisation over every step. Groceries — meat, fruit, vegetables — are cheap. And the beaches do not close: in a Cyprus winter you can still swim, and the summers are what people cross the world to reach.

The Spanish push list is specific, and every item on it is sourced above rather than asserted. An annual tax on net wealth reaching 3.5% on the state scale, charged on what you own whether or not it produced income. A second national wealth tax, the ITSGF, layered on top and designed expressly to neutralise regional relief — which it did, since Madrid and Andalucía both suspended their 100% bonificaciones in response. A tax billed as temporal for two years that has now been extended indefinitely and was still being amended in June 2026. A 60% joint cap whose relief is itself capped at 80%, so at least a fifth of the ITSGF quota is payable however low your income was. A savings top rate of 30% whose top band was raised, not lowered, with effect from 2025. And a compliance calendar with informative returns in the first quarter, Renta and Patrimonio in the spring, and modelo 718 in a July window of its own.

Underneath all of it sits the regional lottery, which is the underrated push factor. The same family with the same assets pays radically different amounts depending on which comunidad they live in, and a regional election can move it. Uncertainty, not just level, is what makes people go.

Can a Spanish e-commerce brand run through Cyprus?

Yes, and the framing for a Spanish seller is operational and rate-driven rather than about market access — you are inside the single market from either country, and we are not going to dress that up as something it is not.

A Cyprus company carries an EU VAT number your customers can verify in VIES, zero-rates intra-EU business sales on the usual conditions, and uses the one-stop shop for consumer sales across the bloc. A buyer in Seville or Bilbao sees no difference at checkout. What changes is which state taxes the profit, whether an annual charge on the accumulated result is waiting at the end of the year, and how much of the monthly compliance you still touch by hand.

That last part is where online stores actually come apart: thousands of small transactions, two or three payment processors, several currencies, and a VAT treatment that flips with the buyer's type and country. Sumly's Shopify and WooCommerce plugins pull orders, refunds, fees and payouts into the books with the correct Cyprus VAT codes already attached, so the return assembles itself out of the sales rather than being rebuilt from a CSV the week it is due. Live bank feeds and multi-currency invoicing carry the rest, and the VAT feature shows the return filling in as the quarter runs.

Two worked examples

A consultancy at €300,000 of annual profit. Through a Spanish S.L. on the general rate, corporate tax takes €75,000, leaving €225,000 to distribute. Running that through the savings scale — €1,140, then €9,240, then €34,500, then €6,750 in the 27% band — gives €51,630 of personal tax, so about €173,370 reaches the founder and the combined take is a little over 42%. Through Cyprus the company pays €45,000, the €255,000 distributed to a non-dom meets only GeSY at its €4,770 ceiling, and roughly €250,230 lands. That is a gap of about €76,860 in a single year, before any annual charge on the accumulated result is considered on the Spanish side.

A software company at €750,000 of qualifying profit. In Spain the general rate takes €187,500 and the €562,500 distributed runs up into the 30% band, costing €150,630, leaving about €411,870. In Cyprus, income qualifying under the IP Box is taxed at an effective 3% — €22,500 — and the €727,500 distributed meets the same €4,770 GeSY ceiling, leaving roughly €722,730. At this scale the gap stops looking like a saving and starts looking like a different business model. It is also the profile most likely to cross the exit-tax threshold on the way out, because a company averaging that profit is worth several million by the 20% capitalisation rule alone.

Both examples assume full distribution, headline rates and that all IP income qualifies. Your own region, your salary-versus-dividend mix, the timing of the departure and the exit-tax position on your shares all move the answer, which is what a meeting is for. The calculator at the top of this page compounds the annual difference, because each year's saving is also invested and Cyprus does not tax the holding or the return.

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 Spain look like, month by month?

Every file runs at its own pace, so read the months below as sequence rather than as dates.

• Before anything is filed — and this is where we start. We put a Spanish adviser from our network on your departure date, on whether article 95 bis reaches your shares, and on the 20% capitalisation valuation of the S.L. Together we settle the structure — a standalone Cyprus company, or a Cyprus holding above the Spanish one — before we incorporate. We map the article 9 day count with you, and if the family is not moving with you, we price that decision properly rather than leaving it as an assumption.
• Month 1. We order the Cyprus company; the books open the same day, and we open the Yellow Slip file. You take up the directorship that anchors the 60-day rule, and we minute the real decisions in Cyprus from the first board meeting rather than from the first audit.
• Months 1–3. We register for VAT and, where relevant, social insurance, employees and UBO, and get banking and EU payments moving. You rent or buy the permanent home the 60-day rule requires, and we tell you what qualifies.
• Months 3–6. You move the ordinary running of the business — pricing, hiring, suppliers, spending approvals — to Cyprus, because that is what the sede de dirección efectiva test looks at, and we run it from here with you. Your Spanish adviser deals with the S.L. on their own timetable, not on a redomiciliation salesman's.
• The first filing season after you leave. Your adviser files modelo 113 inside its window if the exit tax applied — a hard date, not an administrative loose end — and files modelo 720 and modelo 721 for any year you were still resident. We apply for the Cyprus tax residency certificate and register you as non-dom.
• Years one to ten. We keep the modelo 113 communications current with your adviser, including any change of address. Do not transfer the shares inter vivos and do not leave the EU or EEA without asking us to price what it does to the deferred charge first. Ten clean years and it lapses.

What mistakes do Spanish founders actually make?

The costly ones repeat, and almost none of them are exotic.

Believing Cyprus is still black-listed, and either abandoning the plan or paying for advice about a quarantine that does not apply. Believing the Madrid or Andalucía bonificación still zeroes the annual charge, and discovering the ITSGF in July. Assuming the exit tax cannot reach a company that is "obviously not worth four million", without ever running the 20% capitalisation rule. Electing into the EU deferral in conversation and never filing modelo 113 — which converts a deferral into a payable charge through the third trigger event. Moving alone in September and leaving a spouse and school-age children in Spain, then spending a year rebutting the family presumption. Splitting a Cyprus holding across the family to get under the CFC threshold, which the joint-measurement rule counts back together. Keeping the S.L. running and distributing to yourself personally, forfeiting the treaty's 0% rate that only a corporate shareholder can reach. Forgetting that the €2,000,000 gross figure triggers a Patrimonio filing obligation even when nothing is payable. Filing modelo 720 and assuming modelo 721 was covered by it. And running the Cyprus company from a laptop in Spain while directors in Nicosia sign what they are sent.

Nearly all of them come from treating the move as a single event rather than as two tax systems handing over to each other over several years.

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 are real, and the honest question is how much administration you want to carry inside a legal system you have never used while you are also moving a household. The do-it-yourself version means 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 that will satisfy an auditor who has not met you. Sumly's version is four published prices: formation from €950 one-time, the software from €39 a month, a Sumly certified bookkeeper at €390 a month, and tax residency with non-dom at €750 per person.

What the €950 covers is worth being precise about: the name check, all registration paperwork prepared and submitted, the company registered with the Cyprus Registrar of Companies, and your Sumly books opened the day you order. Government expenses are invoiced separately once the application is approved.

The software on €39 a month runs the whole company, from Cyprus or from Spain: invoicing, AI double-entry bookkeeping that books your documents for you, live open-banking feeds, every VAT, VIES, provisional and corporate return prepared box by box, live reports, a document inbox with an email address of its own, 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.

Sumly offers every part of it to everyone: a virtual address with PO box, including digital scanning of your post delivered into the dashboard wherever you are; nominee director and secretary where a structure genuinely calls for them; the Yellow Slip, which as a Spanish citizen you qualify for; tax residency and non-dom at €750 per person; audit through Partner Auditors; and every registration handled — VAT, social insurance, employees and UBO, filed right the first time.

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 sort of thing that should be looked at with you before anyone quotes a price. 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 Spanish founder that division of labour is the point. The Spanish half of this move — article 95 bis, the valuation, the residence file, the S.L. — belongs with a Spanish adviser, and we will say so every time. The Cyprus half is one provider, one dashboard and four published prices. That is what makes Sumly the best choice for Spanish founders creating a company in Cyprus and relocating the business they already run.

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 will defend that sentence in front of anyone, and the evidence sits underneath it.

The two Cyprus-built alternatives a Spanish founder will be shown are 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.

Every one of these is meant literally, and we will stand behind each: best support, best bookkeeping software, best AI for bookkeeping, best bookkeeper, best prices — and all of it done easily. The detail is published rather than claimed: Sumly vs Cybooks and Sumly vs Balabook, plus the international tools a Spanish founder may already be running in Xero, QuickBooks and Sage.

On the IP Box, one line 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. The application starts as a conversation, and that is one reason we scope it with you rather than pricing it from a form. How to claim the IP Box sets out how a claim is built, and the IP Box service page covers what we do on it.

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 Spanish founders actually ask

Frequently asked

Is Cyprus a paraíso fiscal or a jurisdicción no cooperativa for Spain?

No. The current list is Orden HFP/115/2023, amended by Orden HAC/649/2026 in June 2026, and AEAT publishes the enumerated list as Anexo IV of its non-residents manual. Chipre does not appear on it. The confusion comes from the superseded Real Decreto 1080/1991 list, on which Cyprus did appear, and which a great deal of Spanish-language commentary is still quietly working from.

Does the five-year rule for Spanish nationals apply if I move to Cyprus?

No. Article 8.2 LIRPF keeps a Spanish national inside IRPF for the year of the move plus four more only where the destination is a non-cooperative jurisdiction. Cyprus is not one, so the quarantine simply does not engage. Residence ends in the ordinary way, in the year the article 9 tests stop being met. Any page that builds its Spain-to-Cyprus advice on the four-year or five-year rule is describing a different destination.

If I live in Madrid, do I really pay no wealth tax?

Not any more. Madrid's 100% bonificación is real, but AEAT states that it does not apply while the ITSGF is in force. What you get instead is a bonificación equal to the difference between your wealth tax quota and the ITSGF quota — which means the money is collected either way. The same suspension applies in Andalucía. A founder who believes the annual charge is zero is planning on a rule that is switched off.

How does Spain decide whether my S.L. is worth enough to trigger the exit tax?

By statute, not by negotiation. For unlisted shares the value is the higher of net equity from the last closed balance sheet, or the result of capitalising the average profit of the three preceding closed years at 20%. Capitalising at 20% is the same as multiplying by five, so an S.L. averaging €200,000 of profit is worth €1,000,000 for this purpose — exactly the threshold that bites where you hold more than 25%.

What is modelo 113 and what happens if I forget it?

It is the communication that switches on the EU deferral of the exit tax. You use it to elect into article 95 bis.6, declare the gain, name the destination state and its address, and confirm you still hold the shares. Breaching the communication obligations is one of the three events that makes the deferred charge payable, alongside selling the shares inter vivos and leaving the EU or EEA. The deadline runs from the move to the end of the filing period for the first year you are no longer a contribuyente.

Will Spanish CFC rules attribute my Cyprus company's income to me?

Only if three things line up. You need 50% or more of the capital, funds, results or votes, measured jointly with related entities and with family members — splitting the holding across a spouse and children does not help. The company must be taxed at less than 75% of what Spain would have charged. And the EU economic-activity escape must fail. Cyprus normally clears the low-tax limb, so the whole defence is real substance in Cyprus.

Can Hacienda say my Cyprus company is Spanish?

Yes, on the third corporate residence criterion. A company is Spanish-resident if it was formed under Spanish law, or has its domicilio social in Spain, or has its sede de dirección efectiva in Spain — the place where the direction and control of its activities as a whole sit. A Cyprus Ltd with a Nicosia registered office is Spanish-resident if it is actually run from Valencia. This is the risk that survives a perfectly clean personal move.

Do I have to keep filing modelo 720 in Spain?

For any year in which you were still a Spanish tax resident, yes, if you crossed the €50,000 threshold on any of the three separate blocks — accounts, securities including your Cyprus shares, and real property. After that, you file again only where a block rises by more than €20,000 over the last declared value, or where something is sold or cancelled. The window is 1 January to 31 March.

Does Sumly advise on Spanish tax?

No. Sumly builds and runs the Cyprus side: the company, the books from day zero, Cyprus VAT, VIES, provisional and corporate returns, the Yellow Slip, and the tax residency and non-dom application. This guide sets out Spain's own published rules, sourced to AEAT and the BOE, so you can see the shape of the decision. Whether article 95 bis reaches your shares is a question for a Spanish adviser, and 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
• Cyprus tax benefits for foreigners — the whole picture in one place
• What changed in the 2026 Cyprus tax reform
• How to register a company in Cyprus and what it costs
• Cyprus vs a Portuguese company — the other Iberian comparison founders run

The calculator on this page uses headline rates, an assumed annual return and full distribution of profit, so it shows the shape of the difference rather than your own outcome. Spanish corporate rates are stated for 2026 and the savings scale for tax year 2025, the latest AEAT has published; 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.