Case Study: Elimination of Dual Tax Residency

Client Situation

Our client is an entrepreneur with an international business who effectively lived between several countries and was considering obtaining Cyprus tax residency under the 60-day rule.

His structure looked as follows:

• business operations conducted in multiple jurisdictions;
• family residing in another country;
• regular travel between countries;
• less than 183 days of presence in each country.

Initially, the client relied on a widely held assumption that if a person spends fewer than 183 days in a country, tax residency does not arise. However, international tax practice is far more complex, and tax residency can be determined based on several other factors.

The client approached our firm to determine his international tax position and eliminate the risk of dual tax residency, as both his business activities and personal ties were spread across multiple jurisdictions.

The key question was:

• which jurisdiction could recognize him as a tax resident, and
• how to structure his tax residency in order to avoid double taxation and potential compliance issues with banks.

Main Risk of Dual Tax Residency

When determining tax residency, tax authorities analyze not only the number of days spent in a country but also the totality of personal and economic ties of the taxpayer.

The following factors are typically considered:

• place of residence of the family;
• availability of permanent housing;
• jurisdiction where business management is carried out;
• where the main income is generated;
• bank accounts and economic connections;
• place of effective management of the company.

In this particular case, two different countries could simultaneously recognize the client as their tax resident.

This situation creates significant risks, including:

• double taxation of global income;
• compliance questions from banks;
• tax audits and potential additional tax assessments.

Without proper structuring, such situations often lead to complex cross-border tax disputes.

Structuring Tax Residency: Feod Group Solution

Our legal and tax team conducted a comprehensive analysis of the client’s international tax position and developed a strategy for structuring his Cyprus tax residency.

Within this case, we:

• analyzed the client’s global tax exposure and residency risks;
• identified the optimal jurisdiction for establishing tax residency;
• structured the client’s tax presence in Cyprus;
• organized proof of residence in Cyprus (rental agreement and utility bills);
• formalized the client’s director position in his Cyprus company;
• ensured the place of effective management of the company in Cyprus;
• prepared supporting documentation for tax authorities;
• assisted with obtaining Cyprus tax residency under the 60-day rule and the Tax Residency Certificate.

This approach allowed the client to establish a clear and defensible tax residency structure under international tax standards.

Result for the Client

As a result of our work:

• the client obtained official Cyprus tax resident status;
• the risk of dual tax residency and double taxation was minimized;
• banking compliance issues were successfully resolved.

The client now operates within a clear international tax structure recognized by financial institutions and tax authorities.

Tax Residency Consultation

If you:

• live between multiple countries
• run an international business
• manage companies across different jurisdictions

it is important to assess your tax residency position in advance and build an effective international tax structure.

Our team provides legal and tax advisory services on Cyprus tax residency, international tax structuring, and double taxation risk management.

Contact us for a consultation to evaluate your tax position and avoid potential tax risks.

Online consultations | Office in Larnaca