Business Relocation to Cyprus

The government of Cyprus has introduced new regulations aimed at making the country more appealing as an international high-growth business centre and tech-hub. These changes enable eligible companies in specific industries to establish their operations in Cyprus more easily, expand their activities in the country, and employ non-EU citizens.

The new regulations offer more favourable conditions for non-EU investors, and a dedicated infrastructure has been set up to streamline the registration process for eligible companies. This streamlined process ensures a smooth transition for companies relocating to Cyprus and reduces the bureaucratic hurdles they may face.

Family members of non-EU citizens who work for eligible companies can apply for residence permits in Cyprus through the family reunification process. This allows them to join their family members in Cyprus and enjoy the benefits of living in the country. Furthermore, spouses of non-EU citizens working for eligible companies have the right to free access to Cyprus’ labour market for remunerated employment, offering them increased opportunities for professional growth and development.

To be eligible to employ third-country nationals, a Cyprus company must meet at least one of the following criteria:

1. Cypriot pharmaceutical companies or Cypriot companies active in the fields of biogenetic and biotechnology.

2. Cypriot high-tech/innovation companies with a presence in the market and a high level of experimental R&D intensity, developing products related to aviation and space industry, computers, electronic and telecommunication products, pharmaceuticals, biomedical, research and development equipment, electrical machinery, chemicals, or non-electrical machinery.

3. Companies with the majority of shares owned by non-EU citizens. Where the percentage of foreign participation in the share capital of the company is equal to or below 50% of the total share capital, then the company is eligible if the foreign participation represents an amount of at least €200,000.

4. Cypriot shipping companies.

5. Public companies registered on any recognized global stock exchange.

Office Requirements

Eligible companies must operate from their own self-contained offices in Cyprus, located in suitable premises separate from any private housing or other offices, except in cases of business co-habitation.

Initial Investment Requirement

As of November 30, 2022, the company must also demonstrate an initial investment of at least €200,000. This sum must originate from a personal or other corporate account linked to the ultimate beneficial owner (UBO) of the company and be deposited into the company’s corporate account in Cyprus. The company must keep the invested funds in Cyprus and utilise them only for company-related activities.

Upon registering an eligible company, applications for work permits for highly skilled non-EU employees and their families can be submitted. Work permits are issued within one month from the date of submission of the completed application documents and are valid for three years.

Employment Quotas for Non-EU Citizens

Eligible foreign companies can hire a maximum of 70% non-EU citizens as their total number of employees. This limit must be achieved over a period of five years from the enactment of the new regulations (1/1/2022), with the first evaluation scheduled for 1/1/2027.

Requirements for High Skilled Employees

Employees of foreign interest companies are classified as “high skilled employees” and can apply for a residence permit for up to three years if they meet the following criteria:

1. They receive a minimum gross monthly salary of at least €2,500.
2. They hold a university diploma, degree, equivalent qualification, or have at least two years of relevant experience in a corresponding job.
3. They have an employment contract with a duration of not less than two years.

Family Reunification and Employment Rights

Family members of non-EU citizens working for eligible companies can apply for residence permits in Cyprus under the family reunification process. Spouses of non-EU citizens employed by eligible companies have unrestricted access to Cyprus’ labor market for paid employment.

Employment of Support Staff

Eligible companies can also employ third-country nationals as support staff (with a gross monthly salary of less than €2,500), provided that they do not exceed 30% of the total support staff. A duly validated employment contract between the third-country national and the employer must be in place, as approved by the competent authority.

Understanding the eligibility criteria for Cyprus companies seeking to employ third-country nationals is crucial for businesses looking to expand or relocate to Cyprus. Companies that meet the outlined criteria and requirements can benefit from a more favorable environment to employ talented professionals from third countries. By complying with these regulations and fulfilling the necessary requirements, Cyprus companies can successfully navigate the process of employing third-country nationals and contribute to the growth and development of their business in Cyprus.

Cyprus offers appealing tax exemptions for employees commencing their first-time employment in the country. These incentives are designed to attract highly skilled professionals and support the growth of the Cypriot economy. This article outlines the two primary tax exemptions available for employees in Cyprus and their eligibility criteria.

20% Tax Exemption

Employees who were not Cypriot residents for at least three consecutive years and were employed by a non-Cypriot resident employer before their employment in Cyprus can benefit from a 20% tax exemption on their remuneration. This exemption applies to a maximum of €8,550 per annum and can be claimed for seven years, irrespective of the tax residency status of the employee or the employer.

50% Tax Exemption

A 50% tax exemption is available for employees with an annual remuneration of at least €55,000, provided they were not Cypriot residents for ten consecutive years prior to their employment in Cyprus. This exemption can be claimed for 17 years. Employees who commenced their first-time employment before January 1, 2022, may also qualify for the 50% tax exemption, subject to certain eligibility criteria.

Our Law Firm is dedicated to providing comprehensive, tailored legal services to support companies throughout the relocation process to Cyprus. With a deep understanding of the local regulatory environment and a commitment to client satisfaction, our firm is well-positioned to help businesses successfully navigate the complexities of relocating to Cyprus. By choosing our Law Firm, clients can trust in our expertise and experience to guide them through every step of the process, ensuring a seamless transition and ongoing support for their business operations.