Business relocation to Cyprus

Business relocation to Cyprus

Business relocation to Cyprus

If you decide to start a business but cannot choose a jurisdiction, Cyprus is the best choice for you!

Cyprus offers many categories of entrepreneurial activities, including:

• Agriculture and Veterinary Medicine.
• Construction and engineering.
• Cross-border service provision.
• Education.
• Fireworks, pyrotechnics, explosives.
• Health and beauty.
• Communication with the media.
• Metrology.
• Professional services.
• Radio communication services.
• Tourism and rest.
• Transport and logistics.
• Wholesale and retail trade.

BUSINESS FACILITATION UNIT

• Transform the existing Fast-Track Business Activation Mechanism into a Business Facilitation Unit for companies operating or wishing to operate in Cyprus (MECI/MOI/DMRID)

The existing Fast-Track Business Activation Mechanism, which has been active for a year, on the basis of a Council of Ministers Decision, shows positive results. Given that through the implementation of the Strategy set out below, it will have an enhanced role and increased workload, as it will act as the central point of contact for all companies of international interest, either operating in Cyprus or wishing to operate, as well as Cypriot companies in specific areas of economic activity, it should optimize its operation, making greater use of technology.

EMPLOYMENT LICENSES FOR STAFF FROM THIRD COUNTRIES EMPLOYED BY FOREIGN COMPANIES (MECI/MLSI/MOI)

• Review of the existing policy for employment of staff from third countries, employed by companies / enterprises of foreign interests (concerns companies / enterprises that will join the Business Facilitation Unit)

Eligible companies:

• Foreign companies / undertakings operating in the Republic of Cyprus or foreign companies / undertakings intending to operate in the Republic of Cyprus and operating independent offices in Cyprus, housed in appropriate premises, separate from any private residence or other office
• Cypriot shipping companies
• Cypriot high technology / innovation companies,
• Cypriot pharmaceutical companies or Cypriot companies active in the sectors of biogenetics and biotechnology.

Employment of third-country highly skilled nationals provided that:

• they will be paid a minimum gross monthly salary of € 2,500
• they will hold a university degree or diploma or equivalent qualification or confirmation of relevant experience in a corresponding employment position of at least 2 years duration.
• submit an employment contract of not less than two years.
• The maximum number of third-country nationals that can be employed is set at 70% of all employees over a period of 5 years, from the date of joining the Business Facilitation Unit. After the lapse of 5 years if it is not possible to employ 30% of Cypriot workers, the matter will be re-examined on a case-by-case basis

Employment of third country nationals support staff (with a gross monthly salary of less than € 2500), is permitted provided that it does not exceed 30% of the total support staff and provided that there is an employment contract between the third-country national and the employer which is duly validated by the competent authority in accordance with current legislation.

• Their salary is determined by the current legislation.
• Note that the Companies/undertakings in order to obtain the relevant staff permits for third country nationals

The licenses will be issued within 1 month for a period of up to 3 years. Note: Gradually and 6 months after the implementation of the new policy for employment of staff from third countries in international companies operating in Cyprus, and having collected data on the number of companies that will be served and the number of licenses that will be issued, the possibility of creating a One-Stop Service will be examined both for the provision of information / support to the companies, but also for the receipt of applications and relevant licenses. The One-Stop Services will be provided through the Business Facilitation Unit (they will be co-located) and can be housed either inside a Citizens Services Centre or in another building that will be found for this purpose.

• Right for Family reunification of third-country nationals working for companies joining the Business Facilitation Unit (MOI/MLSI)

Immediate and free access to the labour market, with remunerated employment for spouses whose family member has obtained a residence and work permit in the Republic, and who receive a minimum gross monthly salary of € 2,500 (excluding support staff).

A stamped Contract from the Department of Labour will not be required; the terms of the permit will fulfill the terms and conditions of the regarding the issuance of a single permit, such as: a) Valid passport for at least 2 years (b) legal residence in the Republic (c) An employment contract duly ratified where required (d) qualifications to practice the profession (e) suitable accommodation (f) Health Insurance (g) does not pose a threat to law and order or public security (clear criminal record certificate) (h) does not pose a threat to public health (medical tests) (j) a personal declaration undertaking responsibility for the costs of repatriation

• Simplification and speeding up of the procedure for granting work permits (Category E) (MOI/MLSI)

Today the procedure is time consuming. The Ministry of Interior is already working on an amendment to the “Aliens and Immigration” Law to simplify the procedure and determine the criteria on the basis of which the permits will be granted.

TAX INCENTIVES

Extension and expansion of tax exemption for investment in innovative companies

Extend by 31/12/2023 the existing regime of 50% exemption for investments in an approved innovative company by an individual directly or through an investment fund or through an alternative trading platform. The existing regime was terminated on 30/6/2021. Examination of the possibility to expand further the tax exemption to corporate investors.

The tax bill for the extension will be summitted for approval to the Council of Ministers and thereafter to the House of Representatives for discussion and enactment. The opinion of Directorate-General for Competition (DG COMP) is pending. Once the relevant approval is received, a bill amending the Income Tax Law will be submitted to the Legal Service for legal vetting and subsequently to the House of Representatives for discussion and enactment.

Expand the existing tax benefit applicable to non domicile employees

Expand the existing tax exemption of 50% for 10 years from the year of employment, to cover new entrance in the Republic who are non-domicile employees with income from employment of €55,000 and above. Existing non domicile employees (that are in Cyprus), with income above €100K, have the opportunity to take advantage of the tax benefit for an extended period of 17 years. For existing beneficiaries with income between €55K and €100 K, the tax benefit will be provided for 10 years, from the year of employment in Cyprus.

Incremental (compared to the actual) tax deduction for research and development expenditure (MOF)

Incremental tax allowance on research and development expenditure (e.g., by 20%). Eligible research and development expenditure will be deducted from taxable income at 120% of the actual expenditure.

Consultation with DG Competition whether this provision is state aid compatible.

Preparation of a relevant amending bill (of the Income Tax Law) , consultation with the relevant stakeholders, and thereafter submitted to the Legal Service for legal vetting.

NATURALIZATION (MOI)

Right to submit an application for naturalization after 5 years of residence and work in the Republic or after 4 years if they fulfill the criteria for holding a recognised certificate of Success in very good knowledge of Greek language

– Political decision for the examination of applications as a priority, after completing 7 years of residence and work in the Republic (immediate implementation)

– Amendment of the Aliens and Immigration Law so as to reduce the required years from 7 to 5 and under certain conditions to 4.

–  In addition, examination of the possibility to introduce provisions in the amending so that when someone is out of Cyprus for work purposes, this should be taken into account in the calculation of the time spent in the Republic.

SOCIAL INSURANCE

Securing the right to social security

Securing the transfer of social insurance contributions, by intensifying the efforts for concluding Bilateral Agreements with third countries that will be determined by the Ministry of Labour and Social Insurance, so that when a third country national who has paid social security contributions in Cyprus, returns to his/her country for permanent residence, he/she will be allowed to transfer the contributions paid, on the condition that with these contributions he/she did not acquire any right to a pension for old age, disability, etc

We draw your attention to the fact that this article is for informational purposes only. For more advice, contact us at the contacts listed on the site.