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Employment To Companies Of Foreign Interests in Cyprus

Employment To Companies Of Foreign Interests in Cyprus Hadjivangeli Advocate Cyprus

Employment To Companies Of Foreign Interests in Cyprus

The Council of Ministers, with its Decision of 7.10.2020, reviewed the policy regarding the issuance of temporary residence and employment permits to employees of existing of existing and new companies of foreign interests registered in the Republic, as well as companies that have joined the Fast Track Business Activation Mechanism.

Policy
For the employment of a third country national in the Republic a temporary residence and employment permit is necessary, according to the Aliens and Immigration Law – Cap. 105 as amended until today.
The Council of Ministers, with its Decision of 7.10.2020, reviewed the policy regarding the issuance of temporary residence and employment permits to employees of existing and new companies of foreign interest registered in the Republic, as well as companies that have joined the Fast Track Business Activation Mechanism. The Decision replaces the previous relevant Decisions of the Council of Ministers and specifically those dated 29.11. 2006, 24.9.2008 and 24.4.2013.
A key pillar of the review is the provision of the possibility of employing a higher number of third country nationals of specific professions and/or skills, for which there is a significant shortage of supply at national level, without a prior labor market test and taking into account the companies’ annual turnover.
The Decision of the Council of Ministers sets out the criteria that companies must meet in order to benefit from this policy, the categories of staff and the maximum numbers of third country nationals who can be employed per category. There are described in the following paragraphs.

Eligible Companies – Criterion 1:
Third country shareholders should own the majority of the company’s shares. The following cases are excluded:

  • Public companies registered in any recognized stock exchange.
  • Former offshore companies that were operating in Cyprus by approval of the Cyprus Central Bank, before the change of their offshore status.
  • Cypriot shipping companies.
  • Cypriot companies of high technology/innovation, that will be certified by the Deputy Ministry of Research, Innovation and Digital Policy based on the applicable framework.
  • Cypriot pharmaceutical companies or companies operating in the fields of biogenetics and biotechnology.
  • Persons who have acquired Cypriot citizenship by naturalization based on economic criteria, given that they will prove that the conditions under which they were naturalized are still met.

In the case where companies are the shareholders, their final owners (natural persons who are the ultimate beneficial owners) should be declared, in order to receive the approval of the Civil Registry and Migration Department.

Criterion 2:
The ultimate beneficial owner must invest at least €200.000 in Cyprus, for the purposes of operating the company. This requirement only applies to companies which will employ staff from third countries
for the first time.
In case the percentage of foreign participation in the share capital of the Company is equal to or below 50% of the total share capital, in order for the Company to be considered eligible, this percentage must represent an amount equal to or greater than the amount of €200.000.

Criterion 3:
The establishment/ operation of independent offices in Cyprus, in suitable premises, separate from any private housing or other office, except in the case of business co-habitation.

Staff Categories
Companies that meet the above conditions, are entitled to employ third country nationals in the following categories, provided that they first obtain temporary residence and employment permits.

Category 1 – Directors:
In this category, the following third-country nationals are included:

  • Directors or Partners registered in the Registrar of Companies and Official Receiver
  • General Managers of branches and of mother companies of alien companies
  • Departmental Managers
  • Project Managers

The minimum acceptable gross monthly salary for Directors is €4,000, an amount that may be adjusted from time to time, depending on fluctuations in the wage index.

Category 2 – Middle management executives and other key personnel:
In this category the following third country nationals are included:

  • Upper / Middle management personnel
  • Other administrative, secretarial or technical staff

The minimum acceptable gross monthly salary for this category is €2,000. Amounts may be adjusted from time to time, depending on wage index fluctuations.

Category 3 – Specialists:

1. Software and System Engineers
2. Application and Data Architects
3. Information and Communication Technology and Enterprise Solution Architects
4. Technical Assurance Professionals
5. Telecom and Space Engineers
6. Data scientists
7. Machine Learning Engineers
8. Web Developers and designers
9. UX User Experience Professionals
10. Quantitative Analysts
11. Quality Assurance Analysts
12. Mobile Application Developers
13. Augmented Reality/ Virtual Reality Programmers
14. Digital Marketing Specialists
15. Video Production Multimedia Specialists for Mobile Apps and Software
16. Analysts for Mobile Apps and Software
17. Designers of Prototype for Mobile Devices
18. DevOps Engineers
19. Cyber Security Specialists
20. Artificial Intelligence, Robotics and Big Data Specialists
21. Pharmaceutical Formulation Technologists
22. Pharmaceutical Engineer Validation Specialists
23. Pharmaceutical Patents Specialists
24. Pharmaceutical Regulatory and Quality Assurance Professionals
25. Marine Engineers
26. Naval Architects

The minimum acceptable gross monthly earnings for Specialists is €2,000, an amount that can be adjusted from time to time, depending on fluctuations in the wage index.
Companies already registered in the Register of Foreign Companies of the Civil Registry and Migration Department can automatically benefit from the Policy for employment of third country nationals in the Specialists’ category.

Category 4 – Support Staff:
All third country nationals not included in the above categories. Companies are expected to fill in positions in this category with Cypriot or European citizens. In the case where there are no qualified Cypriots or European citizens available, a company may employ third country nationals in posts in this category at a rate of 30% of the total staff.
For this category, the General Employment procedure is followed, by submitting the certificates/supporting documents described in the relevant list of accompanying documents, after securing the positive recommendation (sealed employment contract) of the Department of Labor, which, for the granting of its positive recommendation, considers the above percentage.
The market test is not necessary for third country nationals with free access to the labor market.

Maximum number of third country employees per staff category

  1. Directors: 5
  2. Middle management executives and other key personnel: 10
  3. Specialists Based on annual turnover*

≤1 million: 5
>€1-€3 millions: 10
>€3-€5 millions: 20
>€5-€10 millions: 30
>€10-€20 millions: 50
>€20-€30 millions: 100
>€30 millions: 200

4. Support Staff: 30% of the total staff (will be reviewed by the Department of Labor during the labor market test).

For employing a greater number of third country personnel under the above categories, duly justified and documented requests by the company must be submitted to the Department. The requests must include information on the salary offered as well as:

  • The company’s turnover
  • The ration of third country employees to Cypriots/ EU Nationals
  • The company’s operating time in Cyprus

In order to exceed the limit of more than 300 third country nationals employed in categories 1-3 above, the consent of the Council of Ministers is required.
It is stressed that the requests should only concern specific persons whose employment is considered necessary by the company. General requests on the matter cannot be considered.

Conditions of third country nationals
A third country national must fulfil the conditions laid down by the Aliens and Immigration Law – Cap. 105 as amended until today.

Entering the Republic of Cyprus
Third country nationals falling under staff categories 1-3, can enter the Republic for the purpose of employment at company of foreign interests either by obtaining:

  • An entry permit from the Civil Registry and Migration Department
  • A visa from the Consular Authorities of the Republic abroad.

For third country nationals falling under staff category 4, entry is only allowed through an
entry permit.

Required Actions After Arrival
Within seven (7) days after the arrival of the third country national in Cyprus, he/she must apply to the Civil Registry and Migration Department, to register in the Aliens’ Register, according to the Aliens and Immigration Regulations as amended to date.
Moreover, he/she must, within the aforementioned period, apply to the Department for a temporary residence and employment permit, according to the legislation in force.

Validity of Temporary Residence and Employment Permit
Where the conditions foreseen in the law are met, the third country national is granted a temporary residence and employment permit. The validity of the permit depends on the duration of the employment contract and can be up to two (2) years, with a right of renewal.
Directors, Middle management executives and other key personnel as well as Specialists (Staff Categories 1-3) may reside in the Republic without a time limit, provided they hold a valid temporary residence and employment permit.

Change of Employer in Cyprus
Employees at a company of foreign interests can change employer and work in a different
company of foreign interests, regardless of their duration of stay in Cyprus, provided that:

  • They have found employment within one (1) month from the termination of their previous employment.
  • The general conditions laid down by the legislation in force, regarding employment of third country nationals, are met.
  • The company of foreign interests that will employ them is a beneficiary company, based on the criteria set out by the Council of Ministers.

Employees that which to change employer and work for an employer who is not a company of foreign interests are allowed to do so, provided that maximum stay in the Republic for purposes of general employment has not been reached.

Family Members
Third country nationals with residence and employment permits under staff categories 1-3 of the Policy, have direct access to family reunification with their family members (spouse and minor children), provided that the relevant conditions of the Aliens and Immigration Law, Cap. 105 as amended are met.
In such cases, third country nationals who are family members (spouse and minor children) can enter and reside in Cyprus after the sponsor has followed the procedure for family reunification.
For family members (spouse and dependent children) who temporarily do not qualify for family reunification (e.g. because of the duration of the passport or the duration of the marriage), temporary residence permits of Dependent Visitor may be issued.

These family members can enter via a visa and then apply to the Department for obtaining a temporary residence permit.

The information provided in this letter does not, and is not intended to, constitute legal advice; instead, all information, content, and materials are for general informational purposes only.

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