The Ministry of Finance has introduced new measures for attracting companies to initiate and expand their activities in Cyprus, as part of the Action Plan to enhance Head Quartering and foreign investment in the country, which shall come into force in early 2022.
Law implementations and further clarifications by the Government are expected soon.
The incentives vary and are as follows:
1.BUSINESS FACILITATION UNIT
- Transformation of the existing Fast Track Business Activation mechanism for International Companies into a Business Facilitation Unit, which provides a Central Business Contact Point with an immediacy in service.
- Digitalization of processes through an Online Platform.
2. NEW POLICY FOR THE EMPLOYMENT OF THIRD-COUNTRIES CITIZENS
Aims to simplify and speed up the process for granting work permits.
This benefits companies that are:
- Operating in Cyprus and are of foreign interest or Companies of foreign interest which intend to operate in Cyprus and maintain fully fledged offices in Cyprus
- Cypriot Shipping Companies
- Cypriot Companies involved in innovation and technology
- Cypriot pharmaceutical Companies or Cypriot Companies operating in the fields of biogenetics or biotechnology
Criteria for recruiting employees of third-countries:
- A minimum monthly gross Salary of €2500.
- Holders of a university degree or equivalent, or having a minimum 2 years’ experience in a corresponding employment position.
- Employment contract for a minimum of two years.
The maximum number of employees from third countries will consist of 70% of the total number of employees in the company over a period of 5 years, from the day of integration in the Fast Track Business Activation mechanism. (In case 5 years have passed and it is not possible to employ 30% of Cypriot staff, it will be re-examined on a case-by-case basis).
The work permits will be issued within 1 month from submission and will be valid for 3 years.
Can recruit supporting staff from third countries with a gross salary of less than €2.500, providing that supporting staff do not exceed 30% of all employees.
A work permit can be issued to the spouse/husband of the individual who secures a visa through this scheme and receives a minimum gross monthly salary of €2500.
3. DIGITAL NOMAD VISA
Benefits third-countries citizens that are self-employed/freelancers or employees working remotely for employers/customers that are located outside of Cyprus, for a 12-month period.
- Right to stay in the country for a period of 1 year with the option to renew for another 2 more years.
- Their family has the right to stay in Cyprus during that period without the right to work in the country.
- If the duration of their stay in Cyprus exceeds the period of 183 days, and if they are not tax residents of any other country, they will be considered as tax residents of Cyprus.
- A written declaration confirming that they will not provide work or services to local Cyprus Companies/ Employers.
- Employment contract and/or engagement letter with an overseas Company/physical person or any other proof of work for the duration of the period that the visa is granted.
- Proof that they have a minimum monthly income of €3.500. The amount is increased by 20% if they are married or have a partner, and by another 15% per each child.
- They must have Medical Insurance and a clean criminal record.
4. TAX INCENTIVES
- Extension of the existing tax exemption to cover new residents/employees with salary of €55.000 and above with a tax deduction of 50%.
- Current beneficiaries can extend their right from 10 to 17 years, while employees with a Salary of €55.000-€100.000 can benefit for 17 years.
- Increased discount on research and development costs. Eligible research and development costs will be deducted from entry tax for an amount equal to 120% of the actual tax.
5. EXCEPTIONAL CITIZENSHIP
Right to apply for citizenship after 5 years of legal residence and employment in Cyprus.
Further reduction to 4 years of legal residence and employment by holding a recognized certificate of knowledge of the Greek language.
6. SOCIAL INSURANCE
When third country citizens have paid social security contributions in Cyprus, they will be entitled to transfer these contributions to the country of their permanent residence.