New Government Incentives for Non-EU Citizens
The Government of Cyprus has introduced a new strategy for attracting foreign companies and skilled talent to Cyprus. The strategy mainly focuses on high technology, shipping, pharmaceutical, innovation, and research and development companies. This strategy included a series of new incentives concerning residency, taxation, and employment, through a fast, simple, and streamlined procedure. The Team of Law Office of George Stylianou provides fast and efficient services to foreign businesses wishing to set-up a presence in Cyprus or to expand their business activities. The team provides all necessary information and step-by-step guidance to companies and skilled talent wishing to explore the new incentives scheme.
The new Action Plan for attracting foreign businesses to establish or expand their activities in Cyprus, emphasized the Government’s hopes of making Cyprus a sustainable business and trade center of the broader region and Europe. More specifically, the new Action Plan has considered the best business practices from other major European countries.
The structure of the new Action Plan is mostly focused on sectors related to technology, shipping, innovation, research and development technology biogenetics and biotechnology without excluding any other companies that choose Cyprus as their place of business.
The list of new incentives includes:
- The setting up of a “Business Facilitation Unit” – The existing Fast Track Business Activation mechanism for companies of foreign interest shall be transformed into a new “Business Facilitation Unit” for foreign companies operating in Cyprus or for foreign companies that wish to expand their operations in Cyprus.
- A Revised Policy for Issuance of Residence and Employment Permits – Revision of the policy for the employment of highly skilled personnel from third countries which are employed by companies of foreign interests, as well as for those employed by Cypriot companies which give added value to the economy and the local workforce.
- Introduction of family reunification rights to third country nationals – family reunification rights are granted to third-country nationals employed by the above Revised Policy and regulated by the Business Facilitation Unit.
- Simplification of the process of granting work permits under CATEGORY E – Long Term Resident Status to persons who have been offered permanent employment and whose employment does not create undue local competition.
- The introduction of Digital Nomad Visa – Those entitled to such visas will be third country nationals who are either self-employed or are employees who work remotely using information and communication technologies to communicate with their clients or employers who must be outside Cyprus.
- The introduction of various new tax incentives – tax benefits and tax breaks for the new companies
- New Proposed Naturalisation Procedure – Proposal for the right to submit an application for naturalisation after 5 years of residency and employment in the Republic instead of the 7 years rule as applicable today or a further reduction to 4 years if the potential applicants meet the criteria of holding a recognised certificate of very good knowledge of the Greek language.
New Government Incentives for Non-EU Citizens
- Temporary work and residence permits of up to 3 years for Non-EU employees (renewable upon expiry)
- Possibility for support staff to relocate under certain conditions
- Simplification of the application process for permanent /long term residence for employment purposes
- Free access to the labor market for spouses of highly skilled NON-EU employees earning at least a gross salary of €2,500/month
- Digital nomad visa for Non-EU individuals for period of up to 3 years
- Tax exemption of 50% for new non domiciled employees with employment remuneration of (valid for 17 years)
- Companies of foreign interest operating in the republic of Cyprus
- Shipping companies
- High-tech / Innovation companies
- Pharmaceutical / biotechnology
- Public companies registered on any recognized stock exchange
Registration of Cyprus International Business Company
In simple terms, a Cyprus International Business Company (IBC) is a normal limited liability company which is used as a tool, legally, by corporations and individuals throughout the world to direct profits out of high tax countries into offshore jurisdictions or international financial centers thus taking advantage of low or zero tax and double tax treaties. The beneficial ownership and business activities of the Cyprus International Business Company lie inside and/or outside Cyprus.
New policy for the employment of Non-EU highly skilled nationals
- Foreign companies/undertakings operating in the Republic of Cyprus or
- Foreign companies/undertakings intending to operate in the Republic of Cyprus,
- Foreign companies that operate independent offices in Cyprus, housed in appropriate independent offices, separate from residences or other offices.
- Cypriot shipping companies Cypriot high-tech/ innovative companies
- Cypriot pharmaceutical companies or companies active in the sectors of biogenetics and biotechnology
- University diploma or degree or equivalent qualification or confirmation of relevant experience in a corresponding job of at least 2 years duration.
- Employment contract of not less than two years duration.
- Issuance of residence and employment permits Up to 2 years Minimum gross monthly salary of at least €2,500
Duration of residence and employment permits
Within 1 month Maximum number of non-EU nationals is set at 70% of all employees over a period of 5 years, from the date of joining the Business Facilitation Unit.
Re-assessment after 5 years, on a case by case basis, if criterion of 30% Cypriot employees is not met. Number of employees allowed
Employment of support staff
Employment of non-EU nationals is permitted, provided that it does not exceed 30% of all support staff and provided that the non-EU nationals and the employers have entered into an employment contract duly ratified by the competent authority in accordance with the existing applicable law. The salary level is determined on the basis of the existing applicable legislation. Duration of residence and employment permits Up to 3 years
Right to family reunification of non-EU nationals included in non-EU employment policy
Immediate and free access to the Labor market for spouses whose financial supporter has obtained a residence and work permit in the Republic, and who receive a minimum gross monthly salary of €2,500 (excluding support staff). Simplify and speed up the process of Granting Category E work permit (Long Term Resident Status)
Social Insurance Ministry of Finance Securing the right to a pension through the Social Insurance Fund by intensifying the efforts for concluding Bilateral Agreements with third countries by the Ministry of Labour and Social Insurance, so that when a third-country national who has paid social security contributions in Cyprus returns for permanent residence in his/her country, he/she will be able to transfer the contributions paid, on the condition that with these contributions he/she did not acquire any right to an old age pension, disability, etc. .
A Cyprus International Business Company enjoys substantial tax incentives:
-Flat rate of 12,5% tax on net profits
-Zero tax if management and control is outside Cyprus
-No withholding tax on payment of dividends, interest and royalties
-Dividend income received is wholly exempt from Cyprus tax
-Profits from sale of shares and other securities wholly exempt from Cyprus tax
-Interest received wholly exempt from Cyprus tax (unless it arises from the ordinary course of business)
-No capital gains tax on sale of immovable property situated overseas
– No exchange control restrictions
-Wide network of Double Tax Treaties to avoid double taxation