Answer ... On 2 February 2022, a new regime for foreign businesses that wish to operate and expand their activities in Cyprus entered into force.
The newly established Business Facilitation Unit (BFU) should prove a real gamechanger for foreign companies seeking to incorporate in Cyprus, enabling them to complete almost all steps involved in this process through a single governmental unit.
The advantages of the new scheme include the following.
Single point of contact. At the BFU, a company can register with numerous government bodies through a single point of contact, including:
- the Registrar of Companies;
- the Social Insurance Services;
- the tax authorities; and
- the Civil Registry and Migration Department.
Lower barriers to entry: A company is eligible to register under the scheme if the following criteria are met:
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At least 50% of its shares are owned by third-country nationals. Exceptions apply to:
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- companies on listed a recognised stock exchange;
- Cypriot pharmaceutical companies;
- Cypriot shipping companies;
- former offshore companies;
- companies whose ultimate beneficial owners have acquired Cypriot citizenship by investment; and
- Cypriot high-technology/innovation companies where the percentage of foreign participation in the share capital is equal to or below 50% of the total share capital, provided that this percentage represents a value of at least €200,000; and
- It operates from independent offices in suitable premises.
Unlimited number of third-country national employee: Under the previous scheme, foreign entities could submit applications through the fast-track procedure only for:
- five directors with a monthly salary of at least €4,000; and
- 10 key personnel with a monthly salary of at least €2,000.
Under the new scheme, there are no such limits, regardless of category (director or key personnel). The only requirement is that in five years’ time, the company must be able to prove that 30% of its total workforce is comprised of EU nationals. If that is not the case, the government will examine the composition of its workforce on a case-by-case basis. Additionally, the following requirements must be met in relation to the personnel:
- a minimum gross monthly salary of €2,500;
- a university degree or diploma or equivalent qualification, or credentials confirming relevant experience in a corresponding position for at least two years; and
- the existence of an employment contract for not less than two years.
Duration of temporary residence permits: The maximum duration of temporary residence/work permits has been increased from two to three years.
Free access to the labour market for eligible employees’ spouses: Under the previous scheme, family reunification was available for the immediate family of employees of companies with foreign interests (IBC companies) as soon as their permit was issued. Their spouses were also allowed to take up employment with eligible employers – that is, other registered IBC companies or companies with Labour Department approval to employ third-country nationals – under a stamped employment contract, which evidently involved a very lengthy process. Under the new scheme, once they have been registered as the dependant of an IBC employee, spouses and their legal equivalents can enjoy free access to employment in Cyprus with any employer they see fit, as long as they fulfil the requirements for the relevant position.
An easier path to citizenship by naturalisation: Under the new scheme, a more favourable process for citizenship through naturalisation has been introduced and the government is in the process of amending the relevant law to bring this into full effect.
Digital Nomad Visa: A second scheme available is the Digital Nomad Visa for people who wish to live in Cyprus but work remotely for companies operating abroad. The visa is granted for a period of 12 months, with the right to renew for a further two years. Beneficiaries should have a salary of at least €3,500 per month, medical cover and a clean criminal record.