Doing Business in Cyprus

The Cypriot government has released its new strategy action plan for attracting international businesses to Cyprus. The emphasis is on technology, shipping, innovation and research & development. Implementation will start in 2022. The Ecovis experts explain the most important measures.

Transformation of the existing Fast Track Business Activation Mechanism into a Business Facilitation Unit (BFU)

The BFU shall be the central point of contact offering services in relation to the establishment and operation of businesses such as company incorporation or registration with the social insurance and the tax departments for direct and indirect tax. It will also facilitate the issuing of residence and employment permits in Cyprus.

New policy for residence and employment permits for staff from third countries employed by foreign and Cypriot businesses

This applies to foreign companies operating in Cyprus or wishing to establish a physical presence in Cyprus, as well as Cypriot shipping, technology/innovation, pharmaceutical and biogenetics/biotechnology companies.

Main provisions:

• Minimum gross monthly salary of EUR 2,500 (with relevant academic skills, or at least two years of relevant experience).
• Right to employ support staff (gross monthly salary can be below EUR 2,500 and maximum 30% of total support staff number).
• Residence and work permit duration up to three years, to be issued one month from application.
• Maximum number of staff from third countries can be 70% of the total number of employees in a 5-year period from the date of registration with the BFU.

nternational companies wanting to invest in Cyprus or expand their business can expect advantages in some sectors from 2022.

Andreas Karaolis, FCCA, Managing Director, ECOVIS Karaolis Assurance Limited, Nicosia, Cyprus

Right to employment for family members of third country nationals with residence and employment permits

Where the gross monthly salary is at least EUR 2,500, spouses shall have the right of employment in Cyprus. This is not applicable for support staff.

Simplification of the process for granting work permits

The relevant regulations of the Aliens and Migration Law shall be amended to simplify the process.

Digital nomad visa – third country individuals working remotely from Cyprus

A new type of residence permit will be introduced for individuals from third countries who wish to live in Cyprus but work remotely for businesses operating abroad. Self-employed individuals will also be eligible.

Main provisions:

• Right to live and work from Cyprus for up to one year, with the right to renew for another two years.
• Right of family members to live, but not work, in Cyprus.

Main prerequisites:

• Minimum incoming funds from abroad to Cyprus EUR 3,500 per month (evidenced by salary advice, bank statements etc.) increased by 20% for the spouse and by 15% per minor.
• Must have medical insurance cover.
• Must have a clean criminal record.

Tax incentives

• Expansion of the existing income tax exemption of 50% for taking up employment in Cyprus to include annual salaried income of at least EUR 55,000 (currently EUR 100,000).
• Extension of the tax exemption for investments in innovative companies (50% of the cost for investments in certified innovative companies for corporate investors).
• Increased tax deductions for research & development (R&D) expenses.

Cypriot citizenship

The period of eligibility for applying for citizenship will be reduced from 7 years of work and residence in Cyprus to 5 years (or 4 years with very good knowledge of the Greek language).

For further information please contact:

Andreas Karaolis, FCCA, Managing Director, ECOVIS Karaolis Assurance Limited, Nicosia, Cyprus
Email: andreas.karaolis@ecovis.com.cy