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The government has announced its new action plan for attracting foreign businesses to establish or expand their activities in Cyprus.
The announcement came a year after the abolition of the previous investment program in the wake of adverse publicity that put Cyprus in the spotlight for the way it granted citizenship.
The new strategy, to be implemented from January 1, 2022, aims to attract foreign businesses and stimulate economic activity by promoting foreign investment.
The Business Facilitation Unit
The new policy aims to facilitate the establishment of foreign companies to operate and/or expand their activities in Cyprus.
The existing Fast Track Business Activation mechanism for Companies of Foreign Interest shall be transformed into a “Business Facilitation Unit” for foreign companies operating in Cyprus or those wishing to expand their operations to Cyprus.
The Unit shall be responsible for providing the various services required for the establishment of corporate entities.
It will oversee company registration, name approval, registration with the social insurance, VAT registry, and the income tax authorities.
It will also guide the establishment, licensing, and operations of such companies.
In addition, it shall facilitate the issuance and renewal of residence and employment permits for employees working in companies of foreign interests.
Residence and Employment Permits
The government has revised the policy for the employment of staff from third countries employed by companies of foreign interests and those employed by Cypriot companies, which add value to the economy.
Companies that can benefit from this revised policy are:
- Companies and businesses of foreign interests operating in Cyprus or companies of foreign interests wishing to establish operations on the island with a physical presence, and which operate or shall operate from independent offices on the island and are or will be housed in suitable premises, separate from any private residence ·
- Cypriot shipping companies·
- Cypriot high technology/innovation companies, Cypriot pharmaceutical companies, or Cypriot companies active in biogenetics and biotechnology.
Eligible companies can employ third-country nationals in key positions who have a university degree or title or equivalent qualification or a certificate of relevant experience in a corresponding employment position for at least two years with a minimum gross monthly salary of €2500 provided their employment contract is for not less than two years.
There is a maximum number of third-country nationals that may be employed under this policy.
Only 70% of all employees may be employed under it for five years, from the date of joining the Business Facilitation Unit.
If five years have passed and it is impossible to employ 30% of Cypriot workers, it will be re-examined on a case-by-case basis. The relevant work permits for employees under this revised policy will be issued immediately within one month and last up to 3 years.
Eligible companies will be allowed to employ third-country nationals as support staff with a gross monthly salary of less than €2500.
The employment of third-country nationals as support staff is allowed, provided it does not exceed 30% of the support staff and provided third-country nationals and the employers have entered into an employment contract approved by the relevant authority.
The amount of their salary is determined by the current legislation. Their work permits will last up to 3 years.
Family reunification rights
Family reunification rights are granted to third-country nationals employed by this revised policy and regulated by the Business Facilitation Unit.
Through this revised policy, direct and free access to the labor market as paid employees is granted to spouses of the third-country nationals who obtained a residence and work permit in the Republic and who receive a minimum gross monthly salary of €2500.
This right does not extend to supporting staff who receive a monthly salary of less than €2500.
The action plan provides for the simplification and acceleration of granting immigration and work permits under Category E to persons offered permanent employment in the Republic, not creating undue local competition.