The Council of Ministers, having the intention and the ultimate goal of attracting international investment and talent in the Republic of Cyprus, approved the “Strategy for Attracting Businesses for Activities or/and Expansion of their Activities in Cyprus”, on the 15th of October 2021. As part of this program, the Decision entered into force on the 12th of December 2022.
The main purpose of BFU is the provision of faster and more efficient processing of requests applied by foreign companies for the establishment of a Cyprus Company or the expansion of activities of existing companies
I. Services provided by the Unit:
A) The unit acts as the single point of contact and provides the ability to new entities to complete all registrations for their establishment. The setting up of a business includes the below:
• Approval of company name and registration (in collaboration with the Department of Registrar of Companies and Intellectual Property)
• Registration in the Employers’ Register (Social Insurance Services)
• Entry in the Tax Register for Indirect Taxation (VAT) and Direct Taxation (Tax Department)
B) The unit provides guidance throughout the necessary licensing or permits for the activation and establishment of any type of business in Cyprus. The unit also provides instructions such as developing a business plan, the registration of the trademark of the business, and many other related issues.
C) Furthermore, the unit provides support regarding the review and application for new or existing foreign interest companies which wish to employ third-country nationals. Submissions and issuance of residence and employment permits will take place at a new separate area of the Civil Registry and Migration Department (CRMD), aiming at the establishment of a faster and more direct procedure. As soon as the company is registered with the BFU, a written confirmation will be given whereby companies can contact the CRMD for the residence and employment of their third-country personnel.
II. Eligible Businesses:
A) All foreign interest companies in which third-country nationals own the majority of the company’s shares.
Note: the term “third country nationals” also include third country nationals who have acquired Cypriot citizenship by naturalization based on economic criteria. One of the most important alterations of the new criteria is that the requirement for the company to present € 200.000 as nominal capital has been abolished. Only in cases where the percentage of foreign participation in the company’s share capital is equal to or less than 50% of the total share capital the foreign participation should represent an amount equal to or greater than the amount of € 200.000 as nominal capital.
B) Cypriot high-tech / innovative companies which can prove the following:
• it is already established and has a presence in the market, and
• it has a high level or experimental Research and development intensity, and
• it developed product/s that fall into one of the following categories: products related to aviation and space industry, computers, electronic and telecommunication products, pharmaceuticals, biomedical, research and development equipment, electrical machinery, chemicals, non-electrical machinery.
C) Cypriot pharmaceutical companies or companies active in the sectors of biogenetics and biotechnology
D) Public companies registered on any recognised stock exchange.
E) Cypriot shipping companies
F) Companies of international activities (formerly offshore), which operated before the change of regime, whose data are held by the Central Bank.
An important note is that for all categories mentioned above the company must provide evidence of carrying out its business and/or activities in independent offices in Cyprus, housed in appropriate premises, separate from any private residence or other offices.
III. Work Permit for Third-Country Nationals
The above new program has also introduced a new criteria regarding the employees of foreign interest companies. As of January 2022, there is no further categorization of the personnel of the company. Employees of foreign interest companies are now titled “high skilled employees” and they can apply for residence permit for up to 3 years given that:
• Their minimum gross monthly salary will be at least € 2.500
• They hold a university diploma or degree or equivalent qualification or confirmation of relevant experience in a corresponding job of at least 2 years duration
• They have an employment contract in place of not less than 2 years duration
It is noted that during the period of 5 years, from the date of joining the unit, the maximum number of third country nationals that can be employed in a foreign interest company is set at 70% of all employees. When the aforementioned period comes to an end, in cases where it is impractical to employ 30% of Cypriot workers the matter will be examined on a case-by-case basis. In addition, the company can also employ third country nationals as support staff (with a gross monthly salary of less than €2500), given that the percentage of this staff will not exceed 30% of the total support staff.
Moreover, the current legislation for family reunification is still in force and can be applied to any third country national who has obtained a temporary residence permit in accordance with the above criteria.
If any assistance or further clarifications are needed for this matter, please do not hesitate to contact our office.
For further information or clarifications, please contact S. Constantinou & Associates LLC at [email protected] / +357 22 421190