Cyprus registered companies can employ third country (non-EU) nationals to work and live in Cyprus, under a fast-track scheme, if certain basic requirements are met.
The new “Cyprus Foreign Interest Companies” scheme adopted by the Cyprus Government, under which Cypriot registered companies owned by foreign shareholders, may employ in Cyprus third country (non-EU) employees, in combination with other attractive features of the Cyprus business framework, such as the English-based legal system and attractive tax regime, renders Cyprus an ideal location for setting-up a business base and the Cyprus company an excellent vehicle to manage a business and to hold investments both in Cyprus and abroad.
In this article, we set out information how it can be utilised.
The following entities are eligible to implement the new scheme:
- Cyprus private companies which are owned (over 50% of the share capital) by foreign third country (non-EU) shareholders. There is no minimum capital requirement.
- Public companies registered on any recognised Stock Exchange.
- Companies which were previously registered with the Central Bank as “offshore” entities.
- Cypriot Shipping companies.
- Cypriot High-Tech/Innovation companies.
- Cypriot Pharmaceutical companies or Cypriot companies active in the fields of Biogenetics and Biotechnology.
- Companies which belong by majority to persons who have obtained Cypriot citizenship based on economic criteria.
- Cyprus private companies which have as minority shareholders foreign third country (non-EU) persons if the foreign participation represents an amount of at least €200.000.
Office in Cyprus
Eligible entities must operate from independent offices in Cyprus, in suitable premises, separate from any private housing or other office, except in the case of business co-habitation.
Employment and residency of third country nationals
Companies which satisfy the above criteria and are registered as a “foreign interest companies” are entitled to apply for the grant under a fast-track procedure, of work and residency permits to their third country national employees.
The main requirements are the following:
- Minimum gross salary of employee must be €2.500 per month.
- The employee must hold of a university degree or diploma or confirmation of relevant experience in a corresponding employment position for at least 2 years duration.
- The employment contract should be for a minimum period of 2 years.
Work permits are issued within one month from the date of the application submission and can be valid for a period of up to 3 years.
Ratio of EU and third country national employees
A maximum number of third country nationals is set at 70% of the total number employees over a period of 5 years from the date of the company registering as a “foreign interest company” (i.e. the said ration must be achieved within the said 5 years’ period). Re-assessment will be done by Business Facilitation Unit after 5 years on a case by case basis if the criterion of 30% Cypriot employees is not met.
The spouses of highly skilled personnel have an immediate and free access to the labour market once the financial supporter (i.e the employee) has obtained his/her work permit in Cyprus. This option is not available for spouses of support staff.
- Attractive Corporate Tax Regime. Corporate income tax rate of 12.5%. Profits generated from the sale of shares are exempt from corporate income tax. No withholding or other tax on dividends distributed to non-Cyprus tax residents.
- Permanent Residency by Investment. Fast-track scheme, under which an applicant by investing €300.000 (plus VAT) in eligible property in Cyprus can, within a period of about two (2) months, obtain a permanent Cyprus residence permit. The permit can be granted to the applicant and his/her spouse, their “dependents” and parents, valid for their entire lifetime.
- Non-Dom Tax Regime. Persons who spend during a tax year at least 60 days in Cyprus, pursue any “business” in Cyprus and/or work in Cyprus and maintain a permanent residence in Cyprus (provided they do not spend more than 183 days in any other country during the tax year) are considered as a “non-domiciled” Cyprus tax residents and can enjoy, for at least 17 years, as things currently stand, a full exemption from tax on their worldwide dividend and interest income, and furthermore, a permanent exemption from tax on any gains generated from the disposal of securities, subject to conditions.
How we can assist
LLPO Law Firm, is a trusted leader in providing corporate services. Its dedicated and experienced team can provide A-Z solutions. We can assist with setting up and running your Cyprus base, handle the necessary registrations, provide advice and guidance and draft or review relevant documentation.
The content of this article cannot be considered as a legal advice. For any further information or advice on the particular matter, we strongly recommend that you contact us to be guided accordingly.