Cyprus strategy as a center of business and trade
The Cypriot government has recently presented a new strategic plan (hereinafter – the Plan) to attract investors and companies to the country. This plan pays special attention to high technology, shipping, innovation, research and development, biogenetics and biotechnological research. The plan is in line with the guidelines of the European Commission and the Recovery and Resilience Fund and will be implemented in January 2022.
In this article, we will look at the key points of the Plan.
Establishment of a Business Promotion Unit
This unit will be the main point of contact for all foreign companies in Cyprus or for those wishing to relocate to Cyprus. The focus will be on businesses operating in the following areas:
- High technology or innovation.
- Pharmaceutical industry.
- Biogenetics and/or biotechnology.
The department will assist with:
- Establishment of a Cyprus company.
- Registration of VAT and income tax.
- Social insurance registrations.
- Issuance of work and residence permits.
Changes in the employment policy of third-country nationals
Applicable to employees of foreign companies operating in Cyprus or foreign companies wishing to establish a presence in Cyprus.
Issuance of permits for temporary residence and employment in Cyprus.
- Applies to third-country nationals with a minimum gross salary of €2,500 per month, provided they hold a university degree or title or equivalent qualification, or at least two years of relevant experience. An employment contract of at least two years is also required.
Employment of support staff (with a gross salary of less than 2,500 euros per month).
- Companies will be able to hire third-country nationals as support staff (with a gross salary of less than 2,500 euros per month), provided that third-country nationals do not exceed 30% of all support staff.
Validity of residence permit and work permit.
- The residence permit and work permit will be issued within one month from the date of application and will be valid for up to three years.
Application for family reunification for third-country nationals who are part of the employment policy of third countries.
- Immediate and free access to the labor market for spouses whose partner has obtained a residence and work permit and who earns at least EUR 2,500 gross per month (excluding support staff)
Implementation of a visa for digital nomads
In an effort to attract digital nomads, the new visa will be offered to a maximum of 100 third party nationals who are employed by non-Cypriot companies, are self-employed or work remotely and who also meet certain eligibility criteria. Qualified personnel will be able to reside in Cyprus for up to one year with the right to extend the visa for another two years. They will also be allowed to bring their families to Cyprus.
Extension of the tax exemption applicable to employees in Cyprus.
- Income tax exemption of 50% for new residents and employees with an income of at least 55,000 euros with the possibility of extending the benefit from 10 to 17 years; potential beneficiaries are persons with an income between 55,000 and 100,000 euros for the remaining 17 years.
Extension of the validity of tax incentives for investments in innovative companies.
- The 50% tax exemption for investments in certified innovative companies also applies to corporate investors.
Tax incentives for research and development expenses.
- Eligible research and development expenses will be deductible from taxable income up to 120% of actual business income.
Workers who are third-country nationals will be eligible to apply for naturalization after five years of living and working in Cyprus, or after four years if they hold a recognized Greek language proficiency certificate. The transfer of social security contributions will also be ensured by stepping up efforts to conclude bilateral agreements with third countries.
Please note that this article is for informational purposes only. For further advice, please contact us at the contacts listed on the site.