New Strategy for attracting business and talent in Cyprus.
Introduction
Ministry of Finance of the Republic of Cyprus, has announced a new strategy for attracting business and talent starting from January 2022. The strategy involves enhancement of already existing programs, as well as introduction of new incentives for businesses already operating or planning to operate in Cyprus.
Bisiness Facilitation Unit.
As of January 2022, the existing Fast Track Business Activation Mechanism, will be transformed into Business Facilitation Unit (BFU), which will be a central digitalised online platform and a contact point for all businesses in Cyprus that will have an enhanced role in provision of the below services:
a) Provision of information regarding all steps necessary for the registration of the company in:
i) Registrar of Companies of the Republic;
ii) Social Insurance Register;
iii) Registration in the TAX/VAT Register;
b) Provision of information and guidance as to all the relevant operation licenses;
c) Assistance and acceleration of issuance and renewal of residence and employment permits;
New Policy for the employment of third country highly skilled nationals
In combination to the establishment of the BFU, the government of the Republic will introduce a new employment policy for the third-country high-skilled nationals in certain eligible types of companies that will join the business facilitation unit, and those companies which are already registered in the Civil Registry and Migration Department (CRMD). The eligible type of companies are:
a) Companies of foreign interest operating or planning to operate in Cyprus;
b) Cypriot shipping companies;
c) Cypriot high tech/innovative companies;
d) Cypriot pharmaceutical companies or companies active in the sectors of bioenergetics and biotechnology;
At the same time, the policy itself provides for the following eligibility criteria for the third-country highly-skilled nationals:
a) Minimum gross monthly salary of at least € 2.500;
b) University diploma or degree or equivalent qualification or confirmation of relevant experience in a corresponding job of at least 2 years duration;
c) Employment contract of not less than two years;
The maximum number of third-country nationals is set at 70% of all the employees of the company for a period of 5 years from the date of joining the business facilitation unit. Following the expiration of the 5 years period, if criterion for employment of 30% Cypriot citizens is not met, a re-assessment will be conducted on a case by case basis.
Finally, the residence and employment permits will be issued within one month and have a duration of 3 years.
Supporting Staff
Apart from the above high-skilled third-country nationals, eligible companies will be able to employ other supporting staff from third countries for the duration of 3 years, provided that it does not exceed 30% of all support staff, and provided that a valid employment contract exists.
Family Reunification
Spouses whose family member is a third-country high-skilled national, accepted in the policy, will have the right to an immediate and free access to the labor market with remunerated employment. It must be noted that this right is not extended to supporting staff.
Digital Nomad Visa
Except from matters related to the BFU, the new strategy will provide for the introduction of the Digital Nomad Visa. The main idea is to attract skilled professionals who are working remotely, which becomes an all growing phenomenon in the employment sphere nowadays.
The beneficiaries of the above visa will be third-country nationals who are either self-employed or salaried employees who are working remotely with employers/clients outside of the Republic of Cyprus through the use of information and communication technologies. The residence permit for the eligible persons will be valid for 1 year, with a right to renew the permit for another 2 years. It must be noted, that these persons can be accompanied by their family members whose residence permit will last as long as the permit lasts for the eligible person. Finally, if the total residence in Cyprus will amount to 183 days within the same tax year, they will be considered as tax residents of the Republic, provided they are not tax residents in any other country.
The conditions for the issuance of a digital nomad visa are:
a) Evidence of Sufficient funds, which is set for € 3.500 per month. The evidence can be either the employment contract, pay-slips or account statements;
b) Medical Insurance;
c) Clean Criminal Record;
Furthermore, the strategy will involve the following innovations in the immigration policies of the Republic of Cyprus:
a) Simplification and acceleration of granting Category E work permits (Long Terms Resident Status);
b) Naturalisation period for high-skilled third-country nationals will be limited to 5 years instead of 7 years, and to 4 years provided that an eligible person has a recognised certificate of very good knowledge of Greek language ;
Tax Policies
In respect to tax policies, the new strategy will broaden the tax incentives in the below matters:
a) Tax exemption of 50% to new non domicile employees with employment remuneration of €55.000 and above for the period of 10 years;
b) Tax exemption of 50% for existing non domicile employees with employment remuneration of €100.000 and above – for the extended period of 17 years;
c) Tax exemption of 50% for existing non domiciled employees with employment remuneration between €55.000 and €100.000 EUR – for the period of 10 years;
d) Possibility of extending 50% tax exemption for investment in certified innovative companies to corporate investors;
e) Grant of an increased discount on research and development expenditure (e.g 20 %). Eligible research and development expenses will be deducted from taxable income at 120% of actual expenses;
Social Insurance
Finally, the present strategy supposes the conclusion between the Republic of Cyprus and other third-countries, bilateral treaties, allowing for third-country nationals who worked in the Republic of Cyprus, and contributed social securities towards the social insurance fund, upon their return to the country of their permanent residence, to be able to transfer their contributions paid, on the condition that these contributions did not acquire any right to an ole age pension, disability, etc.