Cyprus, the 3rd largest island in the Mediterranean Sea, is located at the eastern end of Europe, at the crossroads of three continents, Europe, Africa, and Asia. Cyprus is a small but dynamic country in the sense that it has achieved to establish itself as a destination of choice for doing business. Competitive advantages include one of the lowest corporate tax within Europe (at just 12,5%), multiple tax incentives for attracting international business companies and private clients, as well as an overall business friendly environment and advanced infrastructure. All this combined with a high quality of life and the best possible weather all year-round.
No wonder that Cyprus has been ranked so high both by leisure as well as business key indicators as an attractive destination for investor immigration.
Cyprus Permanent Residency can be obtained by investing at least €300,000 in one of the following investment categories:
(A) Investment in a house/apartment: Purchase of a house or apartment from a development company, which should concern a first sale of at least €300,000 (plus VAT).
(B) Investment in real estate (excluding houses/apartments): Purchase of other types of real estate such as offices, shops, hotels or related estate developments or a combination of these with a total value of €300,000. The purchase of interest can be the result of a resale.
(C) Investment in Cyprus Company’s share capital, with business activities and personnel in the Republic: Investment worth €300,000 in the share capital of a company registered in the Republic of Cyprus, based and operating in the Republic of Cyprus and having a proven physical presence in Cyprus and employing at least five (5) people.
(D) Investment in units of Cyprus Investment Organization of Collective Investments (forms of AIF, AIFLNP, RAIF): Investment worth €300,000 in units of Cyprus Investment Organization Collective Investments
Some other criteria that need to be met are:
The applicant must prove that he has a secure annual income of at least €30,000. This annual income increases by €5,000 for each dependent family member and €8,000 for each dependent parent (of the applicant and/or his spouse). This income should derive from abroad and may include salaries or wages, pensions, dividends from shares, fixed deposits, rents, etc.
Have a clean criminal record.
Visit Cyprus at least once every two years.
Declare that they will not engage in any employed activity (can of course form company in Cyprus and receive dividends).
Provided that the above criteria are met, the application shall be examined by the Ministry of Interior and the permit is expected to be granted within two months.
Key Benefits of the Cyprus Investment Program
The Cyprus Investment Program (CIP) is based on subsection (2) of Section 111A of the Civil Registry Laws of 2002 to 2019, which was approved by the Cyprus Council of Ministers on September 2016, with subsequent amendments made in May 2018, February 2019, May 2019, and August 2019.
By cause of this law, the Council of Ministers may grant citizenship by naturalisation to foreign entrepreneurs, as well as to the spouse/civil partner, children, as well as the parents of the investor. Details of this can be found further below.
Having the intention and the ultimate goal of attracting international investment and talent in Cyprus, the Council of Ministers 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 Business Facilitation Unit (BFU) came into force on the 1st of January 2022. In essence, this unit is a reviewed and simplified version of the Fast Track Business Activation Mechanism. The main aim of the BFU is to provide a faster and more effective process of applying for foreign interest company establishment in Cyprus or the development of existing companies.
SERVICES PROVIDED BY THE BFU
1.The unit will act as the single point of contact and will give the ability to new entities to complete all registrations for their establishment. The setting up of a business includes the below:
2.Part of the services included in the BFU is also the provision of guidance regarding the necessary licensing or permits for the activation and establishment of any type of businesses in the Republic. The unit will also provide instructions such as the development of a business plan, the registration of the trademark of the business, and many other related issues.
3.Furthermore, the unit will provide support regarding the review and application for new or existing foreign interest companies wishing 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 direct procedure. Once the company is registered with the BFU, a written confirmation will be given. Using the written confirmation, companies can contact the CRMD for the residence and employment of their third-country personnel.
1.All foreign interest companies in which third-country nationals own the majority of the company’s shares. 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 capitalthe foreign participation should represent an amount equal to or greater than the amount of € 200.000 as nominal capital.
2.Cypriot high-tech companies / innovative companies. To qualify for this category a company must prove the following:
3.Cypriot shipping companies
4.Cypriot pharmaceutical companies or companies active in the sectors of biogenetics and biotechnology
5.Public companies registered on any recognised stock exchange.
6.Companies of international activities (formerly offshore), which operated before the change of regime, whose data are held by the Central Bank.
It should be noted that for all categories mentioned above the company must prove the exercise of their business in independent offices in Cyprus, housed in appropriate premises, separate from any private residence or other offices.
WORK PERMITS FOR THIRD-COUNTRY NATIONALS
The new program also introduced new criteria regarding the employees of foreign interest companies. As of January 2022, there will be no categorization of the personnel of the company. Employees of foreign interest companiesare now titled “high skilled employees” and they can apply for residence permit for up to 3 years given that:
During the period of 5 years, from the date of joining the BFU, 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 said 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 to the above, the current legislation for family reunification is still in force and will apply to any third country national who has obtained a residence permit in accordance with the above criteria. This will provide immediate and free access to the labour market, with remunerated employment for the spouse of a high skilled third country national.
Moreover, 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. An employment contract between the third country national and the employer duly validated by the competent authority, will also have to be in place.
As part of the new strategies introduced to attract business in Cyprus, the Ministry of Interior will proceed with the amendment of the Civil Registry Legislation regarding the time criteria for naturalization of high skilled third country nationals.
The proposed amendments that will be introduced in 2022 will include the right to apply for naturalization after 5 years of residence and work in the Republic, instead of the current 7-year requirement. Also, in cases where the applicant holds a recognized certificate of very good knowledge of the Greek language, the right to apply for naturalization will be reduced in 4 years.
The flexibility and extensive nature of the new criteria, as explained above, will certainly work in favor of Cyprus and their pursuit of becoming an international high-growth business center.
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