A. Regular Procedure
On the 29th November 2006, the Council of Ministers established a policy for issuing and renewing residence and employment permits for third country employees who are to be employed at foreign interest companies registered in the Republic of Cyprus (Cyprus). With the revision of such policy on the 7th October 2020, the scheme was (conditionally) extended to companies with shareholders of third countries who acquired the Cypriot citizenship by exception.
Approval for employment of third country nationals can be obtained if the following two requirements have been met.
- Registration of the Cypriot company with the Civil Registry and Migration Department. It should be noted that in order to qualify, amongst other conditions, the Beneficial Owner of such company should send at least EUR 200,000 to Cyprus as company capital. As such a bank account should be opened in the Republic of Cyprus.
- The future employee of the company should provide a number of personal documents and also undergo medical tests. This procedure is completed in two parts (partially before arrival and partially after arrival)
Eligible employees are:
- A maximum of 5 directors as registered with the Registrar of Companies and Official Receiver, General Managers of branches and of mother companies of alien companies, Departmental Managers, Project Managers. The gross monthly salary of each of these directors should be at least EUR 4,000;
- A maximum of 10 upper/middle management executives and other key personnel (administrative, secretarial or technical staff). The gross monthly salary of each of these persons should be at least EUR 2,000;
- Specialist (a list of skilled persons is available). The gross monthly salary of each of these persons should be at least EUR 2,000. The number of persons who are allowed to be employed under this category is based on annual turnover of the company.
Moreover, it should be noted that family members of the above mentioned employees may apply to join the employee in Cyprus, immediately after the employee has received the Residence Permit, if certain conditions have been met.
Government fees for this procedure will vary between EUR 135 and EUR 405 (these fees do not include the incorporation of the company).
The entire procedure from filling the registration documents of the company until receipt of the residence and work permit of the employee will take approximately 2 months.
Lastly, it is important to note that:
- The residence permit issued for directors, upper/middle management executives or other key personnel and specialist may be renewed every 1 – 2 years for an indefinite period of time;
- The capital of EUR 200,000 is not frozen and can be used by the company in any manner it so wishes;
- Support staff may also be hired by such companies (only in the event where there are no qualified Cypriot or EU citizens to fill these positions and only at a rate of 30% of the total EU/CY staff) yet the mentioned documents, procedure, timeline and government fees may differ as it includes the filling of a request with the Department of Labour. The maximum time of residence granted to support staff is 4 years and family members of support staff do not have access to family reunification.
B. Fast Track Business Activation Mechanism
On the 3rd September 2020, the Council of Ministers approved a fast-track business activation mechanism in order to attract foreign business in the Republic of Cyprus (Cyprus) as well as to provide fast and efficient services to foreign businesses wishing to establish presence in Cyprus.
The services for this scheme are provided by the Ministry of Energy, Commerce and Industry and include services in respect of establishing a company, registrations with Social Insurance, VAT and Income, Tax, Employers registry, and issuance of residence and employment permits for the foreign employees (as per the revied policy approved by the Council of Ministers on 7th October 2020). Moreover, information is provided on any permits necessary for the company to commence business.
The fast track procedure is similar to the regular procedure, with only the following differences to be noted:
- Approval for employment of third country nationals can be obtained by the use of the One Stop Shop (if requested within six months of establishing a presence in Cyprus, in the event that no registered offices is established at that time).
- Relocating companies should show audited company accounts with a minimum yearly turnover of EUR 500,000 for 3 out of the last 5 years;
- New start-ups in the republic of Cyprus should provide a reliable 5-year business plan illustrating growth potential should be provided.
The estimate examination time frame will depend on the turnover of the company and is estimated between 5 and 7 weeks. This time frame also includes the incorporation of the company with the Registrar of Companies.
It should also be noted that businesses expressing interest in transferring their operations to Cyprus and wishing to benefit from the above provisions should submit a request to Ministry of Energy, Commerce and Industry. Such request should be accompanied by a letter of expression of interest in establishing presence in Cyprus (in the event of companies not already operating in Cyprus). The letter should include the following and must be supplemented by the documents as indicated under the heading “Requirement for the company” above:
- General information such as: company name, year of establishment, type of legal entity, representative details (if applicable), company’s contact information, address of new premises;
- Company activities such as: business history, activities, facilities and infrastructure, equity, organization and management, staff, customers – distribution network;
- Proposed investment information such as: purpose and objectives, place of installation, capital expenses, investment implementation schedule, investment financing, number of third country nationals expected to be employed as specialized employees in Cyprus, total number of jobs expected to be created in Cyprus (third country nationals and EU/local staff);
- Financing of the investment such as: own funds or borrowed funds;
- Financial forecast such as: economic forecast, profitability, return on investment.
It is noted that Due Diligence checks will be conducted for all companies wishing to join the Fast Track Mechanism.