How to open a company and relocate your employees to Cyprus
Many companies, including global giants, are actively “moving” their offices and relocating employees to Cyprus due to the advantages of the tax system, high-quality infrastructure, affordable ways to obtain a residence permit and the high standard of living, medicine and education. Foreign citizens have the right to establish an international company in Cyprus, which can employ citizens of non-EU countries. Such a company may obtain work permits for eligible employees and residence permits for them and their family members. As of 1 January 2022, Cyprus has a new policy for the employment of employees from third countries and the issuance of work permits has been significantly simplified. This initiative aims to attract foreign investment and talented workforce to the country. Companies Of Foreign Interests have the right to invite employees to work with the citizenship of third countries that are not part of the European Union.
Сompanies of foreign interests
Cyprus Companies Of Foreign Interests – are companies duly registered in the Republic of Cyprus, the majority of shares of which are owned by non-EU nationals and represent a capital of at least €200,000, which must be transferred to the company’s accounts from outside Cyprus. Companies of this type allow employees and their family members to obtain residence and work permits on preferential terms.
At the same time, maximum quotas for foreign personnel have been abolished. Companies are free to recruit any number of highly paid third-country nationals without having to confirm that there are no suitable candidates among European Union and Cypriot nationals for a particular position.
However, all companies commit to invest 30% of their total staff in Cypriots/EU citizens over a period of five years. In five years, that is after 2.1.2027, the ratio for new hires will be checked. If a company does not adhere to the 70/30 ratio, the case will be evaluated on its own merits and put before the management for an administrative decision.
The official website of the Department of Civil Registration and Migration states that before a Cypriot company with a foreign interest is allowed to employ non-EU citizens, the company must first register with the Business Facilitation Unit (BFU). Next, the company must be approved by the Migration Department as a company with foreign interest.
The BFU will check whether companies are eligible and will grant them a written confirmation of their registration at the new Register of Foreign Interest Companies. The registration will be submitted to the Department for the purpose of issuing residence and employment permits.
Which companies are considered companies with foreign interests?
Capital Structure: More than 50% of the company’s shares must be owned by citizens of non-EU countries.
Investment: Foreign shareholders must invest at least €200,000 in the company’s share capital. Alternatively, the company can provide proof of investments totaling €200,000 for business operations in Cyprus (e.g., office space, office equipment, etc.).
The company must have a physical presence in Cyprus, meaning it is required to conduct its business activities in office premises within the country. The use of coworking spaces or shared offices is permitted if it aligns with the nature of the business. However, the company must have real economic substance and be able to demonstrate its active operations. In cases where the company’s business model involves remote work for employees and office space is not required, such situations are reviewed individually. The possibility of operating without an office may be approved, but only with proper justification and confirmation of compliance with regulatory requirements.
Obtaining a residence permit in Cyprus through employment
In accordance with special provisions for Cypriot companies with foreign interest, foreigners can be employed in a company in Cyprus as Director and department heads, senior and middle management personnel, project managers and other specialists.
Criteria for employees
Employees are entitled to obtain a residence and work permit in Cyprus subject to the following conditions:
Receiving a minimum gross monthly salary of €2500. It is noted that third-country nationals who already hold residence and employment permits at the BCS Key Personnel level of companies of foreign interests, with a monthly gross salary of €2000 or more, will continue, for the next 5 years – until 31.12.2026, to renew their residence permit at the same employer without an increasing their payroll.
Possession of relevant academic qualifications or at least two years of relevant experience to the position to be filled.
Possession of an employment contract of at least two years’ duration. Even if the application is submitted for a one-year permit, the contract must have a duration and corresponding stamp duties for 2 years.
What is the validity period of the residence permit for employees?
The validity period of the permit depends on the duration of the employment contract and can be up to three years in a row.
The maximum duration of stay of a third-country national working in a company with foreign interests applies without any time limit, provided that he has a valid temporary residence and work permit.
Advantages of a Cyprus company with foreign interest for the founder and for employees:
Employment of employees. Companies can hire employees from third countries and are not required to prove that there are no suitable candidates among EU and Cypriot citizens.
Residence permit and work permit. Third country nationals have the right to obtain residence and work permits in Cyprus.
Family reunification. Employees have the right to family reunification so that their family joins them and also resides in Cyprus.
Reduction of income tax. Remunerations of employees whose first employment in Cyprus began from 1 January 2022 onwards are 50% exempt from income tax for 17 years (starting from the month of employment) if their annual remuneration exceeds €55,000. Read more: Tax system of Cyprus
Tax exemption. The first €19,500 of annual income is not subject to income tax.
Simplified naturalization. On November 30, 2023, the “Law on granting citizenship in an accelerated manner to highly qualified foreign specialists” was approved. According to which, highly paid specialists from third countries working in Cyprus can obtain citizenship after just 4 or 5 years of residence on the island, proficient in Greek at level A2 or B1. This provides additional opportunities for the rapid naturalization of foreign professionals in Cyprus.
Our company's Cypriot lawyers will provide you with legal support and advice on issues related to business, taxation and immigration status in Cyprus, providing you with the necessary information.
Our services include:
Assistance in choosing the right tax regime
Legal support for registering a company with foreign capital
Providing a legal address, secretary, nominee service
Registration with tax authorities
Relocation of employees and support in obtaining work and residence permits in Cyprus
Elena Georghiou is the founder of Feod Group, a company that has been successfully operating since 1992. With over 30 years of experience, she specializes in corporate law, international taxation, immigration law, investment, and financial consulting....
Elena Georghiou is the founder of Feod Group, a company that has been successfully operating since 1992. With over 30 years of experience, she specializes in corporate law, international taxation, immigration law, investment, and financial consulting.
Since 1992, Feod Group has been providing a wide range of legal, business and immigration services in Europe, the USA and other countries of the world.
The company has accredited western lawyers, experts in various fields of law and jurisdictions of the world.
Having offices in Europe and the USA, Feod Group provides rapid paperwork and maximum customer comfort.
We provide our clients with related services, such as relocation and adaptation abroad, organizing family relocation abroad, enrollment of children in schools and many other services.
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