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On 15 October 2021, the Minister of Finance of the Republic of Cyprus, Mr. Konstantinos Petridis, has given a Press Conference which marked the launch of the Action Plan for Attracting Companies to Operate and Expand their Activities in Cyprus.
The aforesaid Action Plan is a notable development of the promotion of Cyprus as an international business centre and comprises of the following:
Action: Transform the Fast-Track Business Activation Mechanism into a Business Facilitation Unit for active companies or prospective companies that are interested in conducting business activities in Cyprus and coordinate the simplification and digitisation of the processes relating to the activities of international companies.
Competences:
Proposed timeline: Q1 2022
Action: Revision of policy for employing third country nationals in eligible companies.
Eligible companies: businesses/companies of foreign interests (international companies) operating, or intend to operate, in Cyprus with physical presence (independent offices); Cypriot shipping companies; Cypriot high tech and innovation companies; and Cypriot pharmaceutical companies or companies active in the biogenetics and biotechnology sectors.
Employment criteria: Employment of third country nationals with strong skills and qualifications in possession of a university diploma or degree (or equivalent qualification) or a confirmation of a two (2) year work experience in a comparable position. For the purposes of this action, these nationals must have an employment contract of a minimum two (2) year duration and receive a minimum monthly gross salary of €2,500.
Issuance & Validity of permits: Immediately within one (1) month and will be valid for up to three (3) years.
Support personnel: The employment of support personnel with a monthly gross salary <€2,500 is allowed provided that such employment does not exceed 30% of the total number of the support personnel and that there is a duly validated employment agreement between the third country national and the employer.
Proposed timeline: January 2022
For information on the current framework on employment of third country nationals at Cyprus companies of foreign interests, visit our Residency & Immigration page for information on Employment in Companies with Foreign Interests.
Action: The provision of free and direct access to the employment market (paid employment), to spouses of third country nationals (applicants) for whom the latter has secured a residency and work permit in Cyprus through the mechanism and who receive a minimum monthly gross salary of €2,500. This action does not relate to support personnel.
Terms & Conditions: As per the legislative provisions governing permits, including a valid passport with validity of minimum two (2) years, permanent residency in the Republic of Cyprus, employment contract (duly certified where appropriate), skills and qualifications to practice the profession, appropriate housing, medical insurance, clean criminal record, medical examinations, and an accompanying statement.
Proposed timeline: January 2022
For information on the framework governing family members of third country nationals that is currently in force, visit our Residency & Immigration page.
Action: Simplification and expedite the process for granting work permits under Category E, an immigration permit for persons who have been offered permanent employment in Cyprus.
Proposed timeline: Q1 2022
For information on the framework governing work permits that is currently in force, visit our Residency & Immigration page for information on Category E permits.
Action: Acknowledging the growing importance and move towards working remotely, the Government has decided to utilise the prospects created by people residing in Cyprus and being employed abroad. Hence, the introduction of the Digital Nomad Visa program, with an initial beneficiary cap at 500 beneficiaries, relating to residency permits (and not work permits). The program has been established on the basis of similar programs for third country nationals that are currently being implemented in other European countries, e.g., Portugal, Croatia, Estonia, Germany, the Czech Republic, Norway and Greece.
Eligible applicants: Self-employed or freelance professionals or employed third country nationals who are working remotely using Information and Communications Technology (ICT) with clients or employers outside Cyprus for a period of twelve (12) months.
Residency status:
Terms & Conditions (selective list):
Proposed timeline: January 2022
Action – Extension of the tax exemption for investment in innovative businesses: In anticipation of the opinion by DG Competition of the European Commission, the Government is assessing the possibility of extending the 50% tax exemption for investment in certified innovative companies and by corporate investors.
Action – Expansion of the tax exemption for workers employed in Cyprus: provided that these workers were non-residents of Cyprus prior to the start of their employment for a period of seventeen (17) years.
The current tax exemption will be expanded in order to cover new residents-employees in Cyprus with a minimum salary of €55,000 and a tax exemption of 50%. While current employees have the possibility to extend the benefit from ten (10) to seventeen (17) years, potential beneficiaries of this tax exemption must have an income of €55,000-100,000 for the remaining seventeen (17) year period.
Action – Increased tax deductions for R&D costs: Granting of an increased tax deduction for Research & Development (R&D) costs, such as by 20%. Eligible R&D expenses will be deducted from the taxable income at an amount equal to 120% of the actual amount.
Proposed timeline: Q1 2022
For information on the tax incentives and exemptions currently in force, visit our Benefits & Incentives page for information on Benefits, on Tax Incentives, and on Double Tax Treaties (DTT).
Action: This action includes the taking of a political decision to examine applications to obtain Cypriot citizenship by naturalisation in priority, following seven (7) years of residing and being employed in Cyprus, with immediate implementation. Thereafter, the Aliens and Immigration Law (Cap.105) will be amended in order to decrease the requisite number of years to five (5) years and, in cases where the applicant holds a recognised certificate of very good knowledge of the Greek language, four (4) years.
Proposed timeline: Q1 2022
For information on the Cypriot citizenship framework currently in force, visit our Residency & Immigration page for information on obtaining the Cypriot citizenship by naturalisation.
Peripheral Action 1: Development of an online platform for start-ups, innovation and high tech companies, with a proposed timeline for Q1 2022.
Peripheral Action 2: Revision of the corporate spin-off legal framework with the intention of making such actions more widely used, with a proposed timeline for Q1 2022.
Peripheral Action 3: Informative campaign to attract qualified Cypriots employed abroad and targeted campaign to qualified workforce employed in countries that may currently be experiencing political instability (e.g., Belarus, Lebanon and Armenia), with a proposed timeline for Q1 2022.
Peripheral Action 4: Enactment of legislation that will facilitate the issuing of licenses for strategic investments through the establishment of a new section within the Department of Town Planning and Housing of the Ministry of Interior of the Republic of Cyprus, with a proposed timeline for Q1 2022.
Peripheral Action 5: Assign the branding, marketing and communication aspects of implementing the Action Plan, in its entirety, to a business/company having the requisite expertise, which must be utilised by all authorities engaged in promoting Cyprus as an attractive investment hub and an international business and financial centre (e.g., the Cyprus Investment Promotion Agency (CIPA), the Cyprus Chamber of Commerce and Industry (CCCI), the Cyprus Employers & Industrialists Federation (OEB), and Diplomatic Missions), with a proposed timeline for Q1 2022.
Peripheral Action 6: Completion of the action currently in force for judicial reform, with a proposed timeline for 2023-24.
Peripheral Action 7: Revision and modernisation of the Companies Act (Cap.113), which is the main piece of legislation governing companies in Cyprus, with a proposed timeline for 2023-24.
Peripheral Action 8: Upgrading the infrastructure for ICT and broadband connection, with a proposed timeline for 2024.
Sub-Action 1: In cooperation with the labour market, align the curriculum of university programs with the needs of the labour market, especially in the ICT sector, with a proposed timeline for 2022-23.
Sub-Action 2: New school programs that will enhance the promotion of positive sciences and other sciences with the intention of improving the appropriately qualified professional to the respective labour market ratio, with a proposed timeline for 2023-24.
Sub-Action 3: Upgrading the skills and competences of employees with the aim of aligning those with the needs of the respective labour market (e.g., cross-sectoral abilities, specialised programs, and professional qualifications), with a proposed timeline for 2023-24.
LET’S WORK
TOGETHER.
5) Social insurance benefits
Action: Securing the right to a pension transfer by intensifying the efforts made to conclude bilateral agreements with third countries as specified by the Ministry of Labour, Welfare & Social Insurance of the Republic of Cyprus. The conclusion of these bilateral agreements will enable third country nationals to transfer the social insurance contributions they have paid in Cyprus when they return to their country of permanent residence, on the condition that with these contributions they did not obtain any right to a pension for senior citizens, disability and so forth.
Proposed timeline: Q1 2022