On
15 October 2021 the Cyprus government presented its Action Plan for attracting
companies to establish or expand presence in Cyprus. The Plan is in line with
the guidelines of the EU Recovery and Resilience Facility, which has been
established to help the EU emerge stronger and more resilient from the crisis
caused by COVID 19. The implementation of the Action Plan is expected to create
added value to the economy of Cyprus, as well as to redefine the economic model
of the country.
Although
more details will become known in the following weeks, the main points, which
are briefly presented below, seem very promising. The key points of the Action
Plan are briefly summarised below:
Revised
policy for the issuance of temporary residence and work permits to third
country nationals
Eligible
businesses include companies of international interest, either already active
in Cyprus or wishing to set up in the country and which are/will be operating
from their own premises (separate from any other office or private residence),
as well as for local interest companies in specific areas of economic activity,
such as the following:
Work permits for third-country nationals can go as
high as 70% of all employees of a company over five years. Any cases for which
after the lapse of the five-year period it is not possible to employ at least
30% of local staff, will be examined on their own merits.
A
minimum gross monthly salary of €2,500 is introduced
for employees who have the required academic skills (university degree or
equivalent title) or at least two years of relevant experience. The employment
contract must have a minimum duration of two years.
Companies
will also be able to employ third country nationals as support staff provided
that the employment of staff does not exceed 30% of all support staff of a
company. The gross monthly salary of such persons should be lower than €2,500.
The permits will be issued within one month from the
application date and will last up to three years.
Right
to employment of family members
Spouses
of third country nationals who have obtained a residence and work permit in Cyprus
based on the above mentioned policy for employment of third country nationals
earning a gross monthly salary of at least €2,500 per month (i.e. non-support
staff), will have immediate and free access to employment.
Simplification
of the process for granting work permits
The
Regulations of the Aliens and Migration Law will be amended in order determine
the criteria and simplify the process for granting work permits.
Digital
Nomad visa
Eligible
for such a visa will be third country nationals who are self-employed or
employees who work remotely for clients and employers respectively who are
situated outside Cyprus.
There
will be an initial limit of 100 applications.
The
particular visa will provide the right to stay in Cyprus for up to one year,
with a right to renewal for another two years.
Upon
request, a residence permit, expiring at the same time as the one of a holder
of a Digital Nomad visa, can be grated to his/her family members. During their
stay in Cyprus, the spouse or partner (concerns persons who have entered into a
civil union) and the minor members of the applicant’s family are not allowed to
provide dependent work or to engage in any kind of economic activity in the
country.
Applicants
for such a visa will have to show receipt from abroad of at least €3,500 per
month (supported by salary slips, bank statements, etc.), increased by 20% for
the spouse and by 15% for any minor. Furthermore, they need to provide a
declaration that they undertake not to provide any kind of employment or
service to an employer or client based in Cyprus. They also need to provide
evidence about their employment or occupation (i.e. employment contract or
engagement agreement in case they are freelancers or details about the
enterprise in case they are self-employed). They also have to hold a medical
insurance and to present a Clean Criminal Record Certificate from their country
of residence.
Extension
of 50% Income Tax Exemption
The
existing Income Tax exemption of 50% for people moving to Cyprus for employment
earning at least €100,000 per annum will be expanded, by reducing the threshold
to €55,000 per annum.
Existing
beneficiaries will be eligible for extension of the exemption from 10 to 17
years.
Increased
tax deductions for Research & Development (R&D) expenses
R&D
expenses will be granted an extra tax allowance of 20%, thus giving a 120%
total deduction from taxable income.
Application
for Cyprus Citizenship
Individuals
looking to apply for Naturalization will now be eligible to do so within five
years, instead of seven years of residence and work in Cyprus. A further
reduction to four years will be granted to holders of certification for very
good knowledge of the Greek language.
Implementation
The
Action Plan will be implemented as from 1 January 2022 with the exception of
actions related to the 50% Income Tax Exemption and to Citizenship for which
legislative regulations are required, which are expected to be approved in the
first quarter of 2022.
As
always, we are at your disposal for
any further information or clarification and for discussing any specific
enquiries, concerns and thoughts you may have.
