NEWS

The Cyprus government has presented its plan for attracting companies to operate or expand their activities in Cyprus.

The main points of the plan are:

• Application for Cypriot Citizenship

The period of eligibility for applying for citizenship will be reduced from seven years of residence and work in the Republic, to five years and to four years for holders of certification for very good knowledge of the Greek language

• Simplification of the process for granting work permits

 The Ministry of Interior will amend the relevant Regulations of the Aliens and Migration Law, to simplify the process and determine the criteria based on which work permits will be granted

• Right to employment for family members of third country nationals

Spouses of third country nationals who have obtained a residence and work permit in Cyprus with a minimum gross monthly salary of €2,500 will have immediate and free access to employment. The scheme is not available for support staff.

• Revised policy for the issuance of temporary residence and work permits to third country nationals
  • Eligible Companies:
    • Foreign companies operating in Cyprus or wishing to have physical presence in Cyprus
    • Cyprus shipping companies
    • Cyprus high-tech/innovation companies (subject to conditions)
    • Cyprus pharmaceutical companies or companies operating in the fields of biogenetics and biotechnology.

• • Main provisions:
    •  A minimum gross monthly salary of €2,500 is introduced for employees who have the required academic skills or at least two years of relevant experience
    • Companies will be able to employ third country nationals as support staff (with gross monthly salary below €2,500) provided that the employment of third-country nationals does not exceed 30% of all support staff
    • The duration of the residence and work permit can be up to three years and will be issued within one month from the application date
    • The maximum number of third country nationals is 70% of the total number of employees in a 5-year period from the date of the inclusion of the company in the scheme
• Tax incentives
  • Expansion of the existing income tax exemption of 50% for taking up employment in Cyprus:
    • The personal income tax exemption of 50% will be expanded to cover new Cyprus tax residents-employees with salaried income of €55,000.
    • Existing beneficiaries of the scheme (income between €55,000 – €100,000) should be able to extend the exemption from 10 to 17 years.
  • Extension of the tax exemption for investment in innovative companies
    • Consideration of the possibility to grant the tax exemption of 50% for investment in certified innovative companies to corporate investors in addition to individuals
  • Increased tax deductions for Research & Development (R&D) expenses
    • Granting an increased tax deduction on R&D expenses (e.g. by 20%). Eligible R&D expenses will be deducted from taxable income equal to 120% of the actual.
• Digital nomad visa

A new type of residence permit will be introduced, for people who wish to live in Cyprus but work in companies operating abroad referred to as digital nomad visa.

Persons eligible for the “visa” are third country nationals who are self-employed or employees who work remotely using information and communication technologies, with employers/clients outside Cyprus.

Digital nomads will have the right to stay in Cyprus for up to one year, with the right to renew for another two years. They can be accompanied by their family members, to whom, upon request, a residence permit that expires at the same time as their dependent’s is granted. During their stay in Cyprus, the spouse or partner and the minor members of the dependent’s family are not allowed to provide dependent work or to engage in any kind of economic activity in the country. In case they reside in Cyprus for a total period exceeding 183 days within the same tax year, then they are considered Cyprus tax residents.

• • Prerequisites (among others):
    •  There is a minimum threshold of funds coming from abroad (supported by salary, bank statements, etc.) set to €3,500 per month, increased by 20% for the spouse and by 15% for any minor dependent
    • Medical insurance
    • Clean criminal record certificate from the country of residence