Cyprus: New measures to attract foreign investment to Cyprus
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From January 1, 2022, this new action plan, which facilitates the sectors mentioned below, will come into force.
The new measures aim to attract foreign investment and strengthen business activity in Cyprus, they are classified into 8 main categories.
- Employment of third country nationals employed by companies / enterprises of foreign interest, as well as by Cypriot companies which add value to the economy of Cyprus.
Eligible companies are:
- Foreign companies / companies operating in Cyprus or foreign companies / companies intending to operate in Cyprus and which operate independent offices in Cyprus, which must be separated from any private residence or other office;
- Cypriot shipping companies;
- Cyprus High-end technology and innovation related companies;
- Cypriot pharmaceutical companies or Cypriot companies active in the field of biogenetics and biotechnology.
- Employment of third country nationals with either:
- A minimum gross monthly salary of 2,500 EUR;
- A maximum gross monthly salary of 2,500 EUR.
- Rights to family reunification of third-country nationals belonging to the Business Facilitation Unit
Under this new government proposal, immediate and free access to the labor market is offered to spouses of people who have obtained a residence and work permit in Cyprus through the Business Facilitation Unit of the category ( 2) above. This only applies to those who receive a minimum gross salary of EUR 2,500, ie who do not support staff.
- Simplify and speed up the work permit granting process
Taking a step back to recognize the unnecessary delays and the fact that current processes were time consuming, the Home Office is working on amending the applicable regulations in order to simplify the procedure and reduce the criteria for obtaining a license. valid job.
- Digital nomadic visas
By harmonizing our policy with the other European Member States, which have introduced similar provisions for professionals wishing to work remotely, the Republic of Cyprus will facilitate the conditions of residence for third country nationals who are either self-employed / self-employed or employees who work remotely with employers and / or clients outside the Republic of Cyprus for at least a period of 15 months.
The Digital Nomad residency status would cover the following:
- Right to stay in the country for a period of up to one year with the right to renew their residence for two more years;
- Family members can accompany the digital nomad and obtain the residence permit. It will be valid at the same time as the digital nomad’s residence permit, provided that the digital nomad is his sponsor. While in Cyprus, the spouse / partner and dependents of the sponsor are not allowed to work or engage in any economic activity in Cyprus.
In the event that beneficiaries of this program reside in Cyprus for a period which in total exceeds 183 days in the same fiscal year, then they will be considered as tax residents in Cyprus – provided that they are not tax residents in another jurisdiction.
- Tax incentives for employees
The aim is to extend the applicability of the tax exemption to employees in Cyprus (provided they were not residents before their employment in Cyprus) for a period of 17 years.
The new measures will bring the following results:
- 50% exemption for new resident-employees whose remuneration exceeds EUR 55,000;
- Current beneficiaries will have the right to extend the benefit from 10 to 17 years.
- Tax incentives (general)
In addition to the above tax incentives, legal persons can also benefit from:
- The Ministry of Finance is considering the possibility of extending the 50% tax exemption for investments in certified innovative companies to institutional investors (currently this only applies to natural persons)
- The granting of an additional discount on Research and Development (R&D) expenses may be deductible from taxable income in an amount equal to 12% of actual taxable income.
Last but not least, an employee who has completed five years of residence and employment in Cyprus (or in case the employee obtains a Greek language certificate, four years) can apply for citizenship.
AG Paphitis & Co. LLC
The content of this article is intended to provide a general guide on the subject. Specialist advice should be sought regarding your particular situation.
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