On the 15th of October 2021, the Council of Ministers approved the "Strategy for Attracting Businesses for activities or/and expansion of activities in Cyprus". Purpose is to boost Cyprus to becoming an international business centre for foreign companies while at the same time attracting international investments and talent.
As of 01 January 2022 the existing "Fast Track Business Association Mechanism" will now be transformed to the "Business Facilitation Unit".
The main goal of the Business Facilitation Unit is to provide assistance and speed up procedures from a single point of contact.
Who is eligible?
- Any foreign companies that operate in Cyprus or any foreign companies wishing to establish presence in Cyprus. Such companies must have physical presence in Cyprus. Foreign companies are defined as companies whose shareholders holding the majority of the company's shares are third-country nationals. In the cases where the foreign participation in the company's share capital is equal or less than 50%, then the foreign participation must match an amount equal or greater to amount of €200,000 as nominal capital;
- Public companies that are registered on any recognised stock exchange;
- Cyprus shipping companies;
- Cyprus tech/innovation companies – High technology company (see details below);
- Cyprus pharmaceutical companies or Cyprus companies that are active in the field of biogenetics and biotechnology;
- Companies who the majority of share capital is owned by individuals that have obtained Cyprus citizenship based on economic criteria;
A company will be classified and considered to be a "High Technology Company" if the below criteria are met:
- The company is established and present in the tech market, and
- The company has high levels of Research and Development intensity, and
- The company focuses on products that are included in the below categories:
- Space industry
- Telecommunication, electronic products or computers
- Pharmaceutical or biomedical
Companies will be able to complete all their registration requirements of their business in the one-stop shop of the Business Facilitation Unit. This shop includes the following:
- Ensuring that the company's choice of name is approved and the company is registered to the Department of Registrar of Companies;
- Registration of partnerships, European company (SE) and branches to the Registrar;
- Ensure that the company applies to the Employers' register and is informed of all their social insurance obligations;
- Assist the company in their VAT registration and registration to the Tax Department and Income Tax office;
- Provision of a wide range of other general assistance in regards to matters such as taxation system, labour regulations, environmental regulations, economic environment;
Another important section of the business facilitation unit is providing support and continuous guidance to the companies and their business development. Guidance could be in the form of providing information and assistance to the licencing that has to be done or with the company's trademark. Guidance can also be provided for the recruitment of suitable employees that will match the company's needs. Generally guidance is provided for the whole life cycle of the company and its development.
What is the procedure?
All companies that wish to transfer their operations to Cyprus or expand, must state their interest electronically by submitting a request to the Business Facilitation Unit of the Ministry of Energy, Commerce and Industry through email. Email sent must include a letter that will clearly state the company's interest for transfer or expansion of operations in Cyprus along with a description of the company's main activities, its history, plans, number of staff etc. A new company must submit a 5 year business plan with goals and strategies that will aim to the company's profitability and growth.
The Business Facilitation Unit will then contact the company and will inform them of the next steps and documents that will need to be sent in order for the procedure of services that will be utilised by the company to commence.
It is important to note that the process is completed in a very timely manner. Within 7 working days from the date of submission of all the requested documents to the Ministry, all steps for the registration of a company are completed.
All online submissions and applications can be accessed through the portal and be tracked.
If a company is already registered to the Civil Registry and Migration Department, then the above application process does not apply to them and the Business Facilitation Unit policy will automatically apply to the company.
In addition to the above, the government has also revised the issue of temporary residence and work permits to third country nationals. Eligible companies are the type of companies that have been listed above in regards to the Business Facilitation Unit. Eligible companies are able to employ highly skilled employees from third countries assuming certain criteria are met. Criteria are listed below:
- Hold a university degree or title or equivalent qualification or holds relevant experience of at least 2 years;
- From the date that a company joins the Business Facilitation Unit and for a period of 5 years, the maximum number of third country nationals that are employed, should not exceed 70% of the total company's workforce. If 5 years pass and the company are unable to employ 30% Cypriot employees, company's status will be re-examined;
- Gross salary must exceed the minimum amount of €2,500 per month;
Permits are issued within 1 month and can last up to 3 years. The main focus of this revised policy is to give added value to the Cyprus economy.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.