The Cabinet of Ministers on the 10th of May 2022, approved a new tax incentive scheme aimed at attracting foreign companies to relocate their headquarters/offices to Cyprus and also to attract high-skilled foreign employees. The scheme further also seeks to repatriate Cypriot professionals who are currently working and living abroad.
Further, additional measures are to be implemented that would make it easier for spouses of foreign employees to obtain a residence permit in Cyprus and to have access to local labor market.
Currently, non-residents of Cyprus who take up employment in Cyprus and receive emoluments of more than 100,000 euros per annum can benefit from a 50% tax deduction in respect of their employment income for the first 10 years of employment.
Under the new scheme, the minimum required salary will be reduced from 100,000 to 55,000 euros per annum, while the duration of the 50% tax deduction will be extended from 10 years to 17 years from the date of commencement of employment. This benefit is granted immediately from the first year of employment in Cyprus.
A grace period of two years will apply for obtaining this benefit in cases where an employee's initial remuneration starts at an amount below the minimum annual salary of 55,000 euros.
This incentive scheme will also apply to existing employees in Cyprus, provided they were residents outside of Cyprus for 12 consecutive years prior to the commencement of their employment in Cyprus. In such cases, a grace period of six months will be applied to achieve the minimum salary threshold.
The intentions of the Cyprus Government is for this program to become one of the most competitive in the European union and has already shown enormous interest.
At AGP we have already successfully assisted many companies and individuals to relocate with their families and pets, by providing a full range of services from immigration/tax consulting/corporate/financial and legal, thus taking the pressure off management and employees allowing them to concentrate on their day to day tasks and concerns.
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.