Starting from the 1st of January 2022, this new action plan which facilitates the below mentioned sectors, will come into force.
The new measures aim to attract foreign investments and enhance the business activity in Cyprus, they are categorized in 8 main categories.
- Employment of third-country nationals who are employed by foreign interest companies/business, as well as for Cyprus companies who add value to the economy of Cyprus.
The eligible companies are:
- Foreign businesses/companies operating in Cyprus or foreign businesses/companies intending to operate in Cyprus and who operate independent offices in Cyprus, which must be separate from any private residence or other office;
- Cyprus Shipping Companies;
- Cyprus Companies relating to high-end technology and innovation;
- Cyprus pharmaceutical companies or Cyprus companies who are engaged in the field of biogenetics and biotechnology.
- Employment of third country nationals with
- A minimum gross monthly salary of 2,500 EUR;
- A maximum gross monthly salary of 2,500 EUR.
- Family re-unification rights of third-country national belonging to the Business Facilitation Unit
Under this new government proposal, immediate and free access to the labour market is offered to the spouses of the persons who have obtained residency and work permit in Cyprus through the Business Facilitation unit under category (2) above. This only applies for those who receive minimum gross salary of 2,500 EUR i.e. not supporting staff.
- Simplify and fast-track the process of granting work permits
Taking a step back to acknowledge the unnecessary delays and the fact that the current processes were time consuming, the Ministry of Interior is working on amending the applicable regulations in order to simplify the procedure and reduce the criteria for obtaining a valid work permit.
- Digital Nomad Visas
Bringing our policy in line with the other European member states, who have been introducing similar arrangements for professionals who would like to work remotely, the Republic of Cyprus will be facilitating the residency requirements for third country nationals who are either self-employed/freelancers or employees who work remotely with employers and/or clients outside of the Republic of Cyprus for at least a period of 15 months.
The Digital Nomad residency status would cover the below:
- Right to stay in the country for a period of up to one year with the right to renew their residency for another two years;
- Family members can accompany the digital nomad and obtain the residency permit. It will be valid for the same time as the digital nomad's residency permit provided that the digital nomad will be acting as their sponsor. During their stay in Cyprus, the spouse/partner and the sponsor's dependents are not allowed to work or engage in any kind of economic activity in Cyprus.
In the event where the beneficiaries of this programme reside in Cyprus for a period which in total exceeds 183 days within the same tax year, then they will be considered as tax residents in Cyprus – provided they are not tax residents in any other jurisdiction.
- Tax Incentives for Employees
The aim is the expansion of 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 to new residents-employees with employment remuneration over 55,000 EUR;
- 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, corporate entities can also benefit from:
- The Ministry of Finance in considering the possibility of extending the 50% tax exemption for investment in certified innovative companies to corporate investor (currently, this is only applicable to natural persons)
- Grant of a further discount on the Research and Development (R&D) expenses may be deductible from taxable income in an amount equal to 12% of the actual taxable income.
Last but not least, an employee that has completed five years of residency and employment in Cyprus (or in case the employee obtains a Greek language certificate, of four years) can apply for citizenship.
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.