Cyprus Introduces New Incentives to Attract Foreign Business

На Кипре вводят новые стимулы для привлечения иностранного бизнеса
15 October 2021 DOM LiVE
3746

On Friday, October 15, a press conference was held at the Presidential Palace in Nicosia with the participation of President Nicos Anastasiades and high-ranking officials.

During the event, Finance Minister Constantinos Petrides announced that the government has decided to introduce a number of incentives to attract new foreign companies to operate or expand their activities to the island.

In particular, according to Petrides, the country is modernizing the Quick Start Mechanism. It will be transformed into a business promotion unit.

Кто сможет участвовать в новой программе:

  • Иностранные компании и организации, действующие в Республике Кипр, или иностранные компании/организации, намеревающиеся работать в Республике Кипр и имеющие независимые офисы на Кипре.
  • Кипрские судоходные компании.
  • Кипрские высокотехнологичные/инновационные компании.
  • Кипрские фармацевтические компании или кипрские компании, работающие в области биогенетики и биотехнологии.

Who will be able to participate in the new program:

  • Foreign companies and organizations operating in the Republic of Cyprus, or foreign companies / organizations intending to operate in the Republic of Cyprus and having independent offices in Cyprus.
  • Cyprus shipping companies.
  • Cypriot high tech / innovative companies.
  • Cypriot pharmaceutical companies or Cypriot biogenetics and biotechnology companies.

The main changes will affect:

Employment of third country nationals

The existing employment policy for third-country nationals will be revised, expanded and simplified. Employment of third-country nationals will be permitted provided that the number of foreign employees in the company does not exceed 30% of the total number of personnel, an employment contract has been concluded between the employer and the employee, duly ratified by the competent authority in accordance with applicable law. The amount of wages will be determined in accordance with the current legislation. The validity period of residence and work permits will be issued for a period of up to 3 years with subsequent renewal.

In addition, spouses of highly qualified third-country nationals who work in Cyprus with a residence and work permit and receive a minimum gross salary of 2.5 thousand euros per month (does not apply to support personnel) will be given the right to legally find employment.

Simplification and acceleration of the procedure for issuing work permits, pensions

Highly qualified third-country nationals will be issued work permits on an expedited basis. In addition, they will be able to expect to receive a pension by intensifying efforts to conclude bilateral agreements with third countries, which are determined by the Ministry of Foreign Affairs, so that when a third country national pays social security contributions in Cyprus when they return to permanent residence. to his country in order to have the right to transfer paid contributions, provided that with these contributions they do not receive any right to an old-age pension, disability pension, etc.

Introductions Digital Nomad Visa

The beneficiaries will be third country nationals who are self-employed/freelancers or employees working remotely using ICT with employers / clients outside Cyprus.

Thanks to such a visa, third-country nationals will be able to stay in the country for up to one year with the right to renew for another two years. They will be able to stay on the island with their family members, who will be issued a residence permit upon request. The validity period of the residence permit will be equal to the validity period of the main applicant.

During their stay in Cyprus, the spouse or partner (for persons in a civil marriage) and minor family members of the sponsor are not allowed to find a job or engage in any form of economic activity in the country. If they have resided in the Republic for one or more periods exceeding a total of 183 days in one tax year, they are considered tax residents of Cyprus, provided that they are not tax residents of any other country.

At the same time, one of the main conditions is the obligation to provide proof that the applicant has enough funds (at least 3.5 thousand euros per month) to cover their living expenses during their stay in the country, without becoming a problem for the national social system.

What can serve as evidence:

  • Employment or work contract,
  • Bank account.

The above amount is increased by 20% for a spouse or partner and 15% for each child.

На Кипре вводят новые стимулы для привлечения иностранного бизнеса

Tax incentives

New highly qualified employees from third countries with a salary of 55,000 euros per year will be exempt from taxes at a rate of 50%. Existing employees with a salary of less than 100 thousand euros per year will have the opportunity to extend the validity of the benefit from 10 to 17 years. Potential beneficiaries of the allowance are persons with an earnings of 55 thousand euros to 100 thousand euros for the remaining 17-year period.

In addition, the island's government is considering the possibility of extending tax incentives for investment in innovative enterprises and increasing the tax deduction for research and development expenditures. If these points are approved, then investors will be able to count on 50% tax exemption when investing in certified innovative enterprises. Eligible research and development costs will be deducted from taxable income at a rate of 120% of actual income.

Naturalization

According to the new plan, foreign employees will be able to apply for citizenship after 5 years of residence and work in Cyprus instead of the current 7. And those who pass the exam in Greek language perfectly will be able to get a passport after just 4 years of living and working in Cyprus.

The innovations will take effect on January 1, 2022.

In conclusion, Petrides mentioned that Cyprus will promote a new scheme to attract qualified employees abroad through various advertising campaigns.
Source: stockwatch.com.cy, philenews.com
Photos: pixabay.com
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