On the 15th of October, the government of Cyprus presented its new strategy for attracting businesses to Cyprus. Emphasis was given on high technology, shipping, research, and development as well as innovation, in order to transform the island into a business and trading center in the European region.
The implementation of this new strategy will commence in January 2022.
The main pillars of the new strategy can be found below.
1) Creation of a Business Facilitation Unit for new companies who are operating or would like to be established and operate in Cyprus. The purpose of this unit is to help the companies navigate through the bureaucracy of creating and registering the company as well as getting the necessary permits for its employees.
2) Amendment of the International Business Companies policy for Companies that will be part of the newly established Business Facilitation Unit
a) Salary/position-based categories of employment (Directors, Key Personnel, Specialists) will no longer apply and a general Minimum salary of 2.500 euro will be introduced for all highly skilled employees if they have the required academic skills or at least 2 years of experience.
b) The validity of the residence and work permit can be up to 3 years.
c) Α Maximum number of Non-EU Nationals can be up to 70% of the total number of employees in a 5-year period from the date of the inclusion of the Company to the Business Facilitation Unit.
d) Companies will be able to employ Non-EU Nationals as supporting staff, with salaries below 2.500 euro, with a maximum of 30% of the total supporting staff of the entity.
3) Spouses of Non-EU Nationals that are employed in a Company operating under the provisions of the Business Facilitation Unit will have full access to employment as an employee.
4) The DIGITAL NOMAD VISA will be introduced. This visa will have a maximum application quota of 100 applications and will not provide employment rights for the holders of this permit. This new type of visa targets non-EU nationals who are either self-employed or freelancers working remotely, who would like to live in Cyprus. The visa is valid for 1 year and can be renewed for another 2 years.
5) The period for naturalization for Non-EU Nationals employed in Cyprus is reduced from 7 to 5 years and for holders of certification for very good knowledge of the Greek Language this period is further reduced to 4 years.
6) Aiming to simplify the process and expedite the examination of the applications for the Immigration permits, the Ministry of Interior will amend the relevant Regulations of the Aliens and Migration law.
7) Extension of the current Income Tax exemption of 50% to new residents-employees with employment income exceeding €55.000 instead of €100.000 and for 17 years instead of 10 years. Existing beneficiaries of the scheme should be able to extend the benefit from 10 to 17 years. Potential beneficiaries with income (€55K- € 100K) for the remaining period of 17 years.
8) Consideration of the possibility of extending the tax exemption of 50% for investment in certified innovative companies and by corporate investors. The current tax exemption, which was applicable until 30th June 2021, allowed the tax exemption only to individuals.
9) Proposal for granting an increased tax deduction on research and development (R&D) expenses (e.g. by 20%). Eligible R&D expenses will be deducted from taxable income equal to 120% of the actual R&D expenses.
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If you want to work with professionals who provide exceptional quality standards of services in Cyprus, the simplest way is to fill in the contact form below.
We will take you through a step by step process from A to Z in creating the perfect business structure in Cyprus.
Can’t wait any longer? Become even more successful by working with accountants you can count on and be among the thousands business that already did.