Introduction
Cyprus has become a highly attractive destination for international businesses looking to establish or expand their operations. Generally, companies in the Republic of Cyprus are required to prioritise the employment of Cypriots and EU nationals before considering third-country nationals. However, Cyprus offers a notable exception for companies of foreign interest, allowing them to employ third-country nationals subject to specific requirements. This framework is particularly advantageous for third-country nationals who wish to incorporate their own company in Cyprus.
Additionally, a new amendment to the Civil Registry Law facilitates naturalisation for highly skilled professionals, making Cyprus even more appealing for international talent.
This guide provides an overview of the eligibility criteria for both companies and employees , as well as the conditions for registration for foreign interest companies in Cyprus. By understanding and meeting these requirements, businesses can successfully navigate the registration process and fully capitalise on the opportunities Cyprus offers.
Eligible Companies for Registration as a Cyprus Company of Foreign Interest
To qualify for registration as a Cyprus company of foreign interest, a company must meet one of the following criteria:
- Ownership by Third-Country Nationals: The majority of the company’s shares are owned by nationals from non-EU countries.
- Significant Foreign Participation: If third-country nationals own 50% or less of the company’s shares, the foreign investment must be at least €200,000, in addition to the initial investment of €200,000 referred to below.
- Public Companies: Registered on any recognised stock exchange.
- International Activity Companies: Previously offshore companies recognised by the Central Bank.
- Cypriot Shipping Companies.
- *High-Tech/Innovation Companies: Recognised as such within Cyprus.
- Pharmaceutical or Biotechnology Companies: Active in biogenetics or biotechnology.
- Companies with Naturalised Cypriot Shareholders: Majority ownership by individuals who acquired Cypriot citizenship through economic criteria, maintaining the conditions for naturalization.
- Cypriot Private Institutes of Tertiary (Higher) Education licensed by the Ministry of Education, Sport and Youth.
* An enterprise qualifies as ‘High Technology Company’ if:
- it is already established and has a presence in the market, and
- it has a high level or experimental R&D intensity, and
- it developed product/s that fall into one of the following categories: products related to aviation and space industry, computers, information and telecommunication technology (ICT), pharmaceuticals, biomedical, research and development equipment, electrical machinery, chemicals, non-electrical machinery.
Conditions for Registration
To be eligible for registration as a foreign interest company, companies must adhere to the following conditions:
- Investment Requirements: The ultimate beneficial owner (UBO) must deposit €200,000, legally transferred from abroad, into a company account in a credit institution licensed by the Central Bank of Cyprus (excluding payment institutions). Alternatively, the company can provide evidence of an investment of €200,000 for operational purposes in Cyprus, such as office purchases.
- Operational Premises: The company must operate from independent offices in Cyprus, suitable for its business activities.
Employee Eligibility
Employing third-country nationals in a Cyprus company of foreign interest requires compliance with specific guidelines. Employees are divided into the following categories:
(a) Highly Paid Employment (Highly Skilled Employees):
- Minimum Salary: €2,500 per month.
- Employment Duration: Minimum of two years.
- Qualifications: Relevant academic qualifications or at least two years of experience in a related position.
Note: Third-country nationals who already hold residence and employment permits at the Key Personnel level of companies of foreign interests, with a monthly gross salary of €2000 or more, will continue until 31.12.2026, to renew their residence permit at the same employer without an increasing their payroll.
(b) Employment at the Supportive Level:
Unlike highly paid employment, a labour market test and a sealed contract by the Department of Labour are necessary for employment at a supportive level. The process involves advertising the job vacancy locally and providing evidence that no suitable local candidates were found.
Additionally, all companies must commit that 30% of their total staff are Cypriots/EU citizens over a period of five years. If a company does not adhere to the 70:30 ration, the case will be evaluated on its own merits and put before the management for an administrative decision.
Validity of Temporary Residence and Employment Permits
Permits will be issued within one month and can be valid for up to three years, based on the employment contract duration, with the possibility of renewal.
Family Reunification
Highly skilled employees (meeting the criterial of Highly Paid Employment) in companies of foreign interest are entitled to immediate family reunification rights. This provision allows their spouses and minor children to enter and reside in Cyprus without delay.
The application process for family members is streamlined to ensure they can join the primary employee quickly and efficiently, facilitating a smoother transition for the family as a whole.
Spouses and partners in civil unions of employees of foreign interest companies have unrestricted access to paid employment under the same terms and conditions as the sponsoring employee, but they are not permitted to engage in self-employment.
Naturalization by Years of Residence of Highly Skilled Professionals under the New Legislation
On 19 December 2023, an amendment to the Civil Registry Law was published in the Official Gazette of the Republic of Cyprus. The new legislation allows highly skilled foreign employees in eligible companies to obtain Cypriot citizenship if they have resided in Cyprus for four or five years, depending on their Greek language proficiency.
Requirements for Highly Skilled Foreign Employees to Apply for Cypriot Citizenship:
- Greek Language Proficiency: Applicants must pass a Greek language test, either Level A2 or B1, depending on their years of residence. The test is the Greek Language Certification Exams, conducted by the Greek Language Center of Greece, through the Examinations Service of the Ministry of Education.
- Continuous Residence: Applicants must have legally and continuously resided in Cyprus for 12 months before submitting their application, with an allowance for absences of up to 90 days during this period.
- Previous Residence Period: Before the aforementioned 12-month period, applicants must have resided in Cyprus for at least five years (if they have passed the Greek Language test at Level A2) or at least four years (if they have passed the Greek Language test at Level B1) within the previous ten years. Periods of absence from Cyprus not exceeding 90 days per year do not interrupt this required period.
- Knowledge of Cyprus: Applicants must demonstrate adequate knowledge of the basic elements of modern political and social realities in Cyprus. This is evidenced by obtaining a Certificate of Success from an examination conducted by the Examinations Service of the Ministry of Education.
- Good Character: Applicants must have a clean criminal record and show adherence to legal and ethical standards. This includes not having shown contempt for the law or the Republic of Cyprus, not being sentenced for serious crimes, not being wanted by EUROPOL or INTERPOL, and not being under UN or EU sanctions.
- Suitable Housing and Stable Income: Applicants must have appropriate living conditions and a stable, consistent income.
- Intention to Reside: Applicants must genuinely intend to reside in Cyprus.
Family Members’ Eligibility: Family members (minor children, spouses, partners in civil union, and dependent adult children with disabilities) of the applicant are also entitled to apply for Cypriot citizenship, provided they meet the residence requirements. Spouses must pass the same Greek language test as the applicant, while children are exempt from this requirement.
Conclusion
Cyprus offers a compelling environment for companies of foreign interest looking to establish or expand their operations. With clear eligibility criteria, favorable employee eligibility guidelines, and a strategic framework designed to attract international businesses, Cyprus stands out as a prime destination for investment. The recent amendments to the Civil Registry Law further enhance Cyprus’s attractiveness by providing a clear path to citizenship for highly skilled professionals. By meeting the outlined conditions and leveraging the benefits available, businesses can enjoy a seamless registration process and a thriving operational environment.
Should you require any assistance with the registration process or need further information on how to establish your business in Cyprus, please do not hesitate to contact us. Our team of experts is here to support you every step of the way, ensuring that your business transitions smoothly and efficiently into the Cypriot market.
This article is for general informational purposes only and should not be construed as legal advice