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Cyprus government’s new strategy to attract investors and talents

On 15/10/2021 the Government of Cyprus presented its new strategy for attracting investors and talents in Cyprus. The new strategy aims to render Cyprus a sustainable business and Trade Center in the Middle East region and Europe. The scheme will come into force in January 2022. The new strategy main features are the following:

1. BUSINESS FACILITATION UNIT
The new strategy aims to transform the existing Fast Track Business Activation Mechanism into a Business facilitation Unit.
The main responsibilities of the Unit would be the provision of services for setting up business, guidance/information on the necessary licenses to operate in Cyprus and the acceleration of the issuance and renewal of residence and employment permits. The new Unit would be a central contact point for business providing direct and streamlined assistance. It would also render all the aforesaid procedures wholly digital through an online platform. The scheme entail creating a business facilitation unit that will provide services for setting up companies, VAT and income registration, registration in the Social Insurance Unit. The Unit will also provide guidance for licensing facilities/offices and operating in Cyprus and facilitate the issuance and renewal of residence and employment permits.

2. NEW POLICY FOR THE EMPLOYMENT OF THIRD COUNTRY NATIONALS
This new policy aims to attract highly skilled third country nationals in order to incentivize Cypriot shipping companies, high tech/innovative companies and foreign companies operating in Cyprus or any companies intending to operate in Cyprus to preserve and/or extend and/or to establish their operations in the island.
The new scheme sets as a minimum criterion for hiring a third country national a minimum gross salary of €2.500, university diploma or experience of at least 2 years and an employment contract of minimum two years duration. A Business can employ third country nationals up to 70% of its total employees.
Furthermore, companies can employ support staff from third countries if it does not exceed 30% of all of supports staff and provided that there is a valid contract pursuant to the provisions of the national legislation.
Furthermore, the spouses of third country workers can have immediate and free access to the labour market provided that the gross salary of their financial supporter exceeds €2.500 gross salary (Excluding support staff).

DIGITAL NOMADS
The new strategy introduces a Digital Nomad visa with up to 1000 beneficiaries, who can be employed, self-employed, or freelance third country nationals working remotely. These individuals can reside in the country for up to one year with the right of renewal for another two more years. During the stay in Cyprus, the spouse or partner and the minor members of the family of the financial supporter are not allowed to engage in any form of economic activity in the country.
In order to be eligible for a digital visa, it is necessary to have a employment or project contract, proof of minimum income of €3500 per month and clear criminal record for the country of residence.

TAX INCENTIVES
Tax exemption of 50% to new non domicile employees with employment remuneration of €55,000 and above for a period of 10 years. Tax exemption of 50% for existing non domicile employees with employment remuneration of €100,000 and above for an extended period 17 years. Tax exemption of 50% for existing non domicile employees with employment remuneration between €55,000 & 100,000 -for a period of 10 years.
Furthermore, the Government will examine the possibility of extending the 50% tax exemption for investment in certified innovative companies to corporate investors.
RESEARCH AND DEVELOPMENT
The new proposals also aim to grant an increased discount on research and development costs. Eligible research and developments costs will be deducted from taxable income at a rate of 120% of the actual business income.
CITIZENSHIPS
Employees will have the right to apply for naturalization in case that they have been residing and working in Cyprus for 5 years, instead of 7 that is valid now, or after 4 years if they hold a certificate of very good knowledge of the Greek language.