The Council of Ministers has approved new incentives for attracting companies to operate in Cyprus and also enable those already operating in Cyprus to expand further their activities in the country. As from 1/1/2022, a “Business Facilitation Unit” (BFU) has been introduced by the Ministry of Energy, Commerce and Industry, which is being used as a single point of contact between potentially eligible companies and the relevant Authorities in Cyprus.

The purpose of the BFU is the fast and efficient processing of requests received from eligible companies. One of the responsibilities of the BFU is the facilitation for the issuance of work permits in Cyprus for third country nationals. More specifically, eligible companies can register with the BFU, as “foreign companies”, in a fast and efficient manner. Once this registration is completed, the relevant companies may proceed with the submission of applications for the issuance of work permits, in respect of their highly skilled employees from third countries.  

The main benefit for registering with the BFU as a foreign company, is that such a company would be able to employ highly skilled third country nationals through a fast track process, by applying for the issuance of work permits, directly to the Civil Registry and Migration Department (CRMD). Through the fast track process, companies can avoid the lengthy procedures undertaken by the Department of Labor for granting approvals of employment for third country nationals, as per the current policy that is in place.

Eligibility criteria for registration with the BFU as a foreign company

1. Eligible businesses must meet one of the following conditions:

  •  The majority of the company’s shares (i.e. >50%) must be owned by third-country nationals.

It is noted that in case where the percentage of the foreign participation in the share capital of the Company is equal to or below 50% of the total share capital, the Company can still be considered as eligible, if the foreign participation in the share capital represents an amount equal to or greater than €200.000. OR

  • Public companies registered on any recognised Stock Exchange. OR
  • Companies which were previously registered with the Central Bank as “offshore” entities.  OR
  • Cypriot Shipping companies.  OR
  • Cypriot High-Tech/Innovation companies.  OR
  •  Cypriot Pharmaceutical companies or Cypriot companies active in the fields of Biogenetics and Biotechnology. OR
  • The majority of the share capital of the company is ultimately owned by persons who acquired the Cypriot citizenship by naturalisation based on economic criteria, provided that the conditions under which they were naturalised continue to be met.

2. Eligible businesses must have offices in Cyprus

Eligible businesses must operate from independent offices in Cyprus, in suitable premises, separate from any private housing or other office, except in the case of business co-habitation.

Important note: Companies already registered with the CRMD as companies of foreign interest, will not have to re-register with the BFU, as the new policy automatically applies to these companies.

Work permits for third country nationals

Once the eligible company is registered with the BFU as a foreign company, a written confirmation will be issued and on that basis the company may then proceed with the work permit applications for its highly skilled employees, directly through the relevant department of the CRMD.

The main requirements for the employment of highly skilled third country nationals through the fast track process, are the following:

  • Minimum gross salary of €2.500 per month;
  • The third country national should be a holder of a university degree or diploma or confirmation of relevant experience in a corresponding employment position for at least 2 years duration;
  • The employment contract should be for a period of at least 2 years.

The work permits should be issued within one month from the date of the submission of the complete application package and be valid for a period of 3 years. 

Important note: The maximum number of third country nationals that can be employed by a foreign company is set at 70% of the total number of all the employees of the company. This limit should be achieved over a period of 5 years, from the date of the enactment of this policy (i.e. 1/1/2022). On that basis the first evaluation of this condition will be undertaken on 1/1/2027.

Family reunification process

Family members of third country nationals that are working for foreign companies, can also apply for residence permits in Cyprus through the family reunification process. 

It should be highlighted that spouses of third country nationals that are working for foreign companies, will have the right to free access of Cyprus’ labor market, for remunerated employment.

How KPMG Cyprus can assist?

KPMG Cyprus has a specialised immigration team that can provide assistance for registering potentially eligible companies with the BFU, in order to employ highly skilled third country nationals.

Moreover, our immigration team can provide custom tailored assistance to such companies by preparing and filing the work permit applications, as well as the residence permit applications, for the highly skilled employees and their family members respectively.

If any assistance or further clarifications are needed for this matter, please do not hesitate to contact our office.

 

George Markides
Board Member
KPMG Limited
Head of Tax Services

Katia Papanicolaou
Board Member     
KPMG Limited
Direct Tax Services            

Michael Halios
Board Member
International Tax Services
KPMG Limited

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Costas Markides
Board Member
KPMG Limited
International Tax Services

Stelios Stylianou
Board Member
Direct Tax Services
KPMG Limited

Michalis Loizides
Board Member
Tax & Legal Services
KPMG Limited

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