The Government presented the new strategy for attracting skilled workforce and companies in Cyprus on Friday 15 October 2021. This new strategy is mainly focused on high technology, shipping, innovation, and research and development. The new strategy includes a series of incentives concerning residency, taxation, employment and simplification and digitization of the current procedures. The scheme will come into force on the 1st of January 2022.
A glance at the new scheme:
- Amongst others, the Government of Cyprus has presented the new scheme which reflects the following new initiatives:
- Business Facilitation Unit: The business facilitation unit will provide fast-track services to set up a company, VAT, income tax registration and social insurance registration. The unit will give the guidance for the required licenses/permits for operating shops/offices in Cyprus and for the renewal of residence and employment permits. Along with the incorporation of companies in Cyprus, the new business facilitation unit will provide the individuals seeking a residence permit, an efficient package to apply with a centralized guidance as to the services and digitalization of the procedures.
- New Employment Policy for Third Country Nationals: The new policy for the employment of highly skilled third-country nationals will give the opportunity to third-country nationals to be employed by companies of foreign interests, provided that the companies prove their physical presence in Cyprus by establishing suitable independent offices in Cyprus. The policy is mainly targeting the Cyprus shipping companies, high-tech, innovation, pharmaceutical and biotechnology. In order to meet the criteria, the third- country nationals must earn at least €2,500 gross per month, must have a university degree or at least 2 years of experience and a minimum 2-year contract of employment. The duration of residence and employment permits will be 3 years and it is allowed to move their family to Cyprus. It is also worth mentioning that residence and employment permits will be issued within one month.
- Right to Family Reunification of Third-Country Nationals Employed in Third-Country Employment Policy: It is also worth mentioning that the spouses of such third-country nationals who have secured a residence and work permit under the abovementioned scheme, are entitled to direct and free access to the labour market in Cyprus.
- Social Insurance Scheme in Foreign Countries: The Government will be intensifying the procedures to conclude bilateral agreements with third countries, in order to effect the rights of entitlement to Social Insurances Pension Schemes paid or received in Cyprus after their relocation to their country of origin.
- Cyprus Citizenship: The employees will gain the right to apply for citizenship after 5 years of employment and residence in the Republic instead of 7 years or after 4 years if they meet the criteria of holding a recognized certificate of very good knowledge of the Greek Language.
- Digital Nomad Visa: The new Digital Nomad Visa will offer to the employed, self-employed or freelance third-country nationals who work remotely, the right of residence permits for 1 year with the right for renewal for 2 more years subsequently. The third-country nationals will be allowed to move their family to Cyprus as well, however such family members do not have the right to work in Cyprus market. The Digital Nomad Visa holders must earn at least €3,500 per month, have medical insurance and a clean criminal record.
- Tax Exemption: The new scheme provides tax exemption of 50% to new residents/employees with remuneration from employment of at least €55,000. The tax exemption of 50% will be extended for investment in certified innovative companies. Also, the tax deduction for research and development expenses will be increased (at rate of 120% of the actual business income).
The new Strategy for Attracting Investments in Cyprus is part of the Government’s ongoing efforts to attract foreign direct investment, increase jobs and adapt the Cyprus economy to the demands of the new era, the era of sustainable development in a highly internationally competitive environment.
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