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CYPRUS

Business Relocation to Cyprus – Relocate your Company to Cyprus

Company Relocation to Cyprus

Our Law Firm offers quick and efficient assistance in relocating your company to Cyprus along with staff and family members.

Firstly, we need to consider wether your company is eligible for the Fast Track Business Activation (FTBA) mechanism.

The Fast Track Business Activation (FTBA) mechanism which has been approved by the Council of Ministers on the 3rd of September 2020, aims to provide fast and efficient services to companies that wish to establish presence or move their operations to Cyprus.

Under this new policy and as the name denotes, eligible companies can enjoy faster completion of all related procedures including the incorporation of the company, social insurance and VAT registration as well as obtaining the necessary residence and employment permits for their personnel.

Additionally, under this scheme companies are enabled to hire an increased number of staff (up to 200 employees) in key positions, while at the same time their family members can be granted Cyprus residence permits.

Companies interested in joining the Fast Track Business Activation mechanism should meet the following criteria:

  • Companies should have a physical presence in Cyprus including establishment/operation of independent offices that are separate from any private residence.
  • Existing companies should have a minimum turnover of €500.000 per year for 3 out of the last 5 years.
  • New companies should provide a reliable 5-year business plan illustrating growth potential.


The Fast Track Business Activation scheme is operated by the Ministry of Energy, Commerce and Industry and includes the following services:

  • Provision of Services for the establishment of a company including company registration and name approval, registration with the Social Insurance Department, VAT and Income Tax registration.
  • Guidance for the establishment and operation of companies in Cyprus and provision of information for all the necessary permits required by the company in order to start operations.
  • Facilitation for the issuance of residence and employment permits in Cyprus for third country nationals.

Should your company not qualify for the FTBA mechanism, then we will proceed with the normal structuring and set up of the company. The same outcome will be achieved but will take slightly longer.

Employment of third-country nationals in Cyprus

For the employment of a third-country national in Cyprus, a temporary residence and employment permit is necessary. To achieve these via a corporate set up, the following criteria must be satisfied.

Eligible Cyprus companies for the employment of a third-country nationals

  1. Third country shareholders should own the majority of the company’s shares. In the case where companies are the shareholders, their final owners (natural persons who are the ultimate beneficial owners) should be declared, in order to receive the approval of the Civil Registry and Migration Department.
  2. Foreign direct investment from the ultimate beneficial owner of at least €200.000 in Cyprus, for the purposes of operating the company in Cyprus. This requirement only applies to companies which will employ staff from third countries for the first time. The paid-up capital of €200.000 can either be a payment made into a bank account or an investment in a company asset such as immovable assets and/or rents and/or the cost of any equipment for the needs of the company. If the percentage of foreign participation in the company’s share capital is equal to or less than 50% of the total share capital, in order for the company to be considered as eligible, then the foreign participation should represent an amount equal to or greater than the amount of € 200.000.
  3. The company should operate on its own self-contained offices in Cyprus in suitable premises, separate from any private housing or another office, except in the case of business co-habitation.

Staff Categories

1. Directors – Minimum acceptable gross monthly salary for Directors is €4000.  Maximum number of 5 persons for this category.

2. Middle Management Executives and other Key Personnel (This category includes the upper/middle management personnel and the other administrative, secretarial or technical staff) – Minimum acceptable gross salary amount is  €2.500 Euro and the maximum number of persons for this category is ten (10).

3. Specialists (Companies are entitled to employ third country nationals in professions and/or with skills relevant to the Company’s operating activities) –  The minimum acceptable gross salary amount for this category is €2.500 Euro.

4. Support Staff –  There is no maximum number for the employment of third-country nationals under this category, provided that the necessary approvals from Department of Labour have been obtained.

 

Advantages of relocating your company to Cyprus.

Cyprus does offer many advantages both for the company and its employees including:

  • Low corporate tax rate of 12,5% on profit, one of the lowest within the EU with possibility to enjoy a much lower effective tax rate.
  • No withholding tax on dividends paid to non-residents shareholders.
  • No withholding tax on interest paid from Cyprus.
  • No tax on dividend income received from another Cyprus tax resident company.
  • No tax on dividend income received from abroad, unless the foreign country allows the dividend paid as a tax deduction/ expense.
  • No withholding tax on royalties paid from Cyprus in respect of intellectual property exploited outside Cyprus.
  • Exemption on disposal of securities (e.g. shares, bonds, debentures).
  • Profits of a Permanent Establishment exempt from tax under certain criteria.
  • No inheritance tax.
  • No taxes on entry, reorganisations and exit.
  • Unilateral credit relief for foreign taxes.
  • Extensive Tax Treaty network with more than 60 countries.

Taxation of Cyprus Company Employees

Regarding the taxation of the company employees (salary taxes), for an individual tax resident of Cyprus, tax is levied on all gains or profits from any office or employment exercised in Cyprus or abroad. Foreign-source income from employment is not taxed if the recipient spends at least 90 days in any calendar year outside Cyprus. This is known as the “90-day rule.”

For an individual who is a non-tax resident of Cyprus, tax is levied on gains or profits from any office or employment exercised in Cyprus only.

The individual tax rates are

  • 0 to 19,500 = 0%
  • 19,501 to 28,000 = 20%
  • 28,001 to 36,300 = 25%
  • 36,301 to 60,000 = 30%
  • 60,000+ = 35%

Our team of lawyers know and understand the requirements needed in relocating an existing business to Cyprus. We will create the correct corporate structure to enable you to operate your business from Cyprus with full confidence and in the minimum time frame.

Our Company Relocation Services

Our business relocation services include:

  • Corporate set-up including legal, tax, accounting, audit and banking.
  • Operational infrastructure.
  • Residence and work permits for company personnel and family members.
  • Identification and vetting of new premises.
  • Legal & conveyancing for property rental or purchase.

Business Relocation to Cyprus

See how our lawyers can help you with relocating your company to Cyprus.