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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.

The Business Facilitation Unit (BFU) mechanism which has been approved by the Council of Ministers on the 15th of October 2021, 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 in key positions, while at the same time their family members can be granted Cyprus residence permits.

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

Eligible Cyprus companies are all foreign interest companies in which third-country nationals own the majority of the company’s shares. Also, 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.

Employment of third-country nationals in Cyprus

The Business Facilitation Unit (BFU) mechanism also introduces new criteria regarding the employees of foreign interest companies. As of January 2022, there will be no categorization of the personnel of the company. Employees of foreign interest companies are now titled “high skilled employees” and they can apply for residence permit for up to 3 years given that:

  1. They will be paid a minimum gross monthly salary of at least €2,500.
  2. They hold a university diploma or degree or equivalent qualification or confirmation of relevant experience in a corresponding job of at least 2 years duration.
  3. They have an employment contract of not less than two years duration.

During the period of 5 years, from the date of joining the BFU, the maximum number of third country nationals that can be employed in a foreign interest company is set at 70% of all employees. When the said period comes to an end, in cases where it is impractical to employ 30% of Cypriot workers the matter will be examined on a case-by-case basis.

In addition to the above, the current legislation for family reunification is still in force and will apply to any third country national who has obtained a residence permit in accordance with the above criteria. This will provide immediate and free access to the labour market, with remunerated employment for the spouse of a high skilled third country national.

Moreover, the company can also employ third country nationals as support staff (with a gross monthly salary of less than €2500), given that the percentage of this staff will not exceed 30% of the total support staff. An employment contract between the third country national and the employer duly validated by the competent authority, will also have to be in place.

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.