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Business Relocation to Cyprus – Relocate your Company to Cyprus

Company Relocation to Cyprus

Our Law Firm offers comprehensive assistance for companies seeking to relocate to Cyprus, including their staff and family members.

With the recent amendments to Cyprus’ immigration legislation, the government is committed to increasing the country’s appeal as an international high-growth business centre and tech-hub. These changes enable eligible companies in certain industries to establish their operations in Cyprus with ease, expand their activities in the country, and employ non-EU citizens.

The new regulations offer more favourable conditions for non-EU investors, and a dedicated infrastructure has been set up to streamline the registration process for eligible companies.

Furthermore, family members of non-EU citizens who work for eligible companies can apply for residence permits in Cyprus through the family reunification process. Additionally, spouses of non-EU citizens working for eligible companies have the right to free access to Cyprus’ labour market for remunerated employment.

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

Eligible companies must meet at least one of the following criteria:

  • Cypriot pharmaceutical companies or Cypriot companies active in the fields of biogenetic and biotechnology;
  • Cypriot high-tech/innovation companies with a presence in the market and a high level of experimental R&D intensity, developing products related to aviation and space industry, computers, electronic and telecommunication products, pharmaceuticals, biomedical, research and development equipment, electrical machinery, chemicals, or non-electrical machinery;
  • Companies with the majority of shares owned by non-EU citizens. Where the percentage of foreign participation in the share capital of the company is equal to or below 50% of the total share capital, then the company is eligible if the foreign participation represents an amount of at least €200.000;
  • Cypriot shipping companies; or
  • Public companies registered on any recognised global stock exchange.

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.

As of November 30, 2022, the company must also demonstrate an initial investment of at least €200,000.

This sum must originate from a personal or other corporate account that is linked to the UBO of the company and be deposited into the company’s corporate account in Cyprus.

The company will need to keep the money invested in Cyprus and utilise it only for company-related activities.

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.

Employment of third-country nationals in Cyprus

Once an eligible company has been registered, it can proceed with the submission of applications for the issuance of work permits for highly skilled employees from non-EU countries and their families. These work permits will be issued within one month from the date of the submission of the completed application documents and will be valid for a period of 3 years.

To further ease the employment of non-EU staff, eligible foreign companies are allowed to hire a maximum of 70% of non-EU citizens as their total number of employees. However, this limit must be achieved over a period of 5 years, from the date of the enactment of the new regulations (i.e., 1/1/2022). The first evaluation of this condition will be undertaken on 1/1/2027.

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.

Additionally, eligible companies provide an opportunity for family members of non-EU citizens working for them to apply for residence permits in Cyprus under the family reunification process. Spouses of non-EU citizens employed by eligible companies are entitled to unrestricted access to Cyprus’ labour market for paid employment.

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.

Tax incentives for employees

Two tax exemptions are available for employees commencing their first-time employment in Cyprus.

A 20% tax exemption is granted on remuneration, up to a maximum of €8,550 per annum, for employees who were not Cypriot residents for at least three consecutive years and were employed by a non-Cypriot resident employer prior to their employment in Cyprus. This exemption applies for seven years, regardless of the tax residency status of the employee or employer.

A 50% tax exemption is available for employees with an annual remuneration of at least €55,000 who were not Cypriot residents for 10 consecutive years prior to their employment in Cyprus. This exemption applies for 17 years. Employees who commenced their first-time employment before January 1, 2022, may also qualify for the 50% tax exemption, subject to certain eligibility criteria.

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.

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.

Company Relocation to Cyprus

Business Relocation to Cyprus

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