Hiring Non-EU Employees for Your Company in Cyprus

Cyprus, with its favourable business environment and strategic location, is an ideal hub for companies seeking to hire international talent. Whether you’re looking to hire non-EU employees for specialised roles or executive positions, or you are a foreign-interest company expanding operations in Cyprus, understanding the legal framework is crucial to ensuring compliance with Cyprus’s immigration and employment laws.

At Chambers & Co, we specialise in guiding businesses through the legal requirements of hiring non-EU nationals, ensuring you meet all necessary regulations and can access the best talent globally.

Why Cyprus?

Cyprus offers a favourable business environment with a robust legal framework and tax incentives for foreign businesses and employees. The strategic location of the island, combined with its European Union membership, makes it an attractive hub for businesses targeting European, Middle Eastern, and African markets. Additionally, the island’s high standard of living, excellent infrastructure, and beneficial tax regimes for non-domiciled residents further attract global talent to relocate and work in Cyprus.

Additionally, Cyprus offers several pathways to hire non-EU employees, whether your company is locally registered, a foreign-interest entity, or part of a multinational corporation transferring employees.

Legal Framework for Hiring Non-EU Nationals

Cyprus has a well-defined legal framework governing the hiring of non-EU nationals, with key regulations including:

  1. The Aliens and Immigration Law (Cap. 105): Governs the entry, stay, and employment of third-country nationals.
  2. The Employment of Third-Country Nationals Regulations of 2021: Sets out the procedures for work permits and employment for non-EU nationals.
  3. Law on the Employment of Non-EU Nationals in Foreign-Interest Companies: Offers streamlined procedures for companies that qualify as foreign-interest entities.

Pathways for Hiring Non-EU Employees in Cyprus

There are multiple legal avenues through which businesses can hire non-EU employees in Cyprus. Below are the primary options:

1. General Employment for Non-EU Nationals

This category applies to non-EU nationals hired for positions that do not fall under highly skilled or executive roles. The process is detailed and subject to several conditions:

  • Labour Market Test: Before hiring a third-country nationals (TCNs), employers are usually required to advertise the position locally to prove that no EU or local candidate is suitable for the job.
  • Employment Contract: The contract must comply with Cyprus labour laws, including salary, working hours, and other employment terms.
  • Secure Work Permit: The employer must apply to the Department of Labour for a work permit. Supporting documents such as the job description, employment contract, and proof of the labour market test must be submitted.
  • Minimum Salary: The minimum gross salary requirement is typically set at EUR 2,000 per month, although this can vary depending on the sector and role.

This is the most common route for hiring non-EU nationals in entry- to mid-level positions, provided all requirements are met.

2. Highly Skilled Employment

The Cypriot government encourages the recruitment of highly skilled third-country nationals by offering simplified work permit procedures under the Cyprus Fast-Track Business Activation (FTBA) scheme and the Cyprus Startup Visa Scheme. For high-level positions, such as managers, directors, or technical specialists, companies may bypass certain labour market restrictions.

  • Highly Skilled Workers: Employees must hold a recognised qualification, such as a university degree or a specialised professional certificate, and have experience in a relevant field.
  • Minimum Salary Requirement: The gross salary for highly skilled employees must typically exceed €2,500 per month.
  • Exemptions from Labour Market Test: Highly skilled employees are generally exempt from the labour market test, allowing employers to hire them more quickly.
  • Combined Work and Residence Permit: Companies can apply for a combined work and residence permit through a single application, simplifying the administrative process.

3. Foreign-Interest Companies

For companies with significant foreign ownership, Cyprus offers an expedited process for hiring non-EU employees. Foreign-interest companies are defined as companies where non-Cypriots hold more than 50% of the company’s shares. These companies benefit from:

  • Exemption from the Labour Market Test: Foreign-interest companies do not need to conduct a labour market test, allowing them to hire non-EU nationals directly.
  • Minimum Investment: The foreign shareholders must invest at least €200,000 in the company, which can be in the form of capital, real estate, or assets.
  • Simplified Work Permit Process: Foreign-interest companies enjoy a fast-track application process for obtaining work permits for their non-EU employees.

To qualify, the company must register as a foreign-interest company with the Migration Department and demonstrate its financial viability, including maintaining office premises in Cyprus.

4. Intra-Company Transfers

Multinational corporations with branches or subsidiaries in Cyprus can transfer non-EU employees to their Cypriot operations through an intra-company transfer. This process allows for easier mobility of specialized staff within the same corporate group.

  • Position Requirements: The employee must hold a managerial or technical position within the parent company and must have worked with the company for at least 12 months before the transfer.
  • Permit Application: The employer in Cyprus applies for a work permit for the transferred employee. This process generally bypasses the labour market test, making it faster for multinational companies to relocate staff to Cyprus.

Step-by-Step Process for Hiring Non-EU Nationals

Whether you are hiring through the general employment route, foreign-interest company pathway, or highly skilled category, the steps involved are similar. At Chambers & Co, we ensure that each step is handled with precision and in compliance with Cypriot law.

Step 1: Company Registration

Your company must be registered with the Cyprus Registrar of Companies and, if applicable, with the Migration Department as a foreign-interest entity. If you are a foreign-interest company, you must demonstrate a minimum investment of €200,000 and have physical premises in Cyprus. At Chambers & Co, we offer a full range of corporate services, from company registration to legal compliance, ensuring your business operates smoothly while expanding its workforce internationally.

Step 2: Submit the Work Permit Application

The employer submits a work permit application to the Department of Labour on behalf of the non-EU employee. The application must include:

  • A valid passport copy of the employee
  • Proof of employment contract
  • Evidence of qualifications and professional experience
  • Documentation related to the labour market test (if applicable)
  • Proof of company registration and compliance with Cypriot laws

Step 3: Issuance of Work Permit and Residency Permit

Once the work permit is approved, the non-EU employee must apply for a Temporary Residence Permit (Pink Slip). This requires:

  • A valid work permit
  • Proof of accommodation in Cyprus
  • Health insurance coverage
  • A clear criminal record from the employee’s home country

Step 4: Ongoing Compliance and Renewals

Work and residence permits are usually valid for one to two years and must be renewed before expiration. At Chambers & Co, we manage the renewal process, ensuring compliance with Cyprus’s employment and immigration laws.

Tax and Legal Compliance for Non-EU Employees

Employers in Cyprus are required to comply with local tax laws and social insurance obligations, which include:

  • Income Tax: Non-EU employees are subject to Cypriot income tax, with rates starting at 20% for annual income above €19,500.
  • Social Insurance Contributions: Employers must contribute 8.3% of the employee’s salary to the social insurance fund.
  • Health Insurance: Non-EU employees must be registered under the General Healthcare System (GESY), with employers contributing 2.9% of the employee’s salary toward healthcare.

Conclusion

Hiring non-EU employees in Cyprus offers significant opportunities for companies seeking to tap into the global talent pool. With multiple pathways available—whether through general employment, highly skilled positions, foreign-interest company exemptions, or intra-company transfers—there is a solution for every business. At Chambers & Co, we specialise in guiding companies through each step, ensuring compliance and providing tailored legal solutions that align with your business objectives.