Cyprus Fast Track Business Activation mechanism

Undoubtedly, the global pandemic has placed an enormous pressure on health care and governments, while demand for digital transformation is increasing in all service industries in Cyprus. Taking this into consideration, the Cyprus Council of Ministers has on the 3rd of September 2020 revised the policy for issuance of temporary residence and employment permits for third country nationals working for companies operating in or from Cyprus.

The Fast Track Business Activation mechanism introduced, aims to attract foreign business in Cyprus as well as to provide fast and efficient services to foreign businesses that are wishing to establish presence in Cyprus. Below we provide a brief on the criteria of the revised policy as well as the application process.

Eligibility Criteria

Companies interested in joining the Fast Track Business Activation mechanism should meet the criteria below, thus contributing positively to the country’s economic growth.

The main criteria are:

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

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

1. Provision of Services for the establishment of a company:

Assisting companies to obtain all necessary registrations for the establishment of a business from a single point of contact, including the following:

• Company registration and name approval
• Registration with the Social Insurance Registry and the Employers’ Registry
• Registration with the VAT Registry and in the Income Tax

 

2. Guidance for establishment and operation of companies in Cyprus

Provision of information for all the necessary permits required by the company in order to start operations.
 

3. Facilitation for the issuance of residence and employment permits in Cyprus

Facilitating the issuing of residence and employment permits in Cyprus for third country nationals.
The Council of Ministers, on the 7^th of October 2020, approved a revision of the Policy for the Issue of Residence and Employment Permits for companies of foreign interests registered in the Republic of Cyprus. The revised Policy defines the criteria on the basis of which facilitation services will be provided for residence and employment permits of third country nationals. This applies to both existing and new companies under conditions.
 
Revised Policy for the issuance of temporary Residence and Employment Permits to third country nationals employed in companies of foreign interests operating in Cyprus

Eligible Companies

In order for companies of foreign interest to employ third country nationals in Cyprus under more favourable provisions, the following should apply:

1. Third country shareholders should own the majority of the company’s shares.

The following cases are excluded:

• Public companies registered in any recognised stock exchange
• Former offshore companies that were operating in Cyprus by approval of the Cyprus Central Bank, before the change of their offshore status.
• Cypriot shipping companies.
• Cypriot companies of high technology / innovation, that will be certified by the Deputy Ministry of Research, Innovation and Digital Policy based on the applicable framework.
• Cypriot pharmaceutical companies or companies operating in the fields of biogenetics and biotechnology.
• Persons who have acquired Cypriot citizenship by naturalization based on economic criteria, given that they will prove that the conditions under which they were naturalized are still met.

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.

2. Foreign direct investment of at least € 200.000, for the purposes of operating the company in Cyprus.

3. The establishment/ operation of independent offices in Cyprus, in suitable premises, separate from any private housing or other office, except in the case of business co-habitation.

Staff Categories

Companies that meet the above conditions, are entitled to employ third country nationals in the following categories, provided that they first obtain temporary residence and employment permits.

1. Directors:

In this category the following third-country nationals are included:

• Directors or Partners registered with the Registrar of Companies and Official Receiver,
• General Managers of branches and of subsidiary companies of foreign companies
• Departmental Managers
• Project Managers

The minimum acceptable gross monthly salary for Directors is €4.000, which may be adjusted from time to time, depending on fluctuations in the wage index.

Five (5) is the maximum number of third country nationals that can be employed under this category, unless the Civil Registry and Migration Department is satisfied that the employment of a greater number is justified, depending on the circumstances of each company.

2. Middle management executives and other key personnel:

In this category, the following third country nationals are included:

• Upper / middle management personnel
• Other administrative, secretarial or technical staff

The minimum acceptable gross monthly salary for this category is €2.000, which may be adjusted from time to time, depending on wage index fluctuations.

Ten (10) is the maximum number of third country nationals that can be employed under this category, unless the Civil Registry and Migration Department is satisfied that the employment of a greater number is justified, depending on the circumstances of each company.

3. Specialists

Companies are entitled to employ third country nationals in professions / with skills as listed in Table 1. The number of employees that may be employed by each company will be determined based on its turnover, as described in Table 2.
The minimum acceptable gross monthly earnings for Specialists is €2.000, an amount that can be adjusted from time to time, depending on fluctuations in the wage index.

Professions / Skills

1. Software and System Engineers
2. Application and Data Architects
3. ICT and Enterprise Solution Architects
4. Technical Assurance Professionals
5. Telecom and Space Engineers
6. Data scientists
7. Machine Learning Engineers
8. Web Developers and designers
9. UX User Experience Professionals
10. Quantitative Analysts
11. Quality Assurance Analysts
12. Mobile Application Developers
13. Augmented Reality/ Virtual Reality Programmers
14. Digital Marketing Specialists
15. Video Production Multimedia Specialists for Mobile Apps and Software
16. Analysts for Mobile Apps and Software
17. Designers of Prototype for Mobile Devices
18. DevOps Engineers
19. Cyber Security Specialists
20. Artificial Intelligence, Robotics and Big Data Specialists
21. Pharmaceutical Formulation Technologists
22. Pharmaceutical Engineer Validation Specialists
23. Pharmaceutical Patents Specialists
24. Pharmaceutical Regulatory and Quality Assurance Professionals
25. Marine Engineers
26. Naval Architects

 
The maximum number of third-country nationals that may be employed in this category is shown in Table 2 below:

Turnover	Number of Employees	Application Examination Timeline
≤€1 Million	Up to 5	4 weeks
>€1 to €3 Millions	Up to 10	4 weeks
>€3 to €5 Millions	Up to 20	4 weeks
>€5 to €10 Millions	Up to 30	4 weeks
>€10 to €20 Millions	Up to 50	4 weeks
>€20 to €30 Millions	Up to 100	6 weeks
>€30 Millions	100 to 200	6 weeks

 
Companies already registered in the Register of Foreign Companies of the Civil Registry and Migration Department, are considered eligible and can automatically benefit from the Policy for employment of third country nationals in the Specialists’ category.

4. Support staff:

All third country nationals not included in the above categories. A company may employ third country nationals in posts in this category by following the General Employment procedure, by first securing the positive recommendation (sealed employment contract) of the Department of Labour.

Given the market test by the Department of Labour, a company may staff up to 30% of its total personnel with third country nationals in posts in this category. The market test is not necessary for third country nationals with free access to the labour market.

Exceeding the maximum allowed number of employees from third countries in each category
For employing a greater number of third country personnel under the above categories, duly justified and documented requests by the company must be submitted to the Department. The requests must include information on the salary offered as well as:

• The company’s turnover
• The ratio of third country employees to Cypriots / EU Nationals and
• The company’s operating time in Cyprus.

In order to exceed the limit of more than 300 third country nationals employed in categories 1-3 above, the consent of the Council of Ministers is required.
 
 
Benefits of Companies under the Policy:

• There are no restrictions on the maximum duration of stay of third country nationals under this category of stay in the Republic (Directors, Key Personnel, Specialists).

• It is not required to secure a sealed employment contract from the Department of Labour for third-country nationals under the Categories of Directors, Key Personnel and Specialists, as defined above.

• Third country nationals with residence and employment permits under this Policy have direct access to family reunification with their family members (spouse and minor children), provided that the relevant conditions of the Aliens and Immigration Law, Cap.105 as amended, are met.

• The issuance of a temporary residence and employment permit under the abovementioned categories of stay (Directors, Key Personnel, Specialists) is allowed when the entry of the third county national into the Republic was made with a visa and not by previously securing an entry permit from the Civil Registry and Migration Department.

 
Submission of Application
Businesses expressing interest in transferring their operations to Cyprus and wishing to benefit from the above provisions should submit a request to MECI accompanied by:

• A letter of expression of interest in establishing presence in Cyprus (in the case of companies not already operating in Cyprus). Press here for information that should be included in the letter.

 

• The certificate of incorporation of the company, shareholder certificate and articles of association (in English or Greek), Directors Certificate

 

• Audited Financial Accounts for the 3 of the last 5 years (only in the case of existing companies operating abroad and wishing to set-up presence in Cyprus)

 

• Business plan for the next 5 years (only in the case of completely new businesses which do not have presence abroad and wish to set up presence in Cyprus)

 
It is noted that Due Diligence Checks will be conducted for all companies wishing to join the Fast Track Mechanism.
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