Cyprus offers various routes and schemes for Non-EU individuals to becoming a Cyprus resident. Attracting foreign direct investment and new businesses are one of the country’s main strategies. Cyprus government have implemented in the last years the following:
1) Cyprus Start-Up Visa
2) Temporary visa when setting up a Cyprus Foreign Interest Company (FIC)
Once a foreign national meet the requirements of any of the three options stated above, then they will be able to enjoy all the benefits that come along with gaining a Cyprus residency. From living in a low crime, high quality, warm climate country to benefiting in both a personal and a business level from the country’s favourable tax system.
Details on each of the above options and routes are listed below:
Cyprus “Start-Up Visa”
Cyprus has implemented a new scheme – the Cyprus Start-Up Visa – aiming to attract entrepreneurs from Non-EU countries to reside and work in Cyprus. This also acts to the island’s advantage since new talent is brought in and the country gains from the development of such innovative businesses.
Start-Up Visa is split into two different categories:
- Individual start-up visa
- Team start-up visa
Individual Start-Up Visa
Criteria for a Non-EU individual to qualify and obtain visa:
- The individual must be the sole founder of the Start-Up;
- The individual must have access to capital of at least €20,000. This amount can include crowd-funding, capital funding etc.;
- The founder must have high level of knowledge in either the English or the Greek language and hold an undergraduate degree or any professional qualification that is equivalent to such a degree;
Team Start-Up Visa scheme
Criteria for a group of non-EU individuals to qualify and obtain visa in Cyprus as a team:
- The team must consist of a maximum of 5 founders or at least 1 founder and the rest of the team be part of management, again not exceeding the maximum of 5 individuals;
- Team members must hold at least 50% of the total shares of the company;
- Team must have access to a capital of €10,000 (in case of one founder) and €20,000 (in the case that the team has more than one founder). Again, capital can be obtained from crowd-funding, capital funding etc.;
- All members of the team must have excellent knowledge of either the Greek of the English language and at least one team member must hold an undergraduate degree or a qualification equivalent to such a degree;
In order for individuals or a team to obtain such a Start-up visa, they must ensure that their innovative business qualifies for this scheme. The requirements are listed below:
- Firstly, 10% of the total operating costs of the business must go against Research and Development. In the event that this is a pre-existing business, then this criterion is confirmed by an external auditor. This criterion must be met for at least 1 of the last 3 years of operation of the business;
- In the event that this is a new business, then the above stated requirement of 10% of total operating costs being research and development will be analysed and confirmed through a business plan. It is important to note that the business plan must state that the head offices will be in Cyprus and the company will be tax domiciled.
A few key benefits that individuals or teams can enjoy if they following this scheme are listed below:
- Hold the right to residence in Cyprus for one year, with the possibility of extending for another year;
- Direct access to EU markets, EU workforce and grants;
- Right to self-employment and/or paid employment from the company registered under the start-up scheme;
- Benefit from Cyprus’s favourable tax system and legal structure that is greatly based on the UK law;
If the start-up is held successful, then residence in Cyprus may be extended without any time restraints. Along with this, the founders will also be able to enjoy family reunification and employ other individuals from non-EU countries without previous approval from the Department of Labour to work for their business.
Temporary visa when setting up a Cyprus Foreign Interest Company (FIC)
Cyprus has provided non-EU individual/s the opportunity to reside and set-up their business in Cyprus or relocate their existing business, as a Cyprus Foreign Investment Company (FIC). FIC is an international company which is permitted to employ non-EU individuals in Cyprus. Criteria of a business qualifying as a FIC are listed below:
- Non-EU shareholder/s must hold the majority of shares in the company – at least 50%;
- Foreign direct investment must be made in Cyprus of €200,000 by the ultimate beneficial owner. This amount must be added to a Cyprus bank account from abroad and can be used for the company’s future activities;
- The business must operate in a fully functioning, independent and suitable office;
If the above criteria are met, then the non-EU shareholder will be able to benefit from the below listed advantages:
- Family members and children can move and reside in Cyprus as well. Children are permitted to attend school and spouses are permitted to work;
- Business can register and hire non-EU staff. Applications for work permits must be submitted prior to employment and are valid for a period of up to 2 years (depending on the employment contract) and then they are renewed. See number of Non-EU employees permitted to employ below:
–Directors: Maximum of 5 individuals with a minimum monthly gross salary of €3,872 each;
–Middle management and other key personnel: Maximum of 10 individuals with a minimum monthly gross salary of €1,936-€3,871 each;
–Support staff: No maximum number, however generally for support staff priority must be given to EU citizens;
–Specialists: No fixed number – more employees are acceptable as the turnover of the company goes up;
The individual shareholder/s can apply for a business visa (work permit) and can even apply for citizenship after a period of 7 years and benefit from all the advantages of holding a Cyprus passport can provide, assuming they have resided fully in Cyprus.
Cyprus Permanent Residence Permit (PRP) – Fast track
The Cyprus government has introduced a scheme that assists non-EU nationals to invest in Cyprus and obtain Permanent Residence Permits in an efficient and timely manner.
As of 24 March 2021, applicants can invest an amount of €300,000 (excluding VAT) of funds received from sources outside of Cyprus in one of the below 4 categories:
- Purchase of new residential immovable property with a market value of at least €300,000 plus VAT. The applicant must submit the sale agreement and also provide evidence of payments of at least €200,000 plus VAT. Sale agreement must also be submitted to the Cyprus Department of Land and Surveys;
- Acquisition of two new or used immovable non-residential properties. For example an office, shop, hotel etc., again with a total market value of at least €300,000 plus VAT;
- Purchase of shares in a Cyprus company that is fully operating and is registered in the Republic. Company must also employ at least 5 members of staff;
- Purchase of units for a total value of at least €300,000 in the Qualifying Cyprus Investment Funds Association’s collective investments (AIF,AIFLNP, RAIF);
Applicants must be able to prove that they will be receiving an annual income of minimum €30,000 per year. If the applicators choose the residential real estate route, then the source of the annual income must be from overseas. If any of the other routes are selected, then annual income can be generated in Cyprus. In addition to this, the applicate must also provide evidence of an additional €5,000 annual income for their spouse and for each child, while for each dependent parent or an in-law an additional €8,000 annual income.
The applicant and their spouse will need to clarify that they do not intent to work in Cyprus and must also hold a clean criminal record. Applicants and their family must visit Cyprus within one year of the application process to obtain the permit and once the applicant becomes holder of the residence permit, they must visit Cyprus at least once every two years.
The PRP process has been extremely simplified and the procedure is completed in just two months. PRP holders are free to enter and reside in Cyprus without the need of a visa. Holders of a PRP may also be eligible to obtain a Cyprus citizenship by naturalisation. This is subject to the condition that the holders of the permit reside in Cyprus for seven years in any ten calendar year period.
For more details on the three different routes to Cyprus residency that are listed above and assistance to decide what is best for you individually and for your business, please contact our offices at email@example.com.