Newsletter No.14/ 2 March 2022
A new strategy for attracting businesses and talent in Cyprus has been implemented in Cyprus, commencing in January 2022. The new strategy transforms the existing Fast-Track Business Activation Mechanism into a Business Facilitation Unit for companies operating or wishing to operate in Cyprus.
The BFU (Business Facilitation Unit) will offer the following services:
1. Provision of Services for the establishment of a company: Assist companies to obtain all necessary registrations for the establishment of a business in a single point, including the company’s registration and name approval, the registration to the Social Insurance Registry and the Employers Registry and the registration to VAT Registry and to Income Tax.
2. Licensing Facilitation 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 Facilitate the issuance of residence and employment permits in Cyprus for third-country nationals.
EMPLOYMENT LICENSES FOR STAFF FROM THIRD COUNTRIES EMPLOYED BY FOREIGN COMPANIES
The new strategy has been implemented regarding the existing policy for employment of staff from third countries, employed by companies / enterprises of foreign interests (concerns companies / enterprises that will join the Business Facilitation Unit).
Initially, the Foreign companies / undertakings operating in the Republic of Cyprus or foreign companies / undertakings intending to operate in the Republic of Cyprus and operating independent offices in Cyprus, housed in appropriate premises, separate from any private residence or other office, Cypriot shipping companies, Cypriot high technology/innovation companies and Cypriot pharmaceutical companies or Cypriot companies active in the sectors of biogenetics and biotechnology are considered to be eligible companies for the new policy. Worthy to mention is that in cases where 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 as nominal capital.
Employment of third-country highly skilled nationals, is one dimension that is affected by this new strategy. Employees falling into the aforesaid category, are exempted from the Labor By Vaso Simits Newsletter No.14 / 2 March 2022 corporate NEW STRATEGY FOR ATTRACTING BUSINESSES IN CYPRUS Department’s market test (sealed employment contract requirement) and thus, they must be paid a minimum gross monthly salary of €2,500 and they must hold a university degree or diploma or equivalent qualification or confirmation of relevant experience in a corresponding employment position of at least 2 years duration. Moreover, the submission of an employment contract of not less than two years, is necessary. (Cap 105, Articles 18ΥΓ to 18 ΦΖ) The maximum number of thirdcountry nationals that can be employed is set at 70% of all employees over a period of 5 years, from the date of joining the Business Facilitation Unit.
After the lapse of 5 years if it is not possible to employ 30% of Cypriot workers, the matter will be re-examined on a case-by-case basis by the competent authorities.
Another dimension that is affected, is the employment of third country nationals support staff (with a gross monthly salary of less than € 2500), which is permitted provided that it does not exceed 30% of the total support staff and provided that there is an employment contract between the third-country national and the employer which is duly validated by the competent authority in accordance with current legislation. Also, their salary is determined by the current legislation. This proceeding will be under the competency and through the criteria of the labor department.
The Companies/undertakings in order to obtain the relevant staff permits for third country nationals they must submit certificates of registration issued by the Registrar of Companies and the Tax Department.
The submission of applications and the issuance of licenses will take place at the Civil Registry and Migration Department (CRMD), where a separate area already exists for the receipt of applications. The licenses will be issued within 1 month for a period of up to 3 years.
A grace period of 5 years, until 31.12.2026, is granted to existing Key personnel. Until then, existing holders of Key Personnel Residence and Employment permits can renew their residence permits with the existing salary threshold (€2000 gross monthly salary). The 5-year period for securing at least 30% key personnel from EU countries applies to existing companies too. After the lapse of 5 years, if it is not possible to employ 30% of Cypriot workers, the matter will be re-examined on a case-by-case basis.
Gradually and 6 months after the implementation of the new policy for employment of staff from third countries in international companies operating in Cyprus, and having collected data on the number of companies that will be served and the number of licenses that will be issued, the possibility of creating a One-Stop Service will be examined both for the provision of information / support to the companies, but also for the receipt of applications and relevant licenses. The One-Stop Services will be provided through the Business Facilitation Unit (they will be co-located) and can be housed either inside a Citizens Services Centre or in another building that will be found for this purpose.
Right for Family reunification of third-country nationals working for companies joining the Business Facilitation Unit corporate
NEW STRATEGY FOR ATTRACTING BUSINESSES IN CYPRUS
The new strategy ensures an immediate and free access to the labour market, with remunerated employment for spouses whose family member has obtained a residence and work permit in the Republic, and who receive a minimum gross monthly salary of € 2,500 (excluding support staff). A stamped Contract from the Department of Labour will not be required and the terms of the permit will fulfill the terms and conditions of the regarding the issuance of a single permit, such as: a) Valid passport for at least 2 years (b) legal residence in the Republic (c) An employment contract duly ratified where required (d) qualifications to practice the profession (e) suitable accommodation (f) Health Insurance (g) does not pose a threat to law and order or public security (clear criminal record certificate) (h) does not pose a threat to public health (medical tests) (j) a personal declaration undertaking responsibility for the costs of repatriation.
Simplification and speeding up of the procedure for granting work permits (Category E).
Last but not least, the Ministry of Interior is already working on an amendment to the “Aliens and Immigration” Law to simplify the procedure and determine the criteria on the basis of which the permits will be granted, since the procedure of the granting of the permit under Category E is time consuming.
For further details and explanation of the New Strategy please contact our firm A. & E. C. Emilianides, C. Katsaros & Associates LLC via email at email@example.com or via telephone at 22676752.