Recommended contact person
The Fast Track Business Activation mechanism was approved by the Council of Ministers on the 3rd of September 2020.
This scheme aims to further attract foreign business to the Republic of Cyprus as well as to provide fast and efficient services to foreign business entities who wish to establish their presence in the Republic.
The eligible companies can enjoy the employment of non-EU nationals in an increased number while at the same time the family members of the employee’ can be granted Cyprus residence permit.
This newly implemented policy illustrates which type are the eligible companies that can rely on an accelerated procedure for the incorporation as well as the registration with relevant public bodies that are necessary to the company’s line of operation.
Eligible companies are those which have been already incorporated or wish to be established in the Republic of Cyprus in addition to branches and subsidiaries of foreign companies. The requirement of physical presence in Cyprus including staff and premises is a prerequisite along with the condition that such company’s premises should be independent and separate from private residences.
The policy provides the eligibility criteria the companies which are interested in joining The Fast Track Business Activation mechanism must meet.
New companies are required to submit a reliable business plan in relation to the company’s goals, activities and strategies illustrating a sustainable growth potential. On the other hand, companies already operating on the island should have a minimum annual turnover of EUR 500.000 for at least three out of five years.
Whether the company is new or existing, the applicant should have invested, at any time prior to their application, the minimum amount of EUR 200,000 in benefit to the operation of the Cyprus Company. This investment amount can be used for acquiring company’s assets and/or machinery but not for shareholders’ private matters such as personal residence acquisition.
Pursuant to the above mentioned policy a procedure will be implemented in relation to the provision of services such as:
- Registration with social insurance registry and the Employer’s Registry;
- Registration of the company and name approval.
Furthermore, a fast track procedure will allow the company to be registered with the Civil Registry Migration Department, in order to effectively enable the company to hire non-EU staff and grant its employees work permits. It is important to note that the number of work permits issued by the competent authorities is dependent on the turnover of the company.
There is no restriction on maximum duration of stay regarding the non-EU staff and most importantly non-EU holders of residence and employment permits have direct access to family reunification.
A non-EU shareholder is eligible for the above mentioned fast track registration, when the majority shareholder of 51% and above is a non-EU national. This condition is waived in the event that the company belongs to certain categories, according to the law.
The approximate period for examining work permit and residence permit under the policy, shall be within four to six weeks from the date of submission of the application.
Apart from the fast track procedure for the incorporation and registration of the Company as mentioned above, and the opportunity to enjoy the benefit of significant increased number of non-EU nationals in key positions, there are also essential tax advantages which the company can benefit from. Such examples include corporate tax rate which is a fixed rate of 12.5% and tax on dividends at 0% (excluding, as from 1 January 2016, dividends which are tax deductible for the paying company), while expenses incurred for the production of income are tax deductible as well.
The information provided by A.G. Paphitis & Co. LLC is for general informational purposes only and should not be construed as professional or formal legal advice. You should not act or refrain from acting based on any information provided above without obtaining legal or other professional advice.
Should you have any questions please contact us.