Cyprus is one of the most popular destinations for global entrepreneurs to set up companies. It is mainly driven by its low tax regime (only 12.5% on corporate income tax), being an EU member and a wide network of double tax treaties around the world. The country has an effective and developed legal system. The island also provides access to professional staff who can speak English, Russian, German, Greek and Turkish. Its economic environment provides good incentives for global entrepreneurs who need access to the EU banking system and a cost-efficient jurisdiction for business development.
In this article, we will analyze how to move to Cyprus as an entrepreneur.
Incorporating a Company in Cyprus
A company incorporated in Cyprus is considered a reputable EU entity. Similar to Ireland, Cyprus corporate tax is only 12.5%. It is one of the lowest in the European Union. Similar to other former British colonies, the taxation system in Cyprus is very efficient. There is no tax on dividends income or payments derived from a Cypriot company. There is no exchange control or capital gains tax (except on real estate of Cyprus). Therefore, a lot of entrepreneurs move to Cyprus recently. With its good infrastructure and Mediterranean climate, Cyprus becomes one of the most popular places for entrepreneurs to live in as well.
Visas for Foreigners Who Want to Reside in Cyprus
One question people ask is: can non-EU citizens move to Cyprus and live as an investor or entrepreneur? The answer is yes. It is doable as long as you meet the government requirements. Cyprus offers different types of visas for those who want to immigrate to Cyprus. It includes creating or purchasing companies in Cyprus, investing through real estate and investing in investment vehicles issued in Cyprus. The citizenship by investment programme usually requires applicants to have a minimum investment amount of EUR 2 million. If non-EU citizens want to obtain citizenship by purchasing property, the minimum amount is EUR 500,000 excluding VAT.
How about if you set up a company, hire yourself as an employee or director? Is there a path to permanent residency and citizenship in Cyprus? The answer is yes. But you need to fulfil certain requirements.
Hiring Yourself as an Employee or Director
Although Cyprus doesn’t require directors of Cypriot companies to live in Cyprus, it has benefits to have a resident director. First, if you hire yourself as an employee for your Cypriot company and live there, you will face fewer obstacles when opening local bank accounts and obtaining VAT numbers for this company.
Conditions for Hiring Non-EU Citizens for a Cypriot Company
Let’s say you want to hire yourself as an employee for your own Cypriot company. You want to move to Cyprus. There are requirements.
- You need to demonstrate to the Cyprus government that there is no qualified personnel available to fill such vacancy.
- The number of non-EU citizens employed must not exceed 30% of the total personnel of the Cypriot company.
In case the company does not meet the above requirements, it is still possible to hire yourself as an employee and move to Cyprus. But the company needs to fulfil the following requirements:
- the company should be of foreign interest. If you are a non-EU citizen and the shareholder or director is not from Cyprus, you meet this requirement already.
- the company has been capitalized with EUR 200,000 from overseas.
- the company has its own operating office in Cyprus (independent office i.e. no serviced office, no registered office shared with other companies, etc).
There are also requirements regarding the conditions of the employees:
- Employees can be directors. The maximum number of directors is 5.
- The minimum monthly gross salary shall be EUR 4,000 if the employee is a director.
- For middle management executives and other key personnel, the maximum number of employees is 10.
- For middle management executives and other key personnel, the minimum monthly gross salary shall be between EUR 4,000 and EUR 2,000 (depending on the specific position).
Steps to Obtain Residence Permit in Cyprus
Here is the step for you to move to Cyprus by the path of incorporating a Cypriot company:
- Incorporate a Cypriot Company
- Establish a Work Contract with the Cypriot Company
- Apply for the Work Permit and Work Visa in your home country
- Come to Cyprus
- Apply for the Residence Permit in Cyprus
Procedure of Getting a Work Permit
After you incorporate a company in Cyprus, you need to follow the procedures here to obtain the work permit.
- The employer must demonstrate that there are no suitable candidates in Cyprus who could fill the role
- You need to contact the Cyprus Department of Labour to obtain a letter of approval.
- After that, you need to apply for the work permit through the Civil Registry and Migration Department.
Obtain a Cyprus Work Visa
Once you obtain the work permit from the Cyprus government, you can apply for a work visa at the Cyprus Embassy or Consulate near you with the required documents. After that, you just need to wait for the results. Once the Cyprus Embassy or Consulate issues you a visa, you are ready to go to Cyprus.
Apply for a Residence Permit in Cyprus
Once you arrive in Cyprus, you should go to the local district office or immigration department to obtain a residence permit.
Path to Permanent Residency and Citizenship in Cyprus
If you decide to move to Cyprus as an entrepreneur, there is a chance that you can become a permanent resident in Cyprus. Non-EU citizens who had lived legally and continuously in Cyprus for five years can file the application of a long-term residence permit. Once you obtain a long-term residence permit and live in Cyprus for 7 years, you can apply for citizenship in Cyprus.