On Friday October 15^th the Cyprus Government announced its new Action Plan for attracting new companies for operate or expand their activities in the island. The new strategy is in line with the guidelines European Commission and the Recovery and Resilience Facility and aims to introduce Cyprus as an ideal jurisdiction for High Tec, Research and Development and Shipping investments and also improve its attractiveness in Europe.

The new strategy is expected to be implemented from January 2022, we briefly introduce the key points of the Action Plan based on the announcement received

1. Improvement of the existing Fast Track Business Activation Mechanism into a Business Facilitation Unit

Responsibilities:

The provision of services for the establishment of corporate entities:
- Company registration and name approval
- Registration with the Social Insurance Registry and the Employers’ Registry
- Registration with the VAT and Income Tax

2. New policy for the issuance of temporary residence and work permits to third country nationals 

• employees should have academic skills or at least 2 years of relevant experience

• Employment contract should have duration no less than 2 years and minimum gross monthly salary of €2.500 is required

Employment of support staff with gross salary below €2.500

• Companies will be able to employ third country nationals as support staff (with gross monthly salary below €2.500) provided that the employment of third-country nationals does not exceed 30% of all support staff

Duration of the residence and work permit
• The duration of the residence and work permit can be up to three years and will be issued within one month from the application date

**The maximum number of third country nationals is 70% of the total number of employees in a 5-year period from the date of the inclusion of the company in the Business Facilitation Unit.

3. Family reunification right of third-country nationals under the Company Facilitation Unit

Spouses of third country nationals who have obtained a residence and work permit in the Republic, and who receive a minimum gross monthly salary of €2.500 will have immediate and free access to employment (not applicable for support staff).

4. Simplification of the process for work permits

The Ministry of Interiors will amend the relevant Regulations and simplify the process

5. DIGITAL NOMAD VISA

New type of residence permit that can be issued to third nationals self-employed or employees who wish to live in Cyprus and work for companies operating abroad

Residence Status

• Right to stay in the Republic up to twelve (12) months, with the right to renew for other two (2) years
• The applicant can be accompanied by family members, who can apply for residence permit but during their stay they are not allowed to provide any dependent work or to engage in any kind of economic activity in Cyprus.
• If the applicant lives in the Republic for one or more periods that exceeds the 183 days per year then is considered as Cyprus Tax Resident, meaning that is not tax resident in any other country.

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6. Extension of the tax exemption applicable to employees in the Republic (meaning that they were residents of the Republic before start their employment for a period of 17 years)

Tax exemption of 50% to new residents - employees with salary €55.000

Existing beneficiaries should be able to extend the exemption from 10 to 17 years. Potential beneficiaries are people salaried from €55.000 to €100.000 for the remaining period of 17 years.

7. Extension of the tax exemption for investment in innovative companies

 Consideration of the possibility to grant the tax exemption of 50% for investment in certified innovative companies to corporate investors (The scheme that was in force until 30 June 2021 applied only to individuals).

8. Increased tax deductions for Research & Development expenses

Granting an increased tax deduction on Research & Development expenses (e.g. by 20%). Eligible Research & Development expenses will be deducted from taxable income equal to 120% of the actual.

9. Application for Cypriot Citizenship

Right to apply for naturalization have applicants after 5 years of residence and work in the Republic or after 4 years if they meet criteria of holding a recognized certificate of very good knowledge of the Greek language

Globalserve Consultants Ltd, can assist and advice you on the above scheme, you can contact us at This email address is being protected from spambots. You need JavaScript enabled to view it. or call us at 00357 25 817181