Residence In Cyprus Through Companies Of Foreign Interests

Introduction

Third country nationals have several options when it comes to acquiring a residence and employment permit in Cyprus. A company of foreign interests could be a gateway to residence and employment in Cyprus under certain conditions. This article concerns investors who intend to register a company in Cyprus and employ non- EU citizen individuals that are eligible to be employed by such companies. An informative guide follows regarding the criteria, benefits, applications, supporting documentation etc.

STEP 1: Company Formation

Establishing a company in Cyprus might be very advantageous especially due to the favourable tax regime of 12,5%, one of the lowest in Europe. The procedure of registering a Cyprus company usually takes around 7-10 days. Our Cyprus law firm will guide you through the procedure of company formation which entails a few stages, such as reserving a company name with the Registrar of Companies and preparing and submitting the necessary documentation with the Registrar to incorporate the company.

To find out more about company registration in Cyprus, click here.

STEP 2: Registration of the company with the Business Facilitation Unit

In order for the company to be considered as a company of foreign interests, it needs to register with the Business Facilitation Unit (BFU) operated by the Ministry of Energy, Commerce and Industry. A company is eligible to register with the BFU when the majority of its shares is owned by third-country nationals.

Moreover, the ultimate beneficial owner (UBO) must deposit an amount of €200,000 in an account held by the company in a credit institution licensed by the Central Bank- not including payment institutions. Alternatively, the company can submit evidence of an investment for the amount of €200,000, for the purposes of operating its business in Cyprus (e.g. office purchase, office equipment purchase, etc).

Additionally, the applicant has to submit evidence of the registered office of the business. It is clarified that the address needs to be of a physical place where the actual business is conducted- not the address of the registered office of the company. This means that the UBO must either purchase or lease the place where the business would be conducted.

It is noted that in case where the percentage, of the company's shares, owned by a third-country national is equal or less than 50%, the company might be still eligible given that the foreign participation has a value of at least €200.000; that is on top of the initial investment of €200.000 that is described above.

Following the success of the application, the company will be granted a written confirmation of their registration at the new Register of Foreign Interest Companies. The registration will be submitted to the Migration Department for the purpose of issuing residence and employment permits as it is explained below.

STEP 3: Application for Residence and Employment Permit

For the purpose of applying for a residence and employment permit with the Migration Department, the employees of foreign interests companies are divided in two categories: 'Highly paid & highly skilled employees', and 'support level staff'. Employees fall under either of these categories based on their salary. If their salary is equal or higher than EUR 2.500 per month they are considered 'highly paid/highly skilled employees', and when their salary is less than this amount, they are defined as 'support level staff'.

The difference between the two categories is important to keep in mind. Firstly, and most importantly, support staff can apply for an employment permit only if they have secured approval by the Ministry of Labour, confirming that the employment of a third country national is essential and would not create unfair employment conditions for natives. This is a quite demanding threshold to satisfy, given that evidence would be needed supporting that the nature of business requires such a level of expertise that the employment of the third country national is essential and would not create unfair employment conditions for natives.

On the other hand, highly paid and highly skilled employees are not subject to this requirement. This particularly is one of biggest benefits of this type of application, in contrast to the rest of the applications for employment permits for third-country nationals, which require the approval by the Ministry of Labour.

Moreover, highly paid and highly skilled individuals can enter the Republic of Cyprus with a visa, while support level staff can enter the Republic of Cyprus only with an entry permit issued by the Migration Department. Furthermore, a highly paid employee may renew their reside in the Republic of Cyprus without a time limit, by renewing their temporary residence and employment permit, while support level staff are subject to the restrictions set for general employment of third country nationals, meaning that their employment in Cyprus cannot exceed certain amount of time. This article is specifically focused on highly paid & highly skilled employees.

The relevant application form is 'M70' and the supporting documentation is:

• Copy of a valid passport.
• Copy of the passport's or other travel document's page showing the latest arrival in the Republic and visa.
• Brief Curriculum Vitae – CV including copies of academic qualifications and or relevant professional experience of at least two years.
• Original contract of employment, of at least two years of duration, dully signed and stamped, as well as two (2) copies of the stamped original contact, also dully stamped. If the contract refers to the practice of a regulated profession, documents must be submitted certifying that the conditions laid down in Cypriot law for the exercise of this profession are met.
• Employer declaration for covering the return cost of the third country national.
• Original Certificate of Criminal Record from the country of origin duly translated and certified.
• Original results of medical tests, performed in Cyprus, showing that the third country national does not bear/suffer from HIV, Syphilis, Hepatitis B and C and Tuberculosis – TB (through chest x-ray), certified from a Specialised Doctor in Cyprus.
• Title deed or rental agreement of a house/apartment, dully stamped.
• Certificate of Health Insurance for medical care that covers inpatient and outpatient care and transportation of corpse (Plan A) OR Registration Certificate in the General Healthcare System (GHS – GESY) and private insurance for transportation of corpse.
• Employer´s liability insurance with an automatic renewal.

The application processing time is usually a month. The duration of the permit depends on the duration of the employment contract, and up to three consecutive years. As it has been stated above, a highly paid employee may reside in the Republic without a time limit, given that they hold a valid residence and employment permit.

Services of our law firm

Our Cyprus lawyers will assist you with the following:

• Procedure of Cyprus company formation.
• Completing and submitting the application for the registration with BFU.
• Guidance regarding the necessary supporting documentation and the appropriate method(s) of certification.
• Preparation of all the required application forms.
• Booking of appointment with the Migration Department for the submission of the application.
• Accompanying the client on the submission day.
• Liaising with authorities after the submission to follow up the application process.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.