Cyprus – New Policy for Employment of Non-EU Citizens
Strong competitive advantages make Cyprus an ideal location for re-location or expansion of many businesses from other countries which are already building up their success, based on those advantages.
Although Cyprus membership to the EU is one of the advantages in regards of the availability of highly skilled and educated work force, analysis however, shows there is high number of non-EU citizen employees who are working for Cypriot companies from abroad, specifically in the ICT sector. The main reason for this was the country’s policy for operation and employment of foreign companies and talented work force from non-EU citizens.
The Cypriot government feels committed in further increasing the attractiveness of Cyprus and improving Cyprus’ position as an international high-growth business centre, as well as a tech-hub, amended its immigration legislation in favour of companies of certain industries to easily establish their operation in Cyprus, expand further their activities in the country and to employ non-EU citizens.
The new regulations replace the previous regulation for “companies with foreign interest” in a favourable way for non-EU investors.
A dedicated infrastructure has been set up to facilitate smooth and rapid procedure for registration of eligible companies.
Work permits for non-EU citizens
Once an eligible company has been registered, it may proceed with the submission of applications for the issuance of work permits for highly skilled employees from non-EU countries and their families. The work permits will be issued within one month from the date of the submission of the complete application documents and be valid for a period of 3 years.
The maximum number of non-EU citizens that a foreign company can hire is set at 70% of the total number of employees. However, to further ease the employment of non-EU staff, this limit should be achieved over a period of 5 years, from the date of the enactment of this policy (i.e. 1/1/2022). On that basis the first evaluation of this condition will be undertaken on 1/1/2027.
The following are the main requirements for hiring highly skilled non-EU nationals:
- The non-EU citizen must have a university degree / diploma, or, proof of at least 2 years of relevant experience in a corresponding employment position;
- Employment contract for a period of at least 2 years;
- Minimum gross salary of €2.500 per month.
Family reunification and work permit for spouses:
Family members of non-EU citizens that are working for eligible companies, can also apply for residence permits in Cyprus through the family reunification process.
Important note: Spouses of non-EU citizens that are working for eligible companies, are now having the right to free access of Cyprus’ labour market, for remunerated employment.
Eligible businesses must meet ONE OF the below criteria 1 – 5:
- Cypriot pharmaceutical companies or Cypriot companies active in the fields of biogenetics and biotechnology;
- Cypriot high-tech/innovation companies. A company will be considered as high-tech if:
(a) It is already established and has a presence in the market, and
(b) It has a high level or experimental R&D intensity, and
(c) It develops product/s that fall into one of the following categories: products related to aviation and space industry, computers, electronic and telecommunication products, pharmaceuticals, biomedical, research and development equipment, electrical machinery, chemicals, non-electrical machinery; - Companies with the majority of shares owned by non-EU citizens.
If the percentage of foreign participation in the share capital of a Company is equal to or below 50% of the total share capital, the Company is eligible if this percentage of the share capital represents an amount equal to or greater than the amount of €200,000; - Cypriot shipping companies;
- Public companies registered on any recognised global stock exchange.
Cyprus a global hub for technology and innovation
Considering that the contribution of technology and innovation sector in Cyprus reached 7.5% of the country’s annual GDP, the ICT sector is one of the main sectors for the development of the Cyprus economy.
In 2020 there was 25% growth in innovation performance in Cyprus, which is more than double of the EU average. Also, in the same year, the tech market in Cyprus reached €113.16 million in value, representing a 12.8% growth since 2018.
The level of IT and tech related specialists among Cyprus’ local graduates, is generally considered very good, however, they are too few to meet the demand of ICT sector in Cyprus, considering that, a lot of international companies which are using Cyprus as a hub for software development, testing and marketing services, research and development activities and system integration, often need to seek relevant skills abroad. For instance, TheSoul Publishing, Wargaming, Amdocs are a few of fast developing Tech companies in Cyprus that have employees abroad.
Also, Companies that produce qualifying intellectual property may also benefit from IP Box Regime that 80% of qualifying profits generated from qualifying intangible assets will be deemed to be tax deductible. This can result in an effective tax rate as low as 2.5% under certain conditions.
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