Why is Cyprus interesting for team relocation?
It is no secret that a large number of IT companies from the CIS have moved to Cyprus. At the moment, it is one of the largest IT hubs in the EU, because the low tax rate and similar culture have made it very attractive for our citizens.
Compared with other EU countries, Cyprus is also interesting due to low cost of living, the availability of Russian and Ukrainian-speaking schools, kindergartens and other institutions and organizations.
In 2020, Cyprus enacted legislative changes for companies of foreign interests (also called international business companies) that have simplified the process of employment of foreign employees in Cyprus.
The main criteria of IBC:
- Third-country nationals must own a majority stake in the company (including, for example, through a U.S. entity).
- Transfer to the company account 220 000 EUR.
- The company must have its own separate office (rented or owned, co-working is not suitable).
It is worth noting that in our case, obtaining this status in the civil registry and migration office will not be difficult.
Required documents
- Certificate of registration: in the original and with the seal of the registry.Certificate of legal address: in the original and with the seal of the registry.
- Memorandum and Articles of Association: in the original and with the seal of the registry.
- Certificate of Directors: in the original and with the seal of the registry.
- Certificate of shareholders: in the original and with the seal of the registry.
- A profile describing the nature of the company’s business and details of its operations. A list with the names, full addresses, passport numbers and nationalities of the applicant company’s ultimate shareholders.
- List of company personnel (applicants and employees).
- Original bank statement with a minimum balance of 41,006 EUR.
- Document of ownership or lease agreement or contract of sale of an office in Cyprus. If these documents are not available at the time of application, they must be submitted within 3 months from the date of application.
- Proof by bank and/or other documents that the foreign direct investment amounts to at least EUR 171,000 and that it has been legally sent to Cyprus from abroad.
Main requirements for employment of foreign employees in Cyprus
The process of obtaining a work permit
Standard package of documents for obtaining a work permit:
- Form M58: filled in, signed and stamped by the employer.
- Form M64: filled in, signed and stamped by the employer.
- Copy of the passport pages, which include the personal data of the applicant and the date of expiration of the passport, which must be at least up to the date of the expected period of employment, as indicated in the employment contract.
- Original employment contract stamped by the Commissioner of Stamp Duty (IRD) and for auxiliary personnel, also stamped by the Regional Labor Office. For auxiliary personnel only: copy of the approval form issued by the Ministry of Labor of Nicosia.
- Original Criminal Record Certificate – certified by diplomatic means and translated into English in Cyprus.
- Original of medical certificates -certified by diplomatic means and translated into English in Cyprus with negative results for TB, Hepatitis B and C, HIV/AIDS and Syphilis. These certificates must not be older than 4 months.
- Bank guarantee (€350-850 depending on the country of origin) to cover possible repatriation expenses. This guarantee must be valid for at least 12 months after the expected period of employment. Some employers may have an agreement with the ministry whereby they issue a collective bank guarantee for all their current and future employees.
If everything is collected correctly, then after the visit with the documents to the immigration office, you can immediately come out with a temporary permit, and in three months comes a residence permit card.
Dismissal of employees
The employee will be tied to the company, if he/she quits and goes to work for another company in Cyprus, then he/she will need to resubmit documents (the list will be less in terms of documents to be submitted). But if he leaves the company and does not get employed anywhere, his work visa will be cancelled.
Wage deductions
| Title | Rate | |
| Social security contribution | 8,3% | |
| GESY (health insurance) | 2,65% | |
| Personal income tax (Pay as much as you earn – PAYE) | Progressive scale, up to 19,500 per year not taxed, then by limits of 20%, 25%, 30% and 35% |
Categorization of employees
- Directors (this category includes directors or partners registered in the Registry of Companies, general directors of branches and foreign parent companies, heads of departments and project managers).
The minimum acceptable gross salary is 4,000 EUR and the maximum number of persons in this category is 5.
- Mid-level managers and other key personnel (this category includes upper/mid-level management personnel and other administrative, secretarial or technical personnel).
The minimum allowable gross salary is from 2,000 euros, and the maximum number of people for this category is 10.
- Specialists (companies are allowed to hire third-country nationals in professions and/or with skills relevant to the company’s operations).
The minimum gross wage for this category is 2,000 EUR. There is no hiring limit.
- Auxiliary personnel (there is no maximum number to hire third-country nationals in this category, provided that the necessary permits have been obtained at the Ministry of Labor).
Obtaining citizenship in Cyprus
Currently, it takes 7 years to obtain citizenship, during which it is necessary to work and live in Cyprus (most of the time).
However, you should pay attention to the official plan of the state aimed at attracting foreign companies, among other things, it is planned that in the first quarter of 2022, the term of obtaining citizenship will be reduced to 5 years, and in cases where the applicant has a good knowledge of Greek language, down to 4 years.
FAQ
Tax and legal aspects, infrastructure and accessibility, cost of living, language and cultural context, and employee training and adaptation should be considered when planning relocation.
Business relocation can provide access to a new market, reduce the tax burden or improve the conditions for company development. Relocating employees can attract talent, increase motivation and reduce salary costs.
Challenges may include administrative procedures, business interruptions, loss of customers or partners, and employees adapting to a new environment. Risks include changes in market conditions, unforeseen costs and failure to attract talent.
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