A plan developed by the Cypriot authorities to attract foreign businesses and wealthy expats/investors to the territory of the jurisdiction comes into force in 2022. It will significantly simplify moving to Cyprus for many Russians, Belarusians, Ukrainians, and Kazakhstanis.

What mechanisms have been developed for moving to Cyprus to replace the golden passport? Let's figure it out.

In a new action plan adopted in October 2021, the Cypriot government announced a course to attract foreign investment, businesses and expats. In addition, the authorities' representatives announced several innovations, which concerned mainly immigration law.

Let us clarify that in the jurisdiction of Cyprus, back in November 2020, the filing of applications for “golden passports” through the economic citizenship program was suspended. This scheme was forced to close under pressure from official Brussels.

According to the new strategy, the only way to turn the page was to attract foreign businesses to Cyprus and stimulate economic activity by encouraging foreign investment and the influx of highly qualified foreigners seeking to move to Cyprus for local tax residency.

When adopting innovations, the positive experience of many European countries was considered. Emphasis was placed on attracting foreign experts in various fields related to technology, innovation, shipping, research and development, biogenetics and biotechnology. The changes came into effect in January 2022. We propose to consider the issue in more detail.

Business Facilitation Unit

The authorities, interested in the activities of the new structure, announced the creation of the Business Promotion Bureau. As the name implies, the priority is stimulating the influx of foreign entrepreneurs.

In order to achieve this goal, the authorities assume:

• assist foreigners in establishing new companies;

• facilitate the relocation of the headquarters of a foreign business to Cypriot jurisdiction;

• to expand the business activity of existing representative offices of foreign companies.

The Business Promotion Bureau will be responsible for various administrative services that will be necessary for the creation of legal entities. The department will be responsible for monitoring the following processes:

• the procedure for approving the names of new companies;

• the procedure for registering companies;

• the procedure for registering the personnel of new companies with the social insurance and tax authorities of the republic.

In addition, the functionality of the Bureau includes:

• supporting the founders and managers of companies planning their relocation to Cyprus;

• promotion of a business;

• assistance in obtaining the necessary licenses;

• assistance in organising business activities;

• renewal of residence permits;

• assistance in providing work for employees who companies of foreign investors/business people hire.

What has changed in the rules for issuing residence and employment permits regarding highly qualified third-country nationals and support staff:

As you know, the Cypriot government has revised its policy regarding highly qualified third-country personnel employed by local firms through foreign participation and seeking to move to Cyprus.

We will provide a list of companies that can use the new bonuses from January 1, 2022:

• companies with foreign participation that operate in the jurisdiction and plan to start business activities on the island using suitable office space, as well as:

• high-tech/innovative companies;

• shipping firms;

• pharmaceutical companies that work in the field of biotechnology and biogenetics.

The listed firms will be given the right to invite highly qualified specialists from third countries to leading positions who will move to Cyprus. In this case, they acquire the right to residency.

Nevertheless, certain requirements are imposed on the hired personnel:

• diploma of Higher Education;

• readiness to move to Cyprus;

• professional skills/qualification equivalence;

• a document confirming the presence of work experience in the relevant position for at least 2 years;

• the minimum average monthly salary before tax in the amount of 2500 €;

• signing an employment contract for at least two years.

Those employees who are subject to the new immigration policy are allowed to take jobs and receive residency. These procedures can be carried out within a month, allowing you to move to Cyprus quickly.

The resident card is designed for a more extended validity period (possibly up to 3 years).

Following the new rules, restrictions are introduced on the employment of third-world citizens. Of the total number of employees of the company, the maximum number of invited specialists should not exceed 70%. The rest of the jobs should be left for the employment of Cypriots.

Invited foreigners are allowed to be employed for five years from the company's registration date with the Business Promotion Bureau. If, after the expiration of the specified period from the date of the company's registration, 30% of the jobs are not given for the employment of Cypriots, officials individually consider the case.

Firms that comply with the new requirements are allowed to invite third-country nationals as support staff with a gross monthly salary (before taxes) of no more than 2500 €.

The procedure for hiring third-country nationals who are willing to move to Cyprus as support staff is subject to several requirements:

• the share of foreigners should not exceed 30% of the total number of the support staff;

• third-country nationals and employers have entered into an employment contract approved by the competent authority by the applicable law.

The current legislation determines the minimum allowable wage. The maximum validity period of residence and work permits, in this case, is also 3 years.

What rights, in the light of the new rules, exist for third-country nationals working in Cyprus and wishing to reunite with their families:

In accordance with the new rules, third-country professionals working in Cyprus are allowed to move to the territory of the island nation along with their family members.

Direct and free access to the Cypriot labour market as employees is granted to spouses of citizens from third countries who have previously received a residence permit and a work permit in the republic per the new rules. At the same time, the average monthly salary (gross) should not be less than 2500 €.

It must be borne in mind that this rule does not apply to support staff whose monthly salary is less than 2500 €.

Is it possible to simplify the procedure for issuing category E work permits

Following the new rules, foreigners of category E who want to move to Cyprus are provided with simplified and accelerated forms of granting immigration permits and employment. This applies to the status of a long-term resident given to individuals who have received a permanent job and do not create additional competition among the local population for employment.

Digital Nomad Visa:

The Cypriot legislature plans to stimulate the influx of wealthy foreigners who want to move to the territory of the island nation through the introduction of a digital nomad visa. As part of the pilot programme, it is planned to begin issuing relevant residence cards to foreigners with a maximum initial limit of 100 beneficiaries. However, to start accepting applications from individuals who are third-country nationals, the authorities check citizens for the relevant requirements:

• the person concerned is given employment as a permanent employee;

• in the status of a remote contractor, information and communication technologies should be used for a more simplified form of communication with clients/employers;

• the employer must be located outside the jurisdiction of Cyprus;

• a person interested in moving must confirm the sufficiency of financial resources to cover their expenses during their stay in the republic without burdening the national social security system;

• the amount of the average monthly income is fixed at a level of at least 3500 €.

• the person has an insurance policy that, if necessary, will cover the costs of the host state;

• availability of a certificate of no criminal record.

Upon receipt of a digital nomad visa, a person acquires the right to stay in the country for a year; if necessary, extending the visa up to two years is possible. In addition, beneficiaries may bring family members with them for a period, the end of which is fixed by the expiration of the principal applicant's digital nomad visa.

You should be aware that relatives who have moved to Cyprus (husband/wife/minor family members of the principal applicant) are not allowed to engage in any economic activity in this jurisdiction.

A holder of a digital nomad visa who plans to move to Cyprus and expects to stay on the territory of the island state for one/several periods with a total duration of more than 183 days in one tax year, acquires the status of a Cypriot tax resident, if at the same time he does not have the tax resident status of another state.

Provision of tax incentives

The Cypriot legislature plans to implement proposals that relate to the provision of tax incentives. Such proposals were submitted to the House of Representatives at the end of December 2021. The Cypriot government expects that the proposals will be approved and implemented by the end of the first quarter of 2022. Innovations look like this:

• new resident employees with an annual earned income of more than 55 thousand euros are granted a 50% exemption from income tax (currently, the annual salary threshold is 100,000 euros);

• employees with an annual income in the range of 55,000 to 100,000 euros are granted an exemption from income tax for 17 years (provided that candidates have not lived on the territory of the island state in resident status during the 17 years before starting work);

• investments in certified innovative companies are subject to a 50% tax exemption for corporate investors (under the regime that was in force until the end of June 2021, tax exemptions were granted only to individuals);

• an increased tax deduction for research and development costs (for example, 20%).

Applications for naturalisation

The legislature of Cyprus is ready to accept applications for naturalisation from foreign citizens who plan to move to Cyprus and reside in the territory of the island state permanently after five years of stay and work in the republic. Previously, this period of naturalisation lasted for 7 years.

In addition, the authorities are also looking for new opportunities to reduce this period. So, for example, if potential candidates present a certificate of successful passing of tests for knowledge of the Greek language, the period of naturalisation can be reduced to 4 years. However, this will require an advanced level of Greek language proficiency, which must be documented.

Verified Cyprus Golden Visa:

It is no secret that many wealthy citizens want to move to Cyprus and create a "reserve airfield" for themselves on the island's territory using an affordable investment immigration scheme. Another alternative to economic citizenship is the golden visa available to foreigners. However, it must be borne in mind that people choosing this immigration route must fulfil the following requirements:

- Firstly, the Cypriot visa is available to citizens from countries not part of the EU. To obtain such a visa, the applicant must confirm compliance with several specific requirements:

• compliance with financial criteria, which are regulated by the Cypriot authorities;

• compliance with the reliability criteria, which an independent foreign company must assess;

• confirmation of the legitimacy of the origin of investment funds, including the following sources of financial resources:

- income from asset ownership;

- pension;

- salary.

- secondly, there are financial criteria for obtaining a Cypriot golden visa, which includes:

• for at least 3 years, a deposit of €30,000 must be made to a Cypriot bank account; funds must be transferred from abroad;

• the applicant is obliged to provide proof of annual earnings, the amount of which must not be less than 30,000 €;

• if the applicant plans to move to Cyprus with members of his family that are incapable of work (non-working spouse, children, elderly parents), the amount of the annual income threshold is increased by 5,000 € for a spouse and any child, as well as by 8,000 € for other dependents;

• the applicant must purchase one/several residential properties, the total value of which will be more than 300,000 € excluding VAT. An alternative option is to invest in other real estate types: land and other commercial facilities. Investments in fixed assets must not be less than 300,000 €. Mutual investments through Cypriot funds for a similar amount are also being considered.

Possibilities of moving to Cyprus through a golden visa

The investment immigration scheme is the most attractive and easiest to move to Cyprus.

What are the advantages of the Cyprus golden visa:

• you can add family members who are ready to move to the application;

• thanks to the possibility of unlimited extension, a sufficiently long period of validity is obtained;

• allowed to visit the Cypriot jurisdiction in unlimited quantities;

• a more straightforward form of tax planning through the right to obtain Cypriot fiscal residency;

• obtaining the right to EU citizenship through naturalisation;

• it is allowed to make investments through the company.

Expert assistance for those who decide to move to Cyprus

With the adoption of the new rules, many foreigners will be able to take advantage of simplified schemes for moving to Cyprus. Moreover, as seen above, the Cypriot authorities are doing everything possible to accelerate the sustainable development of the jurisdiction and secure the republic's reputation as a regional business and financial centre of Europe.

It is no secret that many foreigners are eager to move to Cyprus, attracted by obvious competitive advantages, including:

• favourable tax regime;

• developed and stable business environment;

• sustainable banking infrastructure;

• transparent legal framework;

• developed systems of education and healthcare;

• high level and quality of life.

If you need more information and planning to move to Cyprus and would like to take advantage of the new regulations and learn more about immigration routes, book a consultation with our experts now. You can use the phones indicated on the website or choose other communication channels to do this. We are waiting for your requests!