Non EU nationals (incl UK) wishing to relocate to Cyprus

BRITISH PEOPLE TRAVELING OR RELOCATING AND WORKING IN CYPRUS AFTER BREXIT 1/01/21

British Citizens who are not holding residence documents of Yellow slips (MEU1, MEU2, MEU3)

and/or (MUKW1, MUKW2, MUKW3), will still be able to visit Cyprus but be subject to immigration

rules upon their arrival. UK people can visit Cyprus for a period of 90-day entry free-visa but their

passports will be stamped at the border checks during the entry/exit the same as all the other

Non-EU Nationalities.

In the event that UK nationals wish to extend their stay in Cyprus for more than 90 days, they can

apply either for temporary residency or permanent residency offered to non-EU nationals.

TEMPORARY RESIDENCE

Non-EU nationals who come to Cyprus for long-term purposes without employment rights can apply

for a temporary residence permit, commonly referred to as a ‘’Pink Slip’’ which allow non-EU

nationals to extend their stay in Cyprus for more than 90 days. Applicants need to apply before their

visas expire. It is valid for one year and can be renewed on an annual basis with a limitation of

absence period out of the country, not more than 3 months continuously as the permit will be

cancelled.

When applying, the physical presence of the applicant and his dependent spouse and minor children

is required in order for the Migration Department to receive their biometric features (fingerprints

and photographs) as well as their signatures prior to the submission of the temporary residence

applications.

PERMANENT RESIDENCE

Non-EU nationals and their family members who wish to relocate permanently to Cyprus can apply

under any of the permanent residency types offered to non-EU nationals with the most famous of

them being the ‘Fast Track’’-permanent residency scheme which concerns property purchase in

Cyprus and which was recently amended by the government authorities to include new types of

investments. Please see our guide for Permanent residency

Non-EU nationals can also apply for permanent residency on the basis of one of the Categories

referred to in the Aliens and Immigration Regulations. The below immigration permits are granted

for an unlimited duration to non-EU nationals who comply with the requirements of applying under

each Category:

Category A:

Persons who intend to work as self-employed in agriculture, cattle breeding, bird breeding or fish

culture in the Republic: provided that they have in their possession adequate land or a permit to

acquire same, they have fully and freely at their disposal necessary capital as provided for in the

regulations and such an employment should not negatively affect the general economy of the

Republic.

Category B:

Persons who intend to work as self-employed in mining enterprises in the Republic: provided that

they have in their possession a relative permit, they have fully and freely at their disposal the

necessary capital and such an employment should not negatively affect the general economy of the

Republic.

Category C:

Persons who intend to work as self-employed in a trade or profession in the Republic: provided that

they have in their possession a relative permit, they have fully and freely at their disposal the

required capital and that such an employment should not affect negatively the general economy of

the Republic.

Category D:

Persons who intend to work as self-employed in a profession or science in the Republic: provided

that they have academic or professional qualifications for which there is a demand in Cyprus.

Possession of adequate funds is also necessary.

Category E:

Persons who have been offered permanent employment in the country which will not create undue

local competition.

Category F

– Also known as the ‘Slow Track’ permanent residency: Persons who have fully and freely at their

disposal a secure and regular annual income, which is high enough to provide a decent living in

Cyprus without having to engage in any business, trade or profession in Cyprus. The annual income

required should be at least €10.000 for a single applicant and moreover at least €5.000 for every

dependent person, but the Immigration Control Board may demand additional amounts as

necessary. This category is suitable for non-EU nationals who have savings from lawful sources from

abroad (salary, rentals, dividends, pensions etc.) and it is considered to be the most favourite choice

for pensioners or retirees. Purchasing a property in Cyprus under this category counts positively

towards the examination of the application but it is also possible to qualify merely with a rental

agreement. Each application is examined on its merits.

All of the abovementioned categories of applications are reviewed by the Immigration Control

Board, and the Minister of the Interior will grant final approval. Examination and processing of

applications takes around 12-18 months. If the applicants wish to stay in Cyprus during the

examination of their application, then they must apply for a temporary residence permit.

WORK PERMITS

Non-EU nationals who wish to work in Cyprus can apply for residency permits that are available to

non-EU nationals who wish to reside and work in Cyprus.

Subject to certain requirements, it is possible to apply for a temporary residence and employment

permit as an employee of existing and new company of foreign interests registered in Cyprus

(majority of the company’s shares must be owned by third-country nationals) as well as companies

that have joined the Fast-Track Business Activation Mechanism.

In addition, subject to certain requirements, it is possible, for Non-EU Nationals to be employed by

a Cypriot company and for them to obtain a work permit. The application would be submitted to

the District Labour Offices that will investigate and confirm that the criteria for the employment of

foreigners are being met, and that there is no availability of adequately qualified Cypriot or

European citizens.

Cyprus Tax Residency for Individuals and Non-Domiciled Status Imposition of Tax

A Cyprus tax resident, is taxed on income accruing or arising from sources both within and outside

the Republic of Cyprus, whereas a non-Tax resident of Cyprus is only taxed on income accruing or

arising from sources within the Republic.

Tax Residency

Cyprus taxation scheme is based on the principle of residence and there are two main rules

someone can choose to become a Cyprus Tax resident.

A. The 183-day rule

An individual is considered a tax resident of Cyprus if he spends more than 183 days in the Republic

in a tax year (1st of January to 31st of December). Consequently, if the individual is physically present

in Cyprus for less than 183 days in a tax year, he will be considered to be a non-Cyprus tax resident

in that tax year.

B. The 60 days rule

As of 1st January 2017, an individual can be considered as a tax resident of the Republic even if he

spends less than 183 days provide, he meets all of the following conditions within the same tax year

(1st of January to 31st of December):

1. Does not stay in any other country, for one or more periods exceeding in aggregate 183

days;

2. Is not a tax resident of any other country;

3. Spends at least 60 days in Cyprus;

4. Maintains a permanent home in Cyprus either owned or rented;

5. Carries out business activities in Cyprus and/or is employed in Cyprus and/or holds be a

director in a company that is tax resident in Cyprus;

If during the year the business, employment or holding of an office is terminated, then the individual

shall not be treated as a Cyprus tax resident for that tax year.

Calculation of days

To calculate the days of presence in Cyprus

1. The day of arrival in Cyprus is deemed to be a day in the Republic

2. The day of departure from Cyprus is deemed to be a day outside of the Republic

3. The arrival into the Republic and departure from the Republic on the same day is considered

as a day in the Republic

4. The departure from the Republic and the arrival in the Republic on the same day is

considered as a day out of the Republic

Definition of Non-Domiciled Persons

In accordance with the provisions of the Wills and Succession Law, there are two kinds of domicile:

• Domicile of origin: i.e. the domicile received by an individual at birth; or

• Domicile of choice: i.e. the domicile acquired by an individual by establishing physical

presence in a particular place with the intention to make it the place of permanent residence

Irrespective of the domicile of origin or choice, individuals who have been tax residents in Cyprus

for at least 17 out of the last 20 years prior to the tax year in question, will be deemed to be

domiciled in Cyprus for the purposes of the SDC Law.

In the case of persons who have their domicile of origin in Cyprus, they will nevertheless be

considered as non-domicile in the following cases:

• If they have acquired and maintained a domicile of choice outside Cyprus, provided that

they were not tax residents in Cyprus for any continuous period of at least 20 consecutive

years prior to the tax year in question; or

• If they were not tax residents in Cyprus for a period of at least 20 consecutive years

immediately prior to the entry into force of the non-domicile provisions (i.e prior to

16/07/2015).

•

Tax Benefits of Non-Domiciled Persons

As per the provisions of the Cyprus SDC Law, dividends and bank deposit interest earned by

individuals who are tax residents in Cyprus are subject to SDC tax at the rate of 17% and 30%

respectively, regardless of the source of the income (i.e. from Cyprus or from abroad). SDC tax

applies only for individuals who are both Cypriot tax residents and domiciled in Cyprus.

Therefore, non-domiciled tax residents will be completely tax exempt from any dividends and

interest received in Cyprus (except for minimal GeSY contributions), Since 1 March 2019, Dividend

income is subject to GeSY contributions, (at the rate of 1.7% from 1 March 2019 until the 29

February 2020, then increased to 2.65% from March 1, 2020), restricted to a maximum of

EUR180,000 income annually.

Further tax advantages for individuals

Furthermore, irrespective of domicility, foreigners who become Cypriot tax residents enjoy a range

of other significant income tax advantages with the main ones being the following:

1. Interest and dividends are liable to SDC instead of income tax, but non-Cyprus domiciles are

exempt (except for minimal GeSY contributions).

2. Profit from sale of shares and other qualifying titles is specifically exempt from Cyprus

taxation, provided that the underlying assets do not include immovable property located in

Cyprus.

3. First €19,500 of taxable income is tax exempt. Any taxable personal income in excess of this

amount is taxed at progressive rates ranging from 20% to 35% (for incomes over €60,000).

4. 50% exemption for remuneration from employment exercised in Cyprus by persons who

were resident outside Cyprus before commencement of their employment. The exemption

applies for a period of 10 years commencing from the year of employment, if such income

exceeds €100,000 per year.

5. In case of Cypriot remuneration, which is less than €100,000, a 20% exemption is granted or

€8,550 – whichever is lower. For employment commencing between 2012 and 2025, the

exemption applies for a period of 5 years starting from the tax year following the year of

employment.

6. 100% exemption on remuneration from the rendering of salaried services outside Cyprus to

a non-resident employer or a permanent establishment outside the Republic of a resident

employer, for an aggregate period in the year of assessment of more than 90 days.

7. In case of Cypriot immovable property acquired up to 31st December 2016, profit from

subsequent future disposal of such property will be exempt from the 20% Capital Gains Tax.

8. Pension received in respect of past employment abroad is taxed in Cyprus at the flat rate of

5% for amounts exceeding €3,420 per year.

9. No inheritance tax, no wealth tax, no gift taxation.

10. In case of individuals who are beneficiaries to a Trust, such individuals would be exempt

from tax in Cyprus, to the extent that the income at/from the Trust would be in the form of

interest or dividends.

WORK PERMITS FOR FOREIGN INVESTORS

In an attempt to encourage business people to set up their headquarters or expand their operations

in Cyprus, our government has recently reviewed the policy regarding the issuance of temporary

residence and employment permits to employees of existing and new companies of foreign

interests registered in Cyprus, as well as companies that have joined the Fast Track Business

Activation Mechanism.

The Policy

For the employment of a third-country national in the Republic a temporary residence and

employment permit is necessary. A key pillar of the review is the possibility for companies of foreign

interests to employ an increased number of staff in key positions, while at the same time the

employees’ family members can be granted Cyprus residence permits. The criteria that companies

must meet in order to benefit from this policy, the categories of staff and the maximum numbers

of third-country nationals who can be employed per category are described in the following

paragraphs.

Eligible Companies

For a company to be qualified as a Company of foreign interests and to be eligible to employ thirdcountry nationals in Cyprus must meet the following criteria:

1. Third country shareholders should own the majority of the company’s shares. In the case where

companies are the shareholders, their final owners (natural persons who are the ultimate beneficial

owners) should be declared, in order to receive the approval of the Civil Registry and Migration

Department.

2. Foreign direct investment from the ultimate beneficial owner of at least €200.000 in Cyprus, for

the purposes of operating the company in Cyprus. Thisrequirement only appliesto companieswhich

will employ staff from third countries for the first time. The paid-up capital of €200.000 can either

be a payment made into a bank account or an investment in a company asset such as immovable

assets and/or rents and/or the cost of any equipment for the needs of the company.

If the percentage of foreign participation in the company’s share capital is equal to or less than 50%

of the total share capital, in order for the company to be considered as eligible, then the foreign

participation should represent an amount equal to or greater than the amount of €200.000.

3. The company should operate on its own self-contained offices in Cyprus in suitable premises,

separate from any private housing or another office, except in the case of business co-habitation.

Staff Categories

Companies that meet the above conditions are entitled to employ third-country nationals in the

following categories, provided that they first obtain temporary residence and employment permits.

Category 1 – Directors:

In this category the following third-country nationals are included:

• Directors or Partners registered in the Registrar of Companies and Official Receiver

• General Managers of branches and subsidiary companies of foreign companies

• Departmental Managers

• Project Managers

The minimum acceptable gross monthly salary for Directors is €4.000, which may be adjusted from

time to time, depending on fluctuations in the wage index.

Five (5) is the maximum number of third-country nationals that can be employed under this

category, unless the Civil Registry and Migration Department is satisfied that the employment of a

greater number is justified, depending on each company’s circumstances.

Category 2 – Middle management executives and other key personnel:

In this category the following third-country nationals are included:

• Upper / middle management personnel,

• Other administrative, secretarial or technical staff

The minimum acceptable gross monthly salary for this category is €2.000, which may be adjusted

from time to time, depending on wage index fluctuations.

Ten (10) is the maximum number of third-country nationals that can be employed under this

category, unless the Civil Registry and Migration Department is satisfied that the employment of a

greater number is justified, depending on each company’s circumstances.

Category 3 – Specialists:

Companies are entitled to employ third-country nationals in professions / with skills as listed in

Table 1 below. The number of employees that may be employed by each company will be

determined based on its turnover, as described in Table 2.

The minimum acceptable gross monthly earnings for Specialists is €2.000, which can be adjusted

from time to time, depending on fluctuations in the wage index.

Table 1.

# Professions / Skills

1 Software and System Engineers

2 Application and Data Architects

3

Information and Communication Technology and Enterprise Solution

Architects

4 Technical Assurance Professionals

5 Telecom and Space Engineers

6 Data scientists

7 Machine Learning Engineers

8 Web Developers and designers

9 UX User Experience Professionals

10 Quantitative Analysts

11 Quality Assurance Analysts

12 Mobile Application Developers

13 Augmented Reality/ Virtual Reality Programmers

14 Digital Marketing Specialists

15 Video Production Multimedia Specialists for Mobile Apps and Software

16 Analysts for Mobile Apps and Software

17 Designers of Prototype for Mobile Devices

18 DevOps Engineers

19 Cyber Security Specialists

20 Artificial Intelligence, Robotics and Big Data Specialists

21 Pharmaceutical Formulation Technologists

22 Pharmaceutical Engineer Validation Specialists

23 Pharmaceutical Patents Specialists

24 Pharmaceutical Regulatory and Quality Assurance Professionals

25 Marine Engineers

26 Naval Architects

Table 2.

Specialists

Based on annual turnover* ≤1 million: 5 > €1 – €3 millions: 10 > €3 –

€5 millions: 20 > €5 – €10 millions: 30 > €10 – €20 millions: 50 > €20

– €30 millions: 100 > €30 million: 200* For eligible companies that

relocate to Cyprus and have joined the Fast Track Business Activation

Mechanism, the turnover that will be taken into account will be the

one of the company’s abroad. This will be valid for the first two years

of operations in Cyprus. Following the first two years, the annual

turnover of the company in Cyprus will be taken into account.

Companies already registered in the Register of Foreign Companies of the Civil Registry and

Migration Department can automatically benefit from the Policy for the employment of third country nationals in the Specialists’ category.

Category 4 – Support staff:

What happens with all third-country nationals not included in the above categories? Companies are

expected to fill in positions in this category with Cypriot or European citizens. In the case where

there are no qualified Cypriots or European citizens available, a company may employ third-country

nationals in posts in this category at a rate of 30% of the total staff, by first securing the positive

recommendation (sealed employment contract) of the Department of Labour which, for the

granting of its positive recommendation, considers the above percentage.

Maximum number of third-country employees per staff category

# Staff Category Maximum allowed number

1 Directors 5

2

Middle

management

executives and

other key

personnel

10

3 Specialists

Based on annual turnover*≤1 million: 5>€1 – €3

million: 10>€3 – €5 million: 20>€5 – €10 millions: 30>€10

– €20 million: 50 > €20 – €30 millions: 100 > €30

million: 200* For eligible companies that relocate to

Cyprus and have joined the Fast Track Business Activation

Mechanism, the turnover that will be taken into account

will be the one of the company’s abroad. This will be valid

for the first two years of operations in Cyprus. Following

the first two years, the annual turnover of the company

in Cyprus will be taken into account.

4 Support Staff 30% of the total staff (will be reviewed by the

Department of Labour during the labor market test).

For employing a greater number of third country personnel under the above categories, duly

justified and documented requests by the company must be submitted to the Department. The

requests must include information on the salary offered as well as:

• The company’s turnover

• The ratio of third-country employees to Cypriots / EU Nationals and

• The company’s operating time in Cyprus.

In order to exceed the limit of more than 300 third-country nationals employed in categories 1-3

above, the consent of the Council of Ministers is required.

It is stressed that the requests should only concern specific persons whose employment is

considered necessary by the company. General requests on the matter cannot be considered.

Validity of Temporary Residence and Employment Permit

Where the conditions foreseen in the law are met, the third-country national is granted a temporary

residence and employment permit. The permit’s validity depends on the duration of the

employment contract and can be up to two (2) years, with a right of renewal. Directors, Middle

management executives and other key personnel as well as Specialists (Staff categories 1-3) may

reside in the Republic without a time limit, provided they hold a valid temporary residence and

employment permit.

For support staff, the restrictions applicable to the general employment policy of third country

nationals in the Republic apply.

Family Members

Third-country nationals with residence and employment permits under staff categories 1-3 of the

Policy, have direct access to family reunification with their family members

With thanks to Red Tape Resolved