In an attempt to encourage foreign investors to set up their headquarters or expand their business 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.
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.
For a company to be qualified as a Company of foreign interests and to be eligible to employ third-country 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. This requirement only applies to companies which 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.
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.
|#||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|
|7||Machine Learning Engineers|
|8||Web Developers and designers|
|9||UX User Experience Professionals|
|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|
|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|
|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 millions: 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|
|2||Middle management executives and other key personnel||10|
|3||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 millions: 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.
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.