This guide outlines the main requirements of the Start-Up Visa Scheme and the benefits you can gain. The Scheme’s core goal is to enable non-EU entrepreneurs to reap the benefits of residing and working in Cyprus, while the island gains from the development of these innovative businesses.
There are two main schemes: (1) the Individual Start-Up Visa Scheme; and (2) the Team Start-Up Visa Scheme.
Category (1): Individual Start-Up Visa Scheme
An individual start-up visa in Cyprus is granted to any non-EU national who:
- Is the sole founder of the Start-Up and is an Innovative Enterprise (see below);
- Has access to a capital of €20,000 (including Crowd Funding, Capital Funding or other sources);
- Can prove very good knowledge of the English or Greek language;
- Holds an Undergraduate degree or equivalent professional qualification;
Category (2): Team Start-Up Visa Scheme
The second type of entrepreneurs’ visa applies to any team of non-EU nationals who:
- Comprise of a maximum of 5 founders of the start-up or at least 1 founder and other senior executives (should be part of Senior Management) which should total no more than a maximum of 5 individuals;
- Who in total, possess more than 50% of the shares;
- Have capital in the case of one founder of €10.000 and €20.000 if more than one founder. (including from crowd funding, capital funding or other sources);
- All team members must prove very good knowledge of the English or Greek language;
- At least 1 team member must hold an Undergraduate degree or equivalent professional qualification;
The entrepreneurs’ visa in Cyprus schemes apply to ‘innovative’ enterprises. To qualify as Innovative a business must spend 10% of its operating costs in ‘Research & Development’ to be examined as follows:
- For pre-existing enterprises, the above criterion needs to be proven by external auditors (who adhere to the international accounting standards) for at least 1 of the 3 preceding years before the application;
- For a new enterprise (without financial history) then the above requirement will be examined through the ‘Business Plan’ which will be submitted by the Applicant/s. The Business Plan must provide for head offices in Cyprus (may be co-working spaces or co-location with other entities) and tax domicile of the enterprise in Cyprus.
The Applicant/s approved under the Cyprus Start-Up Visa Scheme, have the following benefits:
- Rights to residence and economic activity in Cyprus for 1 year, with the potential of renewing this for at least another year.
- Right to self-employment or paid employment in the Applicant’s registered company within Cyprus.
- Access to the EU market for the Start-Up business, including but not limited to unlimited number of skillful EU labour, and ability to trade within the common market, access to EU grants etc.
- Quality of Life: Cyprus has been ranked as one of the safest small countries worldwide and English language widely used
- Business friendly regulatory and legal structure (Cyprus Law largely based on English Common Law)
- Enjoy the attractive Cypriot tax system, including but not limited to:
- Lowest Corporate Tax in the EU (12.5% or 2.5% if can qualify under the IP Box regime). Tech companies producing IP may have a reduced corporate tax rate which ultimately gives an effective corporate tax rate of 2.5%;
- Dividend payments exempt from taxation
- Non-domicile tax residents exempt from paying tax on any dividend, interest or rental income generated from abroad
- Low income tax;
- No tax on mergers and acquisitions;
- If the enterprise is deemed successful by the Authorities, the Applicant/s may benefit from:
- Potential residence permit in Cyprus without any time restrictions.
- Family Reunification
- Hire a Specific Number of non-EU personnel, without prior permission from the Department of Labour
Application Process & Evaluation
Applicants who are eligible and fulfil the above requirements, may submit an application with the Authorities with the supporting evidence. The application shall then be evaluated by the Authorities within 5 weeks.
If successful, the Authorities shall issue a Notice of Initial Approval giving approval to the Applicants to operate their enterprise and conduct business activities in Cyprus for 2 years. The Applicants shall then apply for a visa of entry to Cyprus and subsequently for an appropriate work and residence permit. Before expiry of the initial residence permit, the Applicant/s can apply for the renewal of the same for another year.
The enterprise is evaluated/assessed at the end of the second year of operations. At this stage the Applicant/s makes a new application, where the Authorities shall assess whether the Start-Up has sufficient development or not, and you can find below the 3 main evaluations the Authorities may issue:
- The Start-Up shows sufficient development (scaling-up):
- In this case, the Authorities issue a Notification of Final Approval which then allows all involved personnel of the start-up (at the time of approval) to permanently reside and work in Cyprus and enjoy the full benefits of the Scheme.
- The Start-Up shows a positive outlook but does not present sufficient development (scaling-up):
- If the Authorities evaluate the start-up as above, they shall issue a Notification of Intermediate Approval;
- The Applicant/s shall apply for the renewal of their permits for approximately another year. The Authorities shall give their final decision regarding the start-up’s success approximately 13 months after the issuance of the Notification of Intermediate Approval
- The Start-Up is deemed to have failed:
- If the Authorities evaluate the start-up as a failure, then all permits will subsequently be revoked and the Applicant/s will potentially be asked to depart from Cyprus or seek alternative employment status.
This guide is for information purposes only. Prior to proceeding with any action you should acquire legal advice for your matter in question.