Cyprus Startup Visa: The Entrepreneurs’ Guide

Summary

This guide outlines the main requirements of the Cyprus Startup 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. The scheme aims to foster innovation and job creation, consequently contributing to the economic development of Cyprus.

The development of the business ecosystem is integral to promoting innovation and job creation, reflecting the government's commitment to cultivate a thriving entrepreneurial environment.

There are two main schemes: (1) the Individual Start-Up Visa Scheme; and (2) the Team Start-Up Visa Scheme.

Category (1): Individual Startup Visa Scheme

An Individual Startup Visa Scheme in Cyprus is granted to any non-EU national who:

• Is the sole founder of the Start-Up and meets the Enterprise’s Requirements (see below);
• Has access to a capital of €50,000 (including Crowd Funding, Capital Funding or other sources);
• Can prove an excellent knowledge of the English or Greek language;
• Holds an undergraduate degree or equivalent professional qualification;

Category (2): Team Startup Visa Scheme

The second type of entrepreneurs’ visa applies to any team under the Team Startup Visa Scheme, 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 €25,000 and €50,000 if more than one founder. (including from crowdfunding, capital funding or other sources);
• All team members must prove an excellent knowledge of the English or Greek language;
• At least 1 team member must hold an Undergraduate degree or equivalent professional qualification;

Enterprise Requirements for Innovative Startup

The entrepreneurs’ visa in Cyprus schemes apply to ‘innovative startup’ enterprises. To qualify as Innovative, a business must spend 10% of its operating costs in ‘Research & Development’ to be examined as follows:

The scheme supports both new innovative startups and the relocation of established innovative startups.

• 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 Benefits of startup visa in Cyprus:

1. Rights to the residence and economic activity in Cyprus for 1 year, with the potential of renewing this for at least another year.
2. Right to self-employment or paid employment in the Applicant’s registered company within Cyprus.
3. Access to the EU market for the Start-Up business, including but not limited to an unlimited number of skilful EU labour, and ability to trade within the common market, access to EU grants etc.
4. Quality of Life: Cyprus has been ranked as one of the safest small countries worldwide and English language widely used
5. Business-friendly regulatory and legal structure (Cyprus Law largely based on English Common Law)
6. Enjoy the attractive Cypriot tax system, including but not limited to**: –** Lowest Corporate Tax in the EU (15% or 3% 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 3%; – 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;
7. 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
8. Residency and employment rights for senior executives' family members if their applications are approved.

Application Process & Evaluation for Cyprus Startup Visa Scheme:

Applicants who are eligible and fulfil the above requirements may submit an application with the Authorities with the supporting evidence. The Authorities shall then evaluate the application within 5 weeks. If successful, the Authorities shall issue an application's initial approval approving 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 the 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:

1. 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.

2. 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

3. 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.