The Cyprus Start-Up and Entrepreneurs’ Visa

Summary

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 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 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 €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

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 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 (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%;
    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;
  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

Application Process & Evaluation for Cyprus startup visa:

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 a Notice of 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.

Contact us to schedule your complimentary consultation.

Polycarpos Philippou & Associates LLC