Cyprus Business Facilitation Unit (BFU)

The Cyprus Business Facilitation Unit (BFU) is part of the Cyprus “Strategy for Attracting Businesses for Activities or/and Expansion of their Activities in Cyprus”. The Council approved the Strategy of Ministers on 15 October 2021, and the BFU took effect on 1 January 2022. As the Civil Registry and Migration Department (CRMD) explains, it replaced the existing policy on employees in companies of foreign interest.

Briefly

The aim of the BFU, according to the Ministry of Finance, is to gather international investments and talent and strengthen the position of Cyprus as a business center.

On January 2, 2022 Fast-track business activation mechanism turned into a Business Facilitation Unit.

The new strategy offers facilities for foreign companies that wish to employ high-skilled non-EU nationals.

How to apply

Application is made by email and letter of expression of interest to the BFU.

The letter should contain the following information:

• A description of the nature of the business.
• The number of employees.
• Expansion plans and other details.
• Services the company wishes to obtain through the BFU.
• The letter must be accompanied by any relevant documents.

Services available

A number of services facilitate the working of a business under the BFU.

Briefly, the BFU:

• Helps establish a company, for example giving assistance with the necessary registrations*. All the necessary registrations will be completed within 7 working days.
• Facilitates the licensing for the establishment and operation of companies in Cyprus. It provides all the information for obtaining the permits a company needs in order to begin work.
• Facilitates the issuing of Cyprus residence and employment permits, especially for third-country nationals. Residence and employment become a fast-track process.

*The necessary registrations are:

• Name approval and company registration.
• Registration at the Social insurance registry and the Employers’ registry.
• Registration at VAT registry and Income Tax.

Time scale

The licenses are issued within 1 month for a period of up to 3 years.

Eligible companies

In Cyprus, companies eligible for the BFU facilities are:

• 1. Companies where third-country shareholders own the majority of the shares;
• 2. If a foreigner holds only 50% (or lower) of the shares, then the foreign participation must equal to at least EUR 200,000 in the capital;

  For categories 1 and 2, the company must show an investment of EUR 200,000 in the Republic, or the ultimate beneficial owner (UBO) must deposit EUR 200,000 in an account held by the company in a credit institution licensed by the Central Bank of Cyprus.

• 3. Public companies registered in any recognized stock exchange;
• 4. Former offshore companies approved by the Cyprus Central Bank, which have now changed their offshore status;
• 5. Cypriot shipping companies;
• 6. Cypriot high technology* / innovation companies; or,
• 7. Cypriot companies that operate in pharmaceuticals or biogenetics and biotechnology.
• 8. Companies in which the majority of the total share capital is owned by persons who have acquired Cypriot citizenship by naturalization based on economic criteria provided they can show that the criteria continue to apply.

For categories 3-8, the EUR 200,000 investment criterion applies. The company must be able to prove the investment by showing an appropriate certificate(s).

The maximum number of foreign nationals employed by the company must be 70%.

The salary of the support staff may be determined by current national legislation (laws and rules).

* A high technology company is a company that:

• has an established presence in the market,
• has a high level or experimental research and development intensity,
• develops products that fall into categories such as aviation and space, computers, and electrical machinery.

The Deputy Ministry of Research, Innovation and Digital Policy has published a practical guide on such companies at: High Tech Enterprise Certificate - Practical guide (PDF).

Other companies

Criteria for third-country nationals

To get the working visa/ permit under the BFU, third-country nationals must satisfy the following criteria:

• They must belong to key personnel.
• Hold a university degree, diploma or equivalent qualification or credentials confirmation of relevant experience in an employment position of a duration of at least 2 years.
• Have a minimum gross monthly salary of EUR 2,500.
• Have an employment contract of not less than 2 years.

FAQ

Family reunification

There is a family reunification process for family members of third-country national key personnel.

The third-country national employee (the “sponsor”) must follow the procedure for family reunification and apply to the Civil registry and migration department.

The eligible family members (that is, the family members that can join the sponsor) are spouses, children and other children in the custody of the sponsor. The marriage must have taken place at least one year before the submission of the application.

If a family member does not qualify for family reunification (for example, a spouse of less than a year) they can apply for the temporary residence permit of a dependent visitor.

Rules for support staff

Employees with a gross salary of less than EUR 2,500.

Support staff is allowed provided, first, there is a duly stamped and validated employment agreement and, second, third-country national support personnel does not exceed 30% of the whole support personnel. The work permits are granted for up to 3 years.

Facilities and benefits

Some important benefits for high-skilled, third-country nationals, are:

• Exemption from the requirement to submit a sealed employment contract to the Labor Department (the market test requirement*, which means that this is a position in which no Cypriot could have been employed).
• Right of family reunification. Spouses of key personnel (that is, personnel with a minimum gross monthly salary of EUR 2,500) will have free and immediate access to paid employment without the market test requirement.
• A simplified and faster process to receive the work permit.

* The market test requirement is the stamped employment contract from the department of labor. The department “stamps” a contract when the employer shows that they are hiring a third-country national because they have not been able to find a local employee. The employer must first publish the vacant posts in the local press and get no positive response (copies of the announcement need to be handed in with the application). This requirement will no longer apply to key personnel and their spouses.

Tax incentives

The scheme of tax incentives was updated on 20 July 2022. The updates are part of the Cyprus Long Term Vision 2035, as outlined by Minister of Finance Constantinos Petrides in Dubai on 24 February 2022.

The tax incentives include

• Non-domiciled employees (with an income of EUR 55,000 and above) entering the Republic get a tax benefit of 50% for 17 years.
• Non-domiciled employees (with an income between EUR 55,000 and EUR 100,000) take the 50% tax exemption for 10 years.
• Existing non-domiciled employees (with an income of EUR 55,000 to EUR 100,000) can have a tax benefit of 50% for 17 years.
• Individuals who invest in an approved innovative company get an exemption of 50% for their investment. This regime is extended to the 31st of December 2023.
• Expenditure for scientific research and research and development expenses will be deducted from taxable income.

This last exemption was introduced in July 2022 and incorporated into the Cyprus Income Tax Law (ITL) Article 9(1)(d). It applies to:

Persons carrying on any business.

The R&D exemption to small and medium-sized enterprises (SMEs). The SMEs are as defined by Article 9A ITL. They must not be SMEs of foreign interest.

Research and development must be within the types recognised by international accounting standards. ACCA (the association of chartered certified accountants) defines research as original and planned investigation, undertaken with the prospect of gaining new scientific/ technical knowledge and understanding. Development is the application of research findings/ knowledge to a plan or design to produce new or improved materials, products, systems and so on.

See all the tax incentives in detail here:

Strategy for attracting business and talent - Business In Cyprus (PDF)

Right to apply for naturalization

Under the BFU, there is a right to apply for naturalization for third-country national employees. They can apply for and receive Cypriot nationality after 5 years, or 4 with success in Greek language examinations.

One-stop shop: the point of single contact

The point of contact for interested companies is the BFU. It acts as a single point of contact for foreign companies.

The point of single contact will process requests from foreign companies to establish a company in Cyprus or to expand the activities of existing companies.

Application is done by letter or email to the BFU (see above).

What happens next?

The applicant receives written confirmation of approval and is told what documents to submit to the BFU. The company is registered with the Registrar of Companies within 7 working days from the submission of the documents.

Using the confirmation, the company must contact the CRMD about the residence and employment of third-country national personnel.

To see all the easements and facilities available, go to: BFU - Business In Cyprus

How to get in touch with the BFU

Postal address:

Business Facilitation Unit (BFU)

Ministry of Energy, Commerce and Industry

Trade Service Building (3rd floor)

10 Andrea Araouzou street

1421 Nicosia

Email: bfu@meci.gov.cy.