A company with foreign interests can serve as a gateway to residence and employment in Cyprus. This article is aimed at investors who are looking to register a company in Cyprus, obtain residence and employ non-EU citizens. Below, you will find an informative guide describing the criteria, benefits, application processes, required supporting documentation and maintenance requirements.
STEP 1: COMPANY FORMATION
The procedure of registering a Cyprus company usually takes around 7-10 days. Altus Citadel’s corporate team will guide you through the procedure of company formation which involves a few stages, such as reserving a company name with the Registrar of Companies and preparing and submitting the necessary documentation with the Registrar to incorporate the company.
To find out more about company registration in Cyprus, click here.
STEP 2: OPENING OF CORPORATE BANK ACCOUNT
To proceed with the registration of company as of foreign interests, the company must hold a bank account in a licenced banking institution in Cyprus. Generally, depending on the company’s activities and the bank’s specific requirements, the following documents are typically required:
- Full set of corporate documents from the official registrar
- Business address/Principal trading address
- Group structure
- Recent l Audited Financial Statements or Management Accounts
- Copy of passport and recent proof of address for the officers
Documents from the UBO:
- Copy of passport
- Recent proof of address
- CV
- Bank reference letter
- Information regarding source of funds and value of wealth to be supported with documentary evidence
Please note that the above list is indicative and further information or documents might be required. To read further about the services we can provide please refer to this link.
STEP 3: REGISTRATION OF THE COMPANY WITH THE BUSINESS FACILITATION UNIT
In order for the company to be considered as a company of foreign interests, it needs to register with the Business Facilitation Unit (BFU) operated by the Ministry of Energy, Commerce and Industry. A company is eligible to register with the BFU if:
- Majority share: The majority of the company’s shares are owned by third-country nationals.
- Deposit of funds: The ultimate beneficial owner (UBO) must deposit an amount of €200,000 in a bank account held by the company in a credit institution licensed by the Central Bank- not including payment institutions. Alternatively, the company can submit evidence of an investment for the amount of €200,000, for the purposes of operating its business in Cyprus (e.g. office purchase, office equipment purchase, etc).
- Rental Office Agreement: The company must submit evidence of the registered office of the business. It is clarified that the address needs to be of a physical place where the actual business is conducted- not the address of the registered office of the company. This means that the UBO must either purchase or lease the place where the business would be conducted.
Following the success of the application, the company will be granted a written confirmation of their registration as company of foreign interest. The registration will be submitted to the Migration Department together with the first employee’s work permit application documents.
STEP 4: APPLICATION FOR RESIDENCE AND EMPLOYMENT PERMIT
At the Migration Department, the employees of foreign interest companies are divided in two categories:
- Highly skilled employees
- Support level staff
Employees fall under either of these categories based on their salary. If their salary is equal or higher than EUR 2.500 GROSS per month, they are considered highly skilled employees, and when their salary is less than this amount, they are defined as support level staff.
The difference between the two categories is that the support staff can apply for an employment permit only if they have secured approval by the Ministry of Labour, confirming that the employment of a third country national is essential and would not create unfair employment conditions for locals. On the other hand, highly skilled employees are not subject to this requirement.
Moreover, the highly skilled individuals can enter the Republic of Cyprus with a visa or an entry permit, while support level staff can enter the country only with an entry permit issued by the Migration Department.
Below you will find the list of documents required for submission of an application for highly skilled employee:
- Copy of a valid passport.
- Copy of the passport’s or other travel document’s page showing the latest arrival in the Republic and visa.
- Brief Curriculum Vitae – CV including copies of academic qualifications and or relevant professional experience of at least two years.
- Original contract of employment, of at least two years of duration, dully signed and stamped, as well as two (2) copies of the stamped original contact, also dully stamped. If the contract refers to the practice of a regulated profession, documents must be submitted certifying that the conditions laid down in Cypriot law for the exercise of this profession are met.
- Employer declaration for covering the return cost of the third country national.
- Original Certificate of Criminal Record from the country of origin duly translated and certified.
- Original results of medical tests, performed in Cyprus, showing that the third country national does not bear/suffer from HIV, Syphilis, Hepatitis B and C and Tuberculosis – TB (through chest x-ray), certified from a Specialised Doctor in Cyprus.
- Title deed or rental agreement of a house/apartment dully stamped.
- Certificate of Health Insurance for medical care that covers inpatient and outpatient care and transportation of corpse (Plan A) OR Registration Certificate in the General Healthcare System (GHS – GESY) and private insurance for transportation of corpse (Plan C)
- Employer´s liability insurance with an automatic renewal.
The application processing time is usually a month. The duration of the permit depends on the duration of the employment contract, and up to three consecutive years.
STEP 5: OPENING OF PERSONAL BANK ACCOUNT
After the application process is completed, we can proceed with opening of personal bank account in Cyprus.
The following documents are usually required by the applicants:
- Copy of passport
- Copy of residence permit
- CV, preferably in English
- Copy of a Certificate of Criminal Record
- Copy of rental agreement and/or utility bill
- Copy of employment agreement
- Email and Mobile number
Please note that the above list is indicative and further information or documents might be required. To read further about the services we can provide please refer to this link.
STEP 6: PAYROLL SERVICES
To begin processing payroll for employees in Cyprus, employers must first register the company with both the Tax Department and the Social Insurance Services. Once the registration is complete, the authorities will issue a Tax Identification Code and a Social Insurance Number, which are necessary for payroll processing. Employers must submit new hires to both authorities as soon as the employment paperwork is finalized. Additionally, employees residing in Cyprus are required to register with the Social Insurance Services and the Tax Department to obtain their personal tax and social insurance numbers.
Every employed person in Cyprus is covered by the national social security scheme. The system is funded by employers and employees in equal parts – the State also contributes to the social security costs. In 2019, the country introduced a new General Healthcare System which is also funded by employment contributions.
Personal income tax in Cyprus is progressive with tax rates ranging from 20% to 35%. Income of up to EUR 19,500 is tax-free. Tax residents pay income tax on their worldwide income. For those without tax residency status in Cyprus, personal income tax is only levied on certain types of income earned in the country.
The contribution to the Social Insurance Fund is currently set at 17.6% and is split between employee and employer in equal parts. Contributions to the General Health System amount to 2.65% for employees and to 2.9% for employers.
In addition to these two main social security funds, employers also must make a monthly contribution to three other funds supporting industrial training, redundancy and social cohesion.
STEP 7: MAINTANCE OF THE COMPANY AND RESIDENCE PERMIT
Every company is obligated to prepare and submit an Annual Return (HE32 Form) to the Registrar of Companies once a year. This return must include details such as the company’s registered address, shareholders, debentures, directors, and secretary. The Annual Report (HE32) must be approved at the Annual General Meeting (AGM) of shareholders and then filed with the Registrar of Companies within 28 days of its preparation.
The financial statements for the previous year must be filed with the Registrar of Companies along with the annual return for the current year. It is important to note that each annual financial statement must be audited by an independent auditor.
Final reporting and payment of tax on all company profits (form IR4) is submitted two years after the reporting year.
If the company has a VAT number, VAT returns must be submitted quarterly.
As of March 2024, the Department of the Registrar of Companies and Intellectual Property abolished the Levy Tax payment of the amount of 350€ from 2024 and so on for companies that are registered under the Cyprus Registry of companies.
To renew a temporary residence permit in Cyprus, the applicant must follow the same process as the initial application. The necessary documents and application forms must be provided again. Altus Citadel’s team will make sure that your renewal application is submitted on time and all documents are prepared in accordance with the requirements.
How Altus Citadel can assist you:
- Cyprus company formation.
- Completing and submitting the application for the registration with BFU.
- Organizing an entry permit
- Booking of appointment with the Migration Department for the submission of the application.
- We can assist with the renewal of the residence permit application
- Provision of payroll and other related services
- Opening of personal and corporate bank account
- Preparation and submission of monthly VIES and INTRASTAT reports and quarterly VAT reports for the company
- Substance solutions (Office Services)
- Preparation of management accounts, budgets and cash flow forecasts
- Preparation of financial statements in accordance with IFRS
- Preparation and submission of provisional tax declarations and payment of taxes
- General company administration services
Reach out to us today to start on your journey! Tel.: +357 22 252 774 or Via Viber, WhatsApp, Telegram +357 99 988 31, E-mail: marketing@altuscitadel.com
