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REVISED POLICY REGARDING THE INTERNATIONAL BUSINESS COMPANY SCHEME

CATEGORY: INTERNATIONAL LAW

REVISED POLICY REGARDING THE INTERNATIONAL BUSINESS COMPANY SCHEME

On April 24, 2013, the Council of Ministers approved the policy for the issue and renewal of Temporary Residence and Employment Permits for third country nationals employed by International Business Companies / Companies of Foreign Interests operating in the Republic of Cyprus (the “Policy”). The said Policy was introduced as an incentive to attract investors for transferring and/or establishing their businesses in the Republic of Cyprus and, to this end, it afforded -those eligible to take advantage of its provisions- with a series of benefits, including the employment of a relatively large number of high-skilled third-country nationals in particular professions and/or businesses through an expedited admission procedure, which may not require the receipt of any consent(s) and/or approval(s) of any other services and/or authorities.

In view of the demanding framework with regards to investment programs of any kind and in the course of applying stricter criteria for the admission of third country nationals in the Republic of Cyprus on that basis, the Policy has been amended on October 7, 2020 following a proposal to this end submitted to and approved by the Council of Ministers (the “Revised Policy”). Retrieving from the Revised Policy, a Third Country National may apply for a Temporary Residence and Employment Permit in the event that he will be employed by an International Business Company / Company of Foreign Interests having physical presence and operating in the Republic of Cyprus provided that the employer meets certain qualification criteria:-

  1. The majority (51%)* of the employer – company’s shareholders are foreign shareholders. The following cases are excluded:

-          Public companies registered in any recognized stock exchange

-          Former offshore companies that were operating in Cyprus by approval of the Cyprus Central Bank, before the change of their offshore status.

-          Cypriot shipping companies.

-          Cypriot companies of high technology / innovation, that will be certified by the Deputy Ministry of Research, Innovation and Digital Policy based on the applicable framework.

-          Cypriot pharmaceutical companies or companies operating in the fields of biogenetics and biotechnology.

-          Persons who have acquired Cypriot citizenship by naturalization based on economic criteria, given that they will prove that the conditions under which they were naturalized are still met.

  1. The percentage of foreign shareholding stake in the employer – company must represent an amount equal to or greater than the amount of the required direct foreign capital investment.
  1. The direct foreign capital investment must amount to at least €200.000,00 (for the prescribed purposes) and must be legally brought in Cyprus form abroad (through the prescribed means).
  2. The employer – company should operate from its self-contained offices in Cyprus; to be more precise, the employer – company must have physical presence in Cyprus.

Nonetheless, an approved International Business Company (of foreign interests) has the right to employ a certain number of foreign nationals in official or key positions, such as directors, managers, middle management executives and other key personnel; such employees may be employed in any of the following key-positions:

(a)   Directors (Directors or Partners registered in the Registrar of Companies and Official Receiver; General Managers of branches and of mother companies of alien companies; Departmental Managers; Project Managers) with minimum gross monthly salary at €4.000,00 (subject to periodical adjustments depending on fluctuations in the wage index).

(b) Middle management executives and other key personnel (upper / middle management personnel and other administrative, secretarial or technical staff) with minimum gross monthly salary in between €2.000,00 (subject to periodical adjustments depending on fluctuations in the wage index).

(c) Specialists in specific fields (Software and System Engineers, Application and Data Architects, Information and Communication Technology and Enterprise Solution Architects, Technical Assurance Professionals, Telecom and Space Engineers, Data scientists, Machine Learning Engineers, Web Developers and designers, UX User Experience Professionals, Quantitative Analysts, Quality Assurance Analysts, Mobile Application Developers, Augmented Reality/ Virtual Reality Programmers, Digital Marketing Specialists, Video Production Multimedia Specialists for Mobile Apps and Software, Analysts for Mobile Apps and Software, Designers of Prototype for Mobile Devices, DevOps Engineers, Cyber Security Specialists, Artificial Intelligence, Robotics and Big Data Specialists, Pharmaceutical Formulation Technologists, Pharmaceutical Engineer Validation Specialists, Pharmaceutical Patents Specialists, Pharmaceutical Regulatory and Quality Assurance Professionals, Marine Engineers, Naval Architects) with minimum gross monthly salary in between €2.000,00 (subject to periodical adjustments depending on fluctuations in the wage index).

(d)   Support staff; if it is proved that there are no qualified Cypriots or European citizens available, the employer – company may employ, through the standard procedure established for General Employment, third country nationals in posts in this category.

Overall, the Revised Policy introduced some ‘minor’ amendments for enhancing its application by persisting and emphasising on the employers’ business and physical presence. The amendment of the previous Policy was imperative in view of the need to ensure its proper implementation by filling in any gaps that could operate in a way that would facilitate the misuse of the procedure.

Author: ANTRIA ARISTODEMOU

 

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