If you are considering employing third-country nationals in Cyprus, it is crucial to understand the requirements for obtaining temporary work or residence permits. Our guide provides a comprehensive overview of the criteria and processes involved in securing these permits in Cyprus.

The New Strategy

The Council of Ministers, with its Decision dated 15.10.2021, approved the New Strategy for attracting companies of foreign interests to expand their activities in Cyprus.

The new Strategy is in force since 2.1.2022 and notably, has replaced the previous policy on the employment third country nationals by companies of foreign interests.

Under the New Strategy, companies are no longer restricted in the number of highly paid third-country nationals they can employ, and they are not required to perform a labor market check first. However, all companies must ensure that within five years, at least 30% of their staff are Cypriot or EU citizens. Furthermore, while the current categories of employees are still used for administrative and statistical purposes, the category of "Specialists" is now broader and not restricted to specific jobs or skills. Lastly, according to the New Strategy, applications for residence and employment permits in Cyprus are processed speedily, that is within one month from submission provided that they are duly completed. This time limit shall not apply if the information or documents submitted in the applications are insufficient and in such a case the examination time is increased.

Eligibility Criteria for Companies

To hire third-country nationals, a company must meet specific eligibility criteria as per the applicable legislation. The following outlines the main requirements:

1. Ownership by Third-Country Nationals: Companies where the majority of shares are held by nationals from countries outside the EU qualify for hiring third-country nationals.
2. Foreign Investment Requirement: If a company does not have a majority of shares owned by third-country nationals (50% or less), it must have a foreign investment of at least EUR 200,000.

In both scenarios above (points a & b), the Ultimate Beneficial Owner (UBO) must deposit EUR 200,000 into a company account in a credit institution approved by the Central Bank of Cyprus.

Alternatively, evidence of an investment of EUR 200,000 in Cyprus, such as purchasing office space or equipment, can be provided. Importantly, if multiple UBOs exist, they may contribute collectively or individually to meet this requirement.

The investment criterion of EUR 200,000 must be demonstrated through appropriate documentation, such as bank statements or proof of office and equipment purchases.

3. Other Eligible Companies:

1. Public companies listed on any recognized stock exchange.
2. Companies with international operations (formerly offshore) that operated before regulatory changes and whose details are recorded with the Central Bank of Cyprus.
3. Cypriot shipping companies.
4. Pharmaceutical companies or those engaged in the biogenetics and biotechnology sectors in Cyprus.
5. Companies owned by individuals who obtained Cypriot citizenship through economic investment, provided the conditions of naturalization are still met.
6. High-tech or innovation companies in Cyprus meeting specific criteria, such as high research and development intensity or market presence with products in industries like aerospace, electronics, pharmaceuticals, or machinery.

Criteria for Third-Country Nationals

1. Highly Skilled Employees:

• All employees seeking a permit must be classified as Highly Skilled Employees.
• They can be further categorized by the employer for business structuring purposes into Directors, Middle Management/Key Personnel, or Specialists.
• The minimum gross monthly salary for Highly Skilled Employees must be at least EUR 2,500.
• A grace period until 31st December 2026, allows renewing permits for current key personnel with a minimum salary of EUR 2,000.
• There is no cap on the number of Highly Skilled Employees a company can employ.
• Employees must have relevant academic qualifications (like a university degree) or professional experience (at least two years in a similar role).
• Employment contracts must be for a minimum of two years and duly stamped in accordance with the applicable legislation.

2. Support Staff:

• Employees who do not qualify as Highly Skilled are considered Support Staff and must apply for a General Employment permit through the local hire route, which, among others, requires a positive recommendation from the Department of Labour in Cyprus.

3. Nationality Quotas:

• Starting in 2022, companies are required to ensure that at least 30% of their workforce are Cypriot or EU nationals within five (5) years (by 31st December 2026).
• From January 2, 2027, this ratio will be reviewed, and companies not maintaining the 70:30 ratio may be evaluated on a case-by-case basis.

Registering a Company with Foreign Interests

To employ third-country nationals, a company must register with the at the Register of Foreign Interest Companies of the Civil Registry and Migration Department in Cyprus. If a company has not already done so, then it shall proceed as follows:

1. Express Interest: Companies must submit a request to the Business Facilitation Unit (BFU). This request should outline the intent to establish or expand activities in Cyprus.
2. Include Necessary Documentation: The request should include a letter describing the company, its activities, staff count, and expansion plans. All relevant supporting documents should be attached and labelled appropriately.
3. Follow-Up Steps: The BFU will check whether companies are eligible and will grant them a written confirmation of their registration at the new Register of Foreign Interest Companies and may provide guidance on the next steps and any additional documents required.
4. Completion Timeline: The registration process typically takes seven working days.

Note: Companies already registered with the Civil Registry and Migration Department (CRMD) as companies of foreign interests are exempt from this requirement.

Applying for a Temporary Work/Residence Permit

Once registered, companies can apply for a Temporary Work/Residence Permit (an “International Companies Permit”) for their third-country national employees. The application process involves several steps:

1. Submission to the CRMD: The third-country national or their employer submits an application form with all supporting documents to the CRMD.
2. Entry into Cyprus:

• Highly Skilled Employees may enter with a visa from a Cypriot consulate or obtain an entry permit from the CRMD.
• Support Staff must obtain an entry permit from the CRMD.

3. Biometrics and Registration: Upon arrival, employees must visit the CRMD in person for biometric data collection (fingerprints, photograph, and signature).
4. Processing Time: It takes approximately four weeks for the CRMD to process the application, assuming all documentation is in order.
5. Issuance of Permit: Once approved, the employee receives a residence card, and they cannot begin employment until this permit is officially granted.

Family Reunification and Dependent Permits

1. Family Reunification: Spouses and minor children of Highly Skilled Employees are eligible for family reunification and can apply for residence permits once the employee has obtained their International Companies Permit.
2. Dependent Visitor’s Permit: If family members do not immediately qualify for reunification, they can apply for a temporary Dependent Visitor’s Permit. This is available to:

• Parents/in-laws.
• Partners (with proof of relationship).
• Adult children (up to 25 years old or within one year post-graduation).

Additional Information

• Permits for third-country nationals are valid for up to three (3) years, with renewal options.
• There is no maximum residency period for Highly Skilled Employees as long as they hold a valid permit.
• Support Staff are subject to General Employment duration restrictions.
• Permit holders must not leave Cyprus for more than three (3) months, or the permit may be cancelled.
• Employees can change employers within or outside companies of foreign interest, provided specific conditions are met, such as securing new employment within one month of leaving the previous job.

For further information, you can also access the Migration Department’s website here.

Our associates are here to assist you with navigating these requirements and ensuring your application process is smooth and successful. For more personalized guidance, feel free to contact us at info@economoulegal.com