Immigration consultant's notes. Startup in Cyprus.
The Cyprus Startup Visa program was first approved by the island government in February 2017 as a two-year pilot project during which a limited number of visas could be issued - 150.
In February 2019, the Ministry of Finance summed up the results: the outcome did not meet expectations. Only 14 applications were submitted, of which only 6 were approved. Nevertheless, the Government extended the program for another two years. The new edition of Cyprus Startup Visa is valid from March 2019 to March 2021, the visa limit is the same - no more than 150 visas. The aim of the program is to create new jobs, promote innovation and research, develop a business ecosystem and, as a result, the economic development of Cyprus.
In May 2019, the program was revised and extended until March 2023.
Cyprus Startup Visa allows entrepreneurs from third countries, both in a single person and as part of a team (up to 5 people), to enter, live and work in Cyprus to create and develop a startup with a high growth potential.
Who can become a member of the program? Third country citizen:
- being the sole founder of the enterprise (or as part of a team of 5 people), the requirements for enterprise are given below,
- having an amount of € 20,000, which may include venture financing, crowdfunding or other sources,
- having a bachelor's degree or equivalent professional qualifications,
- with good knowledge of Greek and / or English.
Requirements for the enterprise:
- an enterprise should be innovative - if the costs of research and development comprise at least 10% of its operating expenses during one of the three years preceding the filing of the application. In the case of a new enterprise, the assessment is based on the business plan submitted by the applicant,
- the business plan should provide that the head office and location of the enterprise is Cyprus. The head office can be located on the territory of the business accelerator, incubator, digital center or on a joint area with other enterprises.
The deadline for considering applications is 5 weeks.
Owners of Startup Visa are entitled:
- to carry out business activities and reside in the territory of the republic for one year with the possibility of extension for another year without restrictions on the minimum and maximum length of stay during this time,
- to be self-employee or to carry paid work for registered company,
- on family reunification (subject to paid work for registered company),
- recruiting a certain number of employees from non-EU countries without prior approval by the Department of Labor.
Evaluation of the enterprise and the capabilities of the applicant is carried out according to the results of the second year of the company.
For the sake of objectivity, the conditions of Cyprus Startup Visa are among the most affordable in the EU. In addition, the low cost of labor, office space, services of accountants and lawyers must certainly turn the business towards Cyprus.
Attractive are corporate tax rates and personal income taxes. Standard corporate rate of 12.5%; moreover, technology companies producing intellectual property can apply for a tax exemption of 80%, finally reducing the rate to 2.5% effective.
Tax rates for individuals are among the most beneficial in the EU. Income tax is not levied on the first EUR 19,500 of personal income. Non-domicile tax residents do not pay tax on dividends, interest, or rental income earned abroad. Investments in innovative small enterprises can be deducted from taxable income up to an annual limit of 150,000 euros. Dividend payments are exempt from taxation, which allows most entrepreneurs to minimize the overall tax burden.
Cyprus has signed 62 double tax treaties, which guarantees individuals and companies the opportunity to efficiently structure their expenses.
The Cypriot authorities expect that in the near future the granted 150 visas will be successfully distributed.
For questions on organizing Startup projects in Cyprus, obtaining visas, arranging financing, and optimizing taxation, please contact our specialists.