In today's rapidly evolving global business landscape, Cyprus has emerged as a vital hub for companies looking to improve their operational efficiency and expand their market reach, especially into European and broader international territories. The island's appeal is significantly boosted by its classification of "Companies of Foreign Interests," a designation created by the local government to draw in foreign businesses. This designation comes with a variety of advantages, all designed to smooth the transition and operation of foreign companies into Cyprus's economic fabric, thereby enhancing their global competitiveness.
A key benefit for companies under this classification is the simplified procedure for hiring highly skilled professionals from non-European Union countries. By registering with the Business Facilitation Unit (BFU), these companies gain privileged access to the Civil Registry and Migration Department (CRMD), allowing them to secure work permits for their employees within a very short period of about one month. This expedited process effectively bypasses the longer and more complex processes usually handled by the Department of Labor, which are generally mandatory for third-country nationals seeking employment approval in Cyprus.
Defined officially, a ‘foreign interest company’ in Cyprus is one that, upon meeting specific regulatory criteria, is authorized to hire non-EU nationals. Such companies facilitate the acquisition of work and residence permits for their employees and their families under favorable conditions, thereby promoting a supportive environment for foreign workers. This reflects Cyprus's broader strategy to attract international investments and skilled labor, aligning with the government's approval, as of October 15, 2021, to foster Cyprus as a burgeoning international business center. Further administrative improvements, like the establishment of the BFU on January 1, 2022, have further streamlined the operational framework for foreign businesses in Cyprus.
To qualify as a company of foreign interest, certain criteria must be met. Predominantly, the company should be majorly owned by third-country nationals—if not the outright majority, a minimum of an amount equivalent to EUR 200,000 in foreign participation is required. Additionally, the ultimate beneficial owner (UBO) is required to demonstrate financial commitment by depositing at least EUR 200,000 in a local bank, specifically with the Central Bank of Cyprus, or by showing equivalent investment directly into the business operations in Cyprus, such as in office infrastructure or equipment.
For registration as a foreign interest company, a complete set of documents is required. This includes the Certificate of Incorporation, Registered Office Address, and certificates verifying the directors and shareholders. Especially important is the Shareholders’ Certificate, which must verify foreign ownership exceeding 50% of total share capital. In cases where shareholders are entities rather than individuals, a detailed ownership structure diagram must be presented, mapping out the ownership to the ultimate beneficial owners, thus guaranteeing compliance and transparency to regulatory standards.
Employment of third-country nationals by foreign interest companies in Cyprus is subject to specific employment criteria. These employees must command a minimum gross monthly salary of EUR 2,500. Additionally, for those already employed at a BCS Key Personnel level and earning a monthly salary of at least EUR 2,000, there is an opportunity to renew their residence permits for five additional years, up to December 31, 2026, without any requisite increase in salary. This policy facilitates continuity and stability for both the employee and employer.
Managing the complexities of setting up and managing a Company of Foreign Interests in Cyprus requires expert legal and fiscal guidance. At Savva & Associates, our team of experienced immigration lawyers is equipped to provide comprehensive support at every stage—from meticulous documentation preparation to optimizing tax liabilities, ensuring that every step matches perfectly with your business objectives. We encourage you to reach out to discover how our specialized services can help boost your business's potential in the dynamic and thriving economic environment of Cyprus.