INTRODUCTION:

Effective from November 17, 2023, Cyprus has introduced significant changes to its application procedures for proceeding with the Companies of Foreign Interest Registration. This alteration emphasizes online submission exclusively through a designated electronic form, simplifying the process for prospective businesses.

In this article, we delve into the updated procedures and criteria, aiming to elucidate the streamlined approach toward attracting international investments and talent.

GENERAL INFORMATION:

Transitioning from the “Fast Track Business Activation Mechanism” effective January 1, 2022, the establishment of the ‘Business Facilitation Unit’ (BFU) signifies a significant step towards facilitating foreign companies’ operations in Cyprus. Serving as the primary point of contact, the BFU is dedicated to expediting the processing of requests related to company establishment or activity expansion.

ELIGIBILITY CRITERIA:

Eligibility for registration entails meeting specific criteria, including:

1. majority of the company’s shares are owned by third-country nationals; and

2. In case that, the percentage, of the company’s shares, owned by a third-country national is equal or less than 50%, the company is eligible if that foreign participation has a value of at least €200,000-.

Important Note: the Ultimate Beneficial Owner (UBO) must deposit a minimum amount of €200,000- in an account held by the Company of Foreign Interest with a credit institution licensed by the Central Bank. Alternatives: the company may submit UBO’s evidence of an investment amounting to €200,000- for the purposes of operating its business in Cyprus, such as an i) office purchase, ii) office equipment purchase, etc.

WHAT ARE THE MAIN BENEFITS:

1. Fast Track Process:

   If the applicant is eligible and the application fulfills the requirements of the Companies of Foreign Interest Registration, then will be completed in no more than 5 (Five) business days from the date of duly submitting the e-form

2. Capital Injection:

   The UBO’s capital requirement of €200,000- may and can be used at all times for the operating expenses of the Company of Foreign Interest.

3. Immigration Permits:

   UBOs can apply for a work permit and residency through the Company along with their family members and dependents. Hence, Non-European Union (EU) citizens can be granted the right to reside and be employed in Cyprus.

4. Third-Country Nationals:

   Company of Foreign Interest Registration allowes to employ Third-Country Nationals who are able to obtain a work permit through this special exemption and again along with each employee’s family and dependents. Hence, UBOs are allowed to engage their designated workforce and trusted advisors with them.

5. Citizenship:

   Upon 7 (Seven) years (less under certain exemptions) all those that have been legally residing in Cyprus, will be able to apply for Cypriot citizenship.

6. Low Applicable Taxes:

   UBOs of Companies of Foreign Interest also benefit from both the significantly low individual and corporate tax rates applicable in Cyprus. Find out more by contacting us.

APPLICATION PROCEDURE:

Prospective Companies of Foreign Interest seeking to establish or expand their operations in Cyprus must adhere to a structured application process:

1. Submission of BFU Application e-form: Applicants are required to complete the electronic application form available on the designated webpage. The form entails a ‘Letter of Intent’ detailing the following along with necessary supporting documents:

• company’s profile,
• description of activities,
• staffing, and
• expansion plans.

2. Notification and Status Updates: Upon submission, applicants receive email notifications confirming receipt and subsequent updates on the application’s status.

3. Registration Completion: Eligible applications undergo swift processing, with registration typically finalized within 5 (Five) business days from submission.

4. Confirmation: Upon successful registration, applicants receive a confirmation letter via email, signifying completion of the process.

CONCLUSION:

The revamped application process for Cyprus’s Companies of Foreign Interest Registration reflects a concerted effort to streamline procedures and enhance the country’s appeal as an international business destination.

Our office is in a strong position to provide you with a comprehensive services package for activating and initiating your new Company of Foreign Interest Registration, along with the on-going compliance and a holistic onboarding service for each new employee and family members.