Increasingly, Cyprus is chosen for start-ups, especially by representatives of countries outside the EU. Business immigration is supported by the government as a successful project because it boosts both the Cyprus economy and its image.
Cyprus Startup Visa
Cyprus has quite loyal legislation regarding the development of start-ups. There is a Cyprus start-up visa for potentially promising business persons who promote innovative ideas and know-how to implement them. Moreover, venture capitalists can provide the initial capital for starting an enterprise. For this, crowdfunding or other sources of funding are involved.
The Cyprus Startup Visa is a unique opportunity for progressive entrepreneurs to bring their innovative business idea to life. Entrepreneurs can get real value from their ideas and become residents of a European country (along with their families). Together with the visa, the family of an entrepreneur also receives a residence permit in Cyprus according to a simplified procedure.
It is especially important to open a start-up visa in Cyprus for the development of innovations and conducting research activities. A visa can be obtained by both the founder of a startup company and its key managers (up to 5 people). However, on condition that the headquarters for the enterprise will be established.
What are the requirements for obtaining a Cyprus Startup Visa?
- An applicant must be 18 years old;
- Fill out an application using a special form;
- Confirm the availability of the necessary funds for a start-up (20 thousand euros);
- Make a business plan for a start-up project;
- Know Greek or English;
- Have a diploma of completed higher education.
In case a start-up company already exists, the applicant must submit an audit report. Since 2018, the government has been granting permanent work permits and permanent residence in Cyprus if the project can prove itself to be truly successful. It means that there is no time frame for the development of a business.
Thus, investment immigration is very developed here. Foreigners can obtain a long-term residence permit in Cyprus, and after 7 years of residence in the country, they can apply for Cypriot citizenship for themselves and the whole family.
What forms of companies operate in Cyprus?
In Cyprus, foreign investors can purchase or open a company that operates in one of the official forms of activity. Let’s list the most popular ones:
Private company limited by shares
Shareholders’ liability is limited to their equity interests. The company must have a memorandum of association and articles of association signed by the founders or their authorized representatives. The minimum number of shareholders is 1, and the maximum is 50.
It is possible to use nominee shareholders to maintain confidentiality. The minimum number of directors is 1. They can be local or foreign.
Open joint-stock company limited by shares
The minimum number of members is 7. The minimum number of directors is 2. It can issue bearer shares. An invitation to the public to subscribe for shares or promissory notes is permitted. The minimum share capital is € 25,629.
Partnership or joint venture (general or limited)
A partnership is formed by two parties and usually consists of 20 individuals or legal entities. A partnership with unlimited liability is jointly and severally liable together with other partners without setting boundaries for the payment of all debts and obligations.
A limited liability partnership consists of at least one general partner who is responsible for all debts and obligations of the partnership.
Branch of a foreign company
The parent company bears full responsibility for the obligations of the branch. The branch permanently represents the non-resident company in Cyprus and is not a separate taxable entity from the parent company.
The branch company must have the same name as the parent company. For the branch, it is necessary to appoint a representative resident of Cyprus (natural or legal person) who will interact with the tax authorities.
What does the registration of a business in Cyprus give?
Registration of a company in Cyprus makes it possible not only to transfer business assets to the European zone but also to obtain a passport of a country that is a member of the European Union. Cyprus recognizes second citizenship, which means you can remain a citizen of your country.
Advantages of a Cyprus resident company
- Low operational and administrative costs, a full range of business support services;
- The ability to optimize tax payments and incentive taxation;
- Free transfer of currency between accounts in Cyprus and other countries, there are no restrictions on currency exchange;
- Additional tax incentives: 0% income tax rate for companies specializing in the sale of securities, etc;
- Mergers, reorganization procedures, transfer, and exchange of shares and assets are not subject to taxes.
The VAT rate in Cyprus for individuals is 19%, while there are many opportunities to take advantage of preferential taxation. The dividend tax for tax residents of the country is 17%. Capital gains tax for legal entities is 20%. The corporate tax rate in Cyprus is 12.5%. It is one of the lowest rates in the EU.
Conditions for obtaining Cypriot citizenship
Invest at least 2.5 million euros in the purchase, creation, or participation of a Cypriot company or invest at least 2 million euros in an alternative investment fund.
If you choose the first option, the company must employ at least 9 citizens of Cyprus or EU member states.