Start-up visa programme
On February 15 2017 Cyprus adopted the start-up visa (otherwise known as the 'start-up permit scheme') for third-country nationals interested in residing and investing in innovative businesses in Cyprus.(1) The national plan will initially be applied for two years, during which 150 residence permits will be available.
The scheme is part of the Policy Statement on Strengthening the Entrepreneurial Ecosystem. It allows talented entrepreneurs from non-European Economic Area countries (either individual or group investors) to reside in Cyprus and establish, operate and develop their own innovative start-up companies with high growth potential, provided that they meet certain criteria.
The scheme's main criteria include the following:
- The company must have €50,000 of capital, which may include venture capital funding, crowdfunding or other sources of funding and an innovative business or business plan.
- The company's principal offices and a tax residency must be registered in Cyprus.
- The exercise of management and control of the companies must be conducted from Cyprus.
- The third-country national must have an undergraduate degree or an equivalent professional qualification and a good knowledge of Greek and/or English.
The business will be considered 'innovative' if at least 10% of its operational expenses during one year in a three-year period are used for research and development.
The start-up visa programme presents two options:
- the individual start-up visa plan; and
- the team (or group) start-up visa plan.
A start-up team may consist of up to five founders or at least one founder and additional executives or managers (ie, C-suite employees) who are entitled to stock options. In any case, the team must not exceed five members. The founders who are third-country nationals must own, in total, more than 50% of the shares of the company. The founder must have access to €25,000 in capital. If there are more than two founders, the capital must amount to at least €50,000 in total.
Benefits of the programme include:
- the right to a residence and work permit issued for one year, with the possibility of renewal for at least another year;
- the ability for the founder to be self-employed or employed by his or her own company in Cyprus;
- the ability for senior executives to be employed by the founder's company registered in Cyprus;
- permission to reside in Cyprus without a maximum time limit in case of the company's success;
- the right to family reunification in case of the company's success;
- the ability to hire a specific number of foreign staff (from non-EU countries) without prior approval from the Department of Labour in case of the company's success.
The Ministry of Finance or the relevant authority appointed by the ministry will evaluate the company's success after two years. During the evaluation, a number of factors will be considered, such as the number of employees, taxes paid in Cyprus, exports, income and any additional investments made in the company.
The Cyprus start-up visa programme is an excellent opportunity for talented entrepreneurs and their executives from third countries to invest, work and live in Cyprus. Cyprus is considered to be the fifth safest country in the world, one of the best places to do business within the European Union and a commercial crossroads between Europe, Africa and Asia. Apart from the tax advantages, it offers many additional incentives to entrepreneurs and their businesses.
For further information on this topic please contact Jenny Tryfonos at Savva & Associates Ltd by telephone (+357 22 516 671) or email ([email protected]). The Savva & Associates Ltd website can be accessed at www.savvacyprus.com.
(1) A 'third-country national' is defined as a non-EU or EEA citizen without the right of free movement within the European Union.