By: N. Pirillides & Associates
Cyprus is an attractive solution for foreign companies and due to its competitive advantages always provides fruitful grounds for attracting companies and investments. It is an international business centre and an ideal point of entry to the EU with a strategic location.
As an EU member, it allows businesses to enter and do business from and within the EU and beyond. Cyprus has a transparent and attractive tax regime with competitive tax rates and a wide range of double taxation treaties with other countries, as well as a very low corporate tax rate of 12.5%. Cyprus also has a comparatively low set-up and operational costs for companies.
Relocating a company to Cyprus has become more attractive through the introduction of the framework known as the Fast-Track Business Activation mechanism (FTBA). This mechanism has been implemented very recently by the Cyprus government (May 2021) in order to promote and attract foreign business relocation/ re-domiciliation to Cyprus, as well as to offer fast and competent services to new and existing entities of foreign interests requiring to establish presence in Cyprus.
Non-EU companies can benefit from this framework in order to continue their EU trading activities without interruption. Undeniably it has become a very appealing solution for UK businesses post-Brexit.
Key benefits of the FTBA
The FTBA is operated by the Ministry of Energy, Commerce and Industry (MECI) and includes the following ‘service package’:
Guidance for establishment and operation of companies in Cyprus and provision of information for all the necessary permits required by the company in order to start operations.
Assistance and accelerated procedures from a single point of contact to obtain all necessary local registrations for the establishment or re-domiciliation of companies in Cyprus, including its name approval, registration, registration with the Employers’ Registry (ERGANI) and Social Insurance Registry, VAT and Income Tax registration.
Eligibility criteria available for employing third-country (non-EU) nationals under more favourable conditions and facilitation for an expedited issuance of all necessary residence and employment permits for third country nationals (and members of their family) required for the operation of companies in Cyprus.
Eligibility criteria
Companies wishing to use the FTBA mechanism should meet the quantitative and qualitative criteria below, thus contributing to the country’s economic growth:
A new company is required to submit a reliable 5-year business plan as to the company’s goals, activities and strategy illustrating growth potential.
Existing companies should have a minimum turnover of €500.000 annually for 3 out of the last 5 years of operation.
Companies should have a physical presence in Cyprus, including establishment/operation of autonomous premises and staff i.e. independent from any private residence.
Creation of the Point of Single Contact
MECI has also created a dedicated and specialized business support centre, the Point of Single Contact (PSC) which aims at improving the quality of services provided to existing and new companies based in Cyprus. The PSC facilitates the establishment of businesses in the services sector and the cross-border provision of services within the internal market. The PSC shall have a coordinating role between service providers and competent authorities which will facilitate the establishment of businesses.
Our law firm is in a position to assist businesses wishing to relocate to Cyprus, in applying for the incentives mentioned above, as well as providing any other relevant assistance i.e. locating the most suitable real estate, performing the required due diligence on the property etc.
For more information you may contact us at [email protected].
