With the recent modifications to its Start-Up Visa Scheme, Cyprus is taking bold measures to solidify its reputation as a centre for innovation and entrepreneurship. The modifications, which will take effect on January 1, 2025, are designed to attract senior executives and start-up founders from non-EU countries by providing new incentives and increased flexibility.
The government’s strategy to diversify the economy and fortify the local innovation ecosystem is reflected in these updates.
Significant Changes to the Start-Up Visa Program
1. Permits for Extended Residence
Residence permits valid for three years are now available to bearers of start-up visas, as opposed to the previous two. The renewal periods have been extended to two years, in contrast to the original one, which provides long-term stability.
2. Decreased Equity Ownership Requirements
In an effort to facilitate the qualification of diverse teams, founders are now required to possess only 25% of the company’s share capital, as opposed to the previous 50%.
3. Enhanced Workforce Flexibility
An increase from the previous 30% limit allows start-ups to employ up to 50% of their personnel from abroad.
Companies that invest €150,000 or more in Cyprus are permitted to employ additional foreign personnel in excess of this threshold.
4. Criteria for Renewal
In order to renew their visa after the initial three years, start-ups must satisfy one of the following criteria:
Prove a 15% increase in revenue, or
Obtain a minimum of €150,000 in investments.
Additionally, they must demonstrate that they either contributed to a local innovation support initiative, launched at least one service product, or created at least three new jobs in Cyprus.
5. Concentrate on High-Growth Start-Ups
Start-ups that have allocated 10% of their operational expenditures to research and development (R&D) for one of the previous three years and have generated over €1 million in annual revenue will be given a favourable evaluation.
What are the advantages of selecting Cyprus?
Cyprus provides a business-friendly environment, a robust legal framework, and a strategic location that connects Europe, Asia, and Africa. The enhanced Start-Up Visa Scheme serves as an optimal starting point for innovative enterprises that aspire to expand globally.
Advantages of Taxation
Cyprus provides a tax environment that is advantageous for businesses and their investors. International tax burdens are reduced by a robust network of more than 70 double tax treaties. One of the primary advantages is the low corporate tax rate of 12.5%, which is further reduced to 2.5% for technology companies that qualify. For non-Cypriot residents, there are substantial tax exemptions for dividends, capital gains on share disposals, and intellectual property income. Additionally, entrepreneurs may benefit from the notional interest deduction, which could potentially reduce their effective tax rate to as low as 2.5%, and tax losses may be carried forward. In Cyprus, investors in certified innovative companies may receive a tax exemption of up to 50% on their annual taxable income.
Advantages for Cyprus and Entrepreneurs
For entrepreneurs:
The revised scheme offers a simplified route for innovative companies to establish or expand their operations in Cyprus. It is designed to meet the requirements of both established and early-stage businesses by providing expanded workforce options, extended permits, and lowered barriers.
Regarding Cyprus:
By improving the Start-Up Visa Scheme, the government wants to:
Establish an entrepreneurial ecosystem that is flourishing,
Create high-quality employment opportunities in innovative sectors, and
Encourage innovation to promote sustainable economic prosperity.
In what ways can we be of service?
The establishment of your company, including all associated components, as well as the migration process
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