The Cyprus Start-Up Visa Scheme allows entrepreneurs (individuals and/or a team) from countries outside the EU and outside the EEA, to enter, reside, and work in Cyprus in order to establish, operate, and develop a start-up business.
The core goal of the Cyprus start-up visa scheme is to allow talented, non -EU entrepreneurs from countries located outside the EU and outside the EEA to reap the benefits of residing and working in Cyprus, whilst the island benefits from the development of these innovative new businesses. There are two main schemes: (1) the Individual Start-up Visa Scheme; and (2) the Team Start-up Visa Scheme.
Category 1: Individual Start-Up Visa Scheme
An individual start-up visa in Cyprus is granted to any non-EU national who:
- Is the sole founder of the start-up and meets the Enterprise’s requirements, namely:ate.
- The enterprise must be innovative, based on the criterion that its research and development cost represents at least 10% of its operating costs in at least one of the three years preceding the submission of the application, as certified by an external auditor. In the case of a new enterprise without any financial history, the evaluation will be based on a Business Plan that must be submitted to the Ministry of Finance;
- The Business Plan must provide for head offices in Cyprus (which may be co-working spaces or co-location with other entities) and tax domicile of the enterprise in Cyprus.
Category 2: Team Start-up Visa Scheme
The second type of entrepreneur’s visa applies to any team of non-EU nationals, who:
- of a maximum of five founders of the start-up or at least one founder and other senior executives (which should be senior management), and which should total no more than five individuals;
- The above team must possess more than 50% of the company’s shares;
- The founder has access to €10,000. In case of two or more founders, the total capital must be €20,000, which may include venture capital funding, crowdfunding, or other sources of funding;
- At least one of the team members holds an undergraduate or an equivalent professional qualification.
Benefits of the Start-up visa scheme
The individuals and team members who will be approved in the Individual Scheme will benefit from:
- The right to economic activity and residence in the Republic for one year, and with the possibility of renewal for at least another year,
- Right to self-employment or right to paid employment in his/her registered company within the Republic,
- Prospective residence in the Republic without any maximum time restrictions, if the enterprise succeeds, Enjoyment of family reunification, if the enterprise succeeds,
- Prospective recruitment of specific number of personnel from non-EU countries without prior approval from the Department of Labour, if the enterprise succeeds*.
*Success or failure will be assessed at the end of the second year.
Due to amendments to the Income Tax Law there are special tax incentives for individuals who are investing in innovative companies. The investor is considered to be an independent investor if she or he is not already a shareholder of the company, except in the case of a newly established company where the private investors, including the founders, are acting independently from the company.
There are several investments liable to a tax reduction:
- Capital investments,
- Investments in debt instruments,
- Follow-on investments
The tax reduction will not be greater than 50% of the taxable income of the investor during the year that the investment takes place. In case the tax deduction (max 50% of the taxable income of the investor) exceeds €150,000, the reduction shall be carried forward and shall be implemented during the five years following the investment, providing the amount of the reduction is not greater than €150,000 per year.
Procedure and time-frame
An application form for the establishment/operation/development of a start-up business must be submitted to the Ministry of Finance together with a Business Plan and bank statements to verify that the applicant has access to €20,000, plus other supporting documentation.
The Business Plan evaluation is based on 5 criteria, detailed below and which is scored from 0-3; a score of at least 11/15 is required for approval: significant international market with upward trends, high-growth business with an innovative and expandable business model, a clear and sustainable competitive advantage, a management team, and intellectual property protection. The evaluation process will be completed within five weeks. In the case of a positive evaluation, the applicant will receive a Notification of Initial Approval, which grants the right of business activity for two years.
After the Notification of Initial Approval has been issued, applications for relevant visas must be submitted within six months, to the Consular Authority of the Republic or to the Department of Civil Registry and Migration. The application will be reviewed within three weeks.
Subsequently, an application for a work and residence permit must be filed with the Department of Civil Registry and Migration in Cyprus. The application will be reviewed within a period of three weeks.
Dixcart Cyprus can assist with the incorporation of an ‘innovative’ company. We can provide management services, payroll, accounting, and tax compliance services. We can also provide advice regarding the preparation of the documents required for the application. Please contact us: firstname.lastname@example.org.