On 30/11/2022, the Council of Ministers approved the Amendment of the Policy for the Registration of Companies in the Register of Foreign Interest Companies.
The Decision modifies the eligibility criteria of foreign interest companies and specifically includes the criterion of a company’s obligation to prove an initial investment in the Republic of at least €200,000, which should be proven by presenting the appropriate certificates.
The Decision enters into force on December 12, 2022.
The Council of Ministers approved on October 15th 2021, the “Strategy for Attracting Businesses for Activities or/and Expansion of their Activities in Cyprus”.
The Strategy is a very important initiative towards attracting both international investments and talent. The existing investment policy has been radically reviewed, broadened and simplified to include a series of actions and reforms in several areas of intervention, aiming to enhance Cyprus’ position as an international high-growth business centre.
The careful and thorough planning ensures that the benefits derived from the successful implementation of the Strategy will significantly contribute to redefining the Cyprus growth model.
As of 1 January 2022 the current “Fast Track Business Activation Mechanism” will evolve into the “Business Facilitation Unit (BFU)”. The Unit will be the single point of contact for foreign companies.
The purpose of the new unit will be the fast and efficient processing of requests received from foreign companies for the establishment of a company in Cyprus or the expansion of activities of existing companies.
Eligible businesses must meet the following criteria:
− The majority of the company’s shares are owned by third-country nationals.
− If the majority of the company’s shares are not owned by third-country nationals (i.e equal to or less than 50%) then the company is eligible if the foreign participation represents an amount of at least €200.000.
In both cases above, the ultimate beneficial owner (UBO) should deposit or invest an amount of at least €200,000, for the purposes his/her business activity in Cyprus. If more UBOs exist, then this amount can be deposited or invested by a single UBO or collectively.
− Public companies registered on any recognised stock exchange.
− Companies of international activities (formerly off-shore), which operated before the change of regime, whose data are held by the Central Bank.
− Cypriot shipping companies.
− Cypriot high-tech/innovation companies*
− Cypriot pharmaceutical companies or Cypriot companies active in the fields of biogenetics and biotechnology.
− Companies of whom the majority of the total share capital is owned by persons who have acquired Cypriot citizenship by naturalization based on economic criteria, provided that they prove that the conditions under which they were naturalized continue to be met.
* An enterprise qualifies as ‘High Technology Company’ if:
(a) it is already established and has a presence in the market, and
(b) it has a high level or experimental R&D intensity, and
(c) it developed product/s that fall into one of the following categories: products related to aviation and space industry, computers, electronic and telecommunication products, pharmaceuticals, biomedical, research and development equipment, electrical machinery, chemicals, non-electrical machinery.
Services of the BFU
I. Provision of services relating to the establishment of businesses:
Ability to complete all registrations for the establishment of a business at the One-Stop Shop Section of the Business Facilitation Unit:
− Approval of company name and registration (in collaboration with the Department of Registrar of Companies and Intellectual Property)
− Registration in the Employers’ Register (Social Insurance Services)
− Entry in the Tax Register for Indirect Taxation (VAT) and Direct Taxation (Tax Department)
II. Guidance regarding the necessary permits for the activation and establishment of businesses in Cyprus:
Guidance throughout the business’s life cycle, from the development of a business plan, the guidance on necessary licensing, the placement of the business in the market, the registration of the business entity and / or the trade mark of the business, the recruitment of employees and many other related issues.
III. Registration of companies in the Register of Companies with Foreign Interests
Evaluation by the Unit whether companies wishing to employ nationals from third countries fall under the criteria of companies of foreign interests, as defined below. In case of eligibility, these companies will be registered in the above-mentioned Register, which will be notified to the Civil Registry and Migration Department (CRMD).
The procedure to be followed under the Business Facilitation Unit is described as follows:
a) Businesses wishing to transfer their operations or expand their activities in Cyprus, must express their interest by submitting a relevant request to the Business Facilitation Unit of the Ministry of Energy, Commerce and Industry through email. The email must be accompanied by a letter of expression of interest for the establishment or expansion of their activities in Cyprus. The letter of intent should include a brief description of the company, activities (nature of business as stated in the Articles of Association), number of staff, expansion plans, etc. The request supported by the necessary documents (Annex I, only copies of the certificates are required in electronic form) should be sent to the following email address: firstname.lastname@example.org.
b) The Unit will inform the investor in writing of the next steps and the documents that would have to be submitted in accordance with the services he/she wishes to utilize.
c) All the necessary registrations for the establishment of the company will be completed within seven (7) working days from the date of submission of all the necessary documents to the Ministry of Energy, Commerce and Industry.
The confirmation of the registration of an eligible company in the Register of Companies with Foreign Interests will be done by electronic means (by email).
Please note that, the certificates to be sent as accompanying documents should be numbered and named exactly as mentioned in Annex I.
Applications must only be sent to the above-specified email (email@example.com).
Certificate of Incorporation
|2||Certificate of Registered Office Address|
|4||Shareholders’ Certificate, proving that the percentage of foreign participation in the company’s share capital is over 50% of the total share capital.
In the case where legal entities (e.g. local or foreign companies, trusts) are the shareholders, a shareholders’ structure diagram presenting the whole chain of ownership up to the final owners (natural persons who are the ultimate beneficial owners) should be declared and documented.
|5||Director’s Affidavit on the company’s ownership (from one of the directors if many)|
|6||Ultimate Beneficial Owners’ valid passport(s)|
|7||Articles of Association of the company|
|8||Rental agreement document or title deed or a sale document for the offices of the new business (it must be duly stamped if its value equals the annual amount of €5,000 or more)|
|9||Audited Financial Statements (for companies already operating in Cyprus)|
|10||Tax Clearance Certificate for the company (for companies already operating in Cyprus)|
|11||If applicable, deposited amount of at least €200.000, supported by a Bank SWIFT or other similar document which proves a foreign direct investment by the ultimate beneficial owner, legally admitted to Cyprus form abroad. In the case where the investment has not directly been made by the UBO, the relation of the investor to the UBO must be proven and documented.|
Business Facilitation Unit (BFU)
Ministry of Energy, Commerce and Industry
Trade Service Building (3rd Floor)
10 Andrea Araouzou Str.,
Telephone: +357 22867193, +357 22867181
Fax: +357 22376493