Registration of a Company of Foreign Interests in Cyprus and employment of third country nationals
Author: Maria Rousia, Associate Lawyer at Dionysiou & Partners LLC (Cyprus)
Although generally a Cyprus company must give priority in employment recruitment to Cypriots and EU nationals before attempting to employ third country nationals, there is an exception enabling companies of foreign interests to give priority to the employment of third country nationals instead of locals and EU nationals, provided that certain requirements are met.
The main aim of the above exception was the attraction of foreign investments. The criteria that companies must meet in order to benefit from this decision, the categories of staff and the maximum numbers of third country nationals who can be employed in each category of staff are described below.
The company must be a private company and third country shareholders should own the majority of the company’s shares (percentage equal or more than 50% of the total share capital). It is important to note that a company is considered eligible even if the majority shareholder is not considered as third country national provided that he/she acquired the Cyprus citizenship through the Cyprus Investment Program.
Also, there must be a foreign direct investment of capital amounting to at least €171.000.
In case where the percentage of foreign participation in the company’s share capital is equal to or less than 50% of the total share capital, in order for the company to be considered as suitable, the foreign participation should represent an amount equal to or greater than the amount of €171.000.
In the case where other legal entities are the shareholders, the whole chain of ownership up to the ultimate beneficial owners (hereinafter the “UBOs”) should be declared and documented. In this case, the criteria listed above apply also to them.
Finally, the company must operate in independent offices in Cyprus.
A company is entitled to employ third country nationals in the following categories, provided that they first obtain temporary residence and employment permits.
A. Directors/Senior Managers
The maximum number of third country employees for this category is five persons, unless the Civil Registry and Migration Department (hereinafter the “CRMD”) is satisfied that the employment of a greater number is justified, depending on the circumstances of each company.
The minimum acceptable gross monthly salary is €3.872.
Directors or partners, general managers of branches and of mother companies of alien companies and managers of departments are included in this category.
B. Middle management executives and other key personnel
The maximum number of third country employees for this category is ten persons, unless the CRMD is satisfied that the employment of a greater number is justified, depending on the circumstances of each company.
The acceptable gross monthly salary is between €1936 – €3871.
Upper/middle management personnel, other administrative, secretarial or technical staff are included in this category.
C. Support staff
There is no maximum number for the employment of third country nationals under this category, provided that the necessary approvals from the Department of Labour have been obtained.
The third country nationals that are not included in the above categories are included in this category.
Companies are expected to fill in positions in this category with Cypriots or EU nationals but in the case where there are no such qualified persons available, a company may employ third country nationals in posts in this category by following a specific procedure.
Employment of a greater number of third-country nationals in Companies of foreign interests
In order to convince the competent authorities that a greater number of third country employees need to be employed in the Company of Foreign Interests, there are 2 different procedures that can be followed depending on the volume of the additional third-country employees that the company is willing to employ:
a. The first procedure is followed when the company is willing to employ a small number of additional third country national employees (e.g. 1-3) through the submission of an official letter to the CRMD whereby specific additional information will be provided.
b. The second procedure is followed when the company is willing to employ more than three additional third country national employees and it is done through the Ministry of Interior. The CRMD cannot give its consent for the employment of more than 3 additional third-country employees and this can only be done by the Ministry of Interior.
Our office is familiar with these procedures and able to advise on these specific matters.
Conditions for third country nationals
A third country national must meet specific requirements set by the Cyprus legislation relating to their employment in the Republic. Our office can provide detailed lists of the required documents along with explanations for each requirement for the avoidance of any possible misunderstanding.
Validity of Temporary Residence and Employment Permit
Where all conditions in the law are met, the third country nationals are granted a temporary residence and employment permit. The validity of the permits depends on the duration of the employment contracts and can be up to two years, with a right of renewal.
The first two categories of third country national employees (i.e. Directors and Middle management executives or other key personnel) have the right to apply for family reunification, meaning that third country nationals who are family members (spouse and minor children) can enter and reside in Cyprus after the employee/sponsor has followed the procedure for family reunification.
How Dionysiou & Partners LLC can assist:
Our experienced professionals can assist with the preparation, collection and submission of all required documents for the registration of the company with the Cyprus Registrar of Companies and then with its registration with the CRMD as a Company of Foreign Interests. We can also provide assistance in drafting of employment and rental contracts and obtaining the appropriate permits for third-country national employees and their family members.
Further to the above, we can assist with the opening of bank accounts not only for the company but also for the employees and we can proceed with the relevant registrations with the Tax Authorities and Social Insurance Services.
It is worth noting that we do not only undertake to submit all applications to the relevant departments, but we are in constant contact with the Cyprus authorities in order to avoid any delays and ensure that we will have the expected outcomes as swiftly as possible.
Our office undertakes the entire process from start to finish at reasonable prices. Please feel free to contact Dionysiou & Partners LLC at email@example.com to discuss how we can be of assistance to you.