✔Cyprus is a former UK colony, gaining independence in 1960 and is currently a member of the Commonwealth.
✔ The official languages are Greek and Turkish, but English is widely spoken by professionals and people in the street and shops.
✔ It is located in the eastern Mediterranean Sea, 113 km south of Turkey, 120 km west of Lebanon, and 150 km east of the Greek island of Kastellorizo.
✔ Cyprus has been full member of the EU since 2004 and adopted the Euro and became part of the Eurozone in 2008.
✔ With good weather, sandy beaches, and touristic facilities, Cyprus welcomes over 4 million visitors every year and is well known for its hospitable and welcoming people.
✔ Discoveries of natural gas in the Exclusive Economic Zone (EEZ) and multi-million investments by ExxonMobil, Eni, Total, Kogas and Qatar Petroleum has upgraded the country’s strategic importance and long-term economic prospects.
✔ The country has a good telecommunications including national Wifi networks, 100% mobile coverage.
✔ There are two international airports (Larnaca and Pafos) with good connections and two multipurpose deep sea ports (Limassol and Larnaca).
✔ For many years, Cyprus has been an attractive base for international companies and HNW families due to the availability of qualified labour force, attractive tax regime, reliable transport connections and telecommunications.
✔ The country has a free-market, service-based economy, with effective and transparent regulatory and legal framework which offers investors confidence to invest and prosper.
✔ Strategically located at the crossroads of Europe, Asia and Africa, Cyprus has been an important centre of trade for thousands of years.
✔ Since joining the EU in 2004, and the Eurozone in 2008, Cyprus has transformed itself into an attractive business and logistics centre in the region, with easy market access to the EU and other markets.
✔ The 2013 banking crisis severely affected the economy and the financial sector, however with new stricter banking regulations and financial aid from the EU and IMF, the economy recovered quickly and there has been steady growth since then.
✔ Cyprus has a legal framework based on English Common Law which is business-friendly and reliable. As an EU member, it is also fully aligned with EU laws and regulations.
✔ The tax system is favourable with a corporate tax of 12.5% and an extensive network of Double Taxation Treaties (DTTs), which underpin the calibration of the overall tax system.
For many years, the fast-track Cyprus Permanent Residency programme (also known as the ‘Cyprus Golden Visa’) is highly valued by business executives and high net worth families because of the many benefits – financial and other.
In cooperation with legal advisers and immigration consultants, we offer this permanent residency by investment solution to non-EU citizens who are looking for an opportunity to invest modest amounts in real estate, local companies or approved investment funds and acquire the right to live in Cyprus and any other EU country indefinitely.
✔ Covers the Whole Family.
With one investment, application for permanent residency permits can be made for the main applicant, spouse, parents, parents-in-law, dependent children up to the age of 18 and dependent children enrolled in higher education institution up to the age of 25.
✔ Easy Application Requirements.
Unlike other countries, there is no need for medical reports, language requirements or obligation to live long periods in the country before or after the issue of the permanent residency permit.
✔ Easy Travel and Residence in EU countries.
Easy access across the EU zone and easier access to the Schengen zone, USA and Canada.
✔ Easy and Fast Application Processing.
Final approvals are usually granted within 3 – 6 months from the date of filing. The application can be processed in the applicant’s absence and filed on their behalf by our office.
✔ Possible Favourable Tax Status.
If the applicant resides in Cyprus for certain number of days during a year then he/she has the option to apply to become Cyprus ‘tax resident’ which has attractive tax benefits.
✔ Possible Lower University Tuition Fees.
Some schools and universities in the EU, offer free or lower tuition fees for Cyprus permanent residents.
✔ Possible Lower Medical Fees.
Some public hospitals in the EU, offer free or lower medical fees for Cyprus permanent residents.
✔Eligible To Apply For Citizenship By Naturalization
After 7 years of legal permanent residency, if the applicant has resided for full 5 years (1825 days) in Cyprus, then he is eligible to apply for citizenship by naturalization subject to certain conditions.
Cyprus Permanent Resident
> The applicant must provide evidence of annual income of at least EUR30,000 originating from abroad (plus EUR5,000 for each dependent and EUR8,000 for each parent or parent in law). The income should derive from sources as salary, rent, pension, interests, dividends, etc.
> The income should be derived from legally acceptable sources abroad. It should be secure and be able to provide long term support for the applicant and his family.
> The applicant must make an investment in one of the following ways:
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A. Purchase of one of more new house or apartment from a developer (first sale) with combined value of at least EUR300,000 (plus VAT if applicable).
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B. Purchase of real estate, other than houses and apartments, such as offices, shops, restaurants or combinations thereof, with total value of EUR300,000. In this category, resale properties are allowed.
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C. Investment of at least EUR300,000 in the share capital of a company or companies, registered in Cyprus, with physical activities in Cyprus and minimum five staff employed in Cyprus.
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D. Investment of at least EUR300,000 in a Cyprus registered Collective Investment entities, such as an Alternative Investment Funds (AIF, AIFLNP, RAIF).
> If the Applicant chooses to invest under criteria B, C, or D above, then he has to present proof of his place of residence in Cyprus. This can be a title deed, sales agreement or rental agreement.
> The EUR300,000 property investment can be one or two new properties from the same developer. One must be residential, while the second can be residential or commercial.
> The applicant’s presence at the time of purchase is not mandatory and can be facilitated by our office
> The purchase can be in the name of a legal entity legally established in the European Union in which the sole shareholder is the applicant and his/her spouse.
> If the Applicant chooses to invest under criteria A and B above, then as soon as he has paid €200.000 plus VAT to the developer or seller, he can submit the application.
> Applicants do not have right to work in Cyprus so they will be asked to sign an Affidavit that they are not going to engage in any professional activity in Cyprus. (Note that income from dividends in a Cyprus Company is not considered as a violation of this requirement).
> Clean police certificates from the country of residence for the applicant and adult dependents.
> The applicant and all dependents must not be on EU, UN or other international sanctions or restrictions.
> The applicant must visit Cyprus within one year of the date of issuance of the permanent residency permit to provide biometrics, and subsequently once every two years thereafter.
> There are no medical tests, no language requirements and no requirement to live long periods in the country before or after the issue of the permanent residency certificate.
CYPRUS CITIZENSHIP
> Interest in Cypriot citizenship has been growing from UK and non-EU citizens who are looking for safe country to live which offers a passport with visa-free travel to many countries. The popular Cyprus Investment Programme which allowed high net worth investors to acquire a Cyprus passport with about €2.5 million investment has been cancelled since 1st November 2020.
> Today there are three legal ways to acquire a Cyprus passport:
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By naturalization based on being legally resident in Cyprus
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By marriage to a Cypriot citizen
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By having Cypriot citizen ancestors
HOW TO ACQUIRE CYPRUS CITIZENSHIP
The interest in Cypriot citizenship has been growing from UK and non-EU citizens who are looking for safe country to live which offers a passport with visa-free travel to many countries. The popular Cyprus Investment Programme (launched in 2007), which allowed HNWI to acquire a Cyprus passport with about €2.5 million investment has been cancelled since 1st November 2020.
Today there are 3 legal ways to acquire a much desired Cyprus passport:
1. By naturalization based on the being legally resident in Cyprus
2. By marriage to a Cypriot citizen
3. By having Cypriot citizen ancestors
Citizenship by naturalization due to years of residence
Application for Cyprus citizenship can be submitted by foreigners who have completed a total of 7 years of legal residence in Cyprus before the application date. (note ‘legal residence’ means being physically present in Cyprus for 1825 days in the 7 year period) AND the applicant must have resided continuously in Cyprus in the last 12 months before the application date.
Citizenship by marriage
Foreign spouses of Cypriots who have completed 3 years of marriage and 2 years of physical residence in Cyprus before the date of the application are entitled to apply for citizenship. Also, spouses of Cypriots living abroad are entitled to apply when they have completed at least three years of marriage.
Citizenship due to the Cypriot origin
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Minors or adults born abroad after the 16th August 1960 and whose father at the time of birth was a Cypriot citizen, and by those born after the 11th June 1999, whose mother was a Cypriot citizen at the time of their birth.
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Minors born before the 11th June 1999 in Cyprus or abroad and whose mother is a Cypriot citizen and whose father is a foreigner or for minors whose father took Cypriot citizenship after their birth.
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Minors whose father or mother acquired Cypriot citizenship by naturalization or by marriage with a Cypriot citizen.
Disclaimer: The above regulations are correct at the time of writing and are subject to change without prior notice. Relikor recommends that readers seek proper legal advice before taking decisions about citizenship and other important personal matters.
CONTRACTS OF EMPLOYMENT
For all the employees, long term or short term contracts need to be signed and all the terms and conditions to be agreed between them and their employer. The contracts must include, among others, the position, salary, days of holiday and sick leave and termination conditions.
PROBATION PERIOD
The probationary period in Cyprus is dependent on the type of role and is stipulated within the employment agreement. The most common probation period is 6 months..
TERMINATION OF EMPLOYMENT
If an employee terminates employment, then the minimum period of notice he/she must give to the employer is as follows:
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Employed up to 51 weeks: 1 week notice
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Employed from 1 year to 5 years: 2 weeks notice
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Employed over 5 years: 3 weeks notice
The notice period for a temporary or permanent employee is dependent on the employee’s length of employment. The only time a notice is not required is when the employee has committed a serious offense. If an employer terminates employment of an employee, then the minimum period of notice the employer has to give the employee is as follows:
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Employed up to 26 weeks: No notice is required
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Employed 27 to 51 weeks: 1 week notice
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Employed 1 year to 2 years: 2 weeks notice
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Employed 2 years to 3 years: 4 weeks notice
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Employed 3 years to 4 years: 5 weeks notice
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Employed 4 years to 5 years: 6 weeks notice
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Employed 5 years to 6 years: 7 weeks notice
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Employed over 6 years: 8 weeks
SEVERANCE PAY
The severance pay varies based on length of employment:
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2.0 weeks’ severance for each year of employment up to 4 years
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2.5 weeks of wages for each year of employment between 5-10 years
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3.0 weeks of wages for each year of employment between 11-15 years
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3.5 weeks of wages for each year of employment between 16-20 years
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4.0 weeks of wages for each year of employment over 20 years
EMPLOYER OBLIGATIONS
All employers must provide to their employees their monthly pay-slip which indicates the monthly gross salary and corresponding deductions and contributions arriving to the employees net salary. Also they must prepare and submit the Employer’s Tax Return (IR7) to the tax authorities by the 31 of July of the following year. For instance for 2022 the IR7 has to be submitted by 31.07.2023.
At the end of each year all employers must prepare and provide to their staff an official form (IR63) stating the annually gross salary with all deductions and contributions for the year. Usually this form is provided to the employees in March- April of the next year. All forms, Pay-slips, IR7 & IR63 are completed by the accountant of the Company / Employer.
REGISTRATION OF EMPLOYERS AND EMPLOYEES
Every salaried person or self employed person must have a Personal Tax Identification Code (T.I.C) and a Personal Social Insurance Number (S.I.C). The registration of personnel is made though the Social Insurance Office and the Income Tax Office. The procedure is not complicated and it usually takes 10 working days to be registered with Social Insurance Office and the Income Tax Office. In the event
that the Company / Sole Trader is not registered as an employer, it should also register as an employer first and then register the employees under his/her name.
MINIMUM WAGE
According to Ministry of Labour and Social Insurance guidelines, for full time office employees, the minimum monthly wage at recruitment is EUR870. For employees who have completed a six month period of employment at the same employer, the minimum monthly wage is EUR924. Note that other rates apply for some professions.
NORMAL WORKING HOURS
The working week is Monday to Friday and the standard working hours are 40 hours across five days. In some sectors such as retail shops, a six-day week is possible. Employers must be granted written permission from employees in order to increase the employee’s working hours.
All work more than the standard working hours a week is to be paid as overtime and is regulated by the employment contract or collective bargaining agreements. The maximum number of hours during a workweek is 48 and is averaged over a 4-month period. All hours in excess of 40 hours a week are paid at an overtime compensation rate; this rate is stipulated in the employment contract or collective bargaining agreements.
PAID ANNUAL LEAVE
The paid annual leave entitlement is dependent on the number of years of employment. The standard leave entitlement for employees who work a five-day week is 20 days per year or 24 days per year for employees who work a six-day week. Further entitlement for leave is outlined in the employment contract or collective agreement. Employees become eligible after 48 weeks of employment with a single employer, and the employer reserves the right to accept or deny any leave requests due to the demands of the business.
PUBLIC HOLIDAYS
There are 14 public holidays. Most are religious feast days and national days.
SICK DAYS
Employees are entitled to paid sick leave from the fourth day of sickness and is paid by Social Security. The employee must submit a medical certificate to the Social Security Administration within 48 hours of the start of the sick leave.
MATERNITY LEAVE
Female employees are entitled to 18 weeks of maternity leave. The leave increased to 22 weeks for twins and 26 weeks for triplets. 11 weeks of maternity leave are compulsory and are generally taken as two weeks before the due date and the remainder after. To be entitled to maternity leave, the pregnant employee must provide a medical certificate certifying her pregnancy and the expected due date.
PATERNITY LEAVE
Fathers are entitled to 2 consecutive weeks of paid paternity leave within the 16 weeks following the birth of a child, paid by the Social Insurance Fund at 75.20% of the employees’ regular salary.
PARENTAL LEAVE
The right to parental leave covers all employees who have children under the age of 8. According to the law, every eligible employee can take up unpaid parental leave of up to eighteen weeks for each child.
OTHER LEAVE
Depending on collective bargaining agreements or the employment contract, an employee may be allowed additional leave types such as following:
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Bereavement: Employees are entitled to up to 5 days of paid leave due to a death of a direct family member.
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Adoption: Employees who want to adopt a child under the age of twelve years are entitled to up to 16 continuous weeks’ leave starting from the date they begin to take care of the adopted child.
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Military: Employees called to perform military service are covered by assimilated insurance.
SOCIAL INSURANCE & OTHER COSTS
Whether a self employed person or an employer, you must immediately inform the Social Insurance as soon as you hire a new employee. At present, Social insurance cost for the company is 14,9% on the gross salary of the employee, while the cost for the employee arises to 8,3% and any tax that need to be paid in case of taxable income over 19.500 euro which is the tax-free amount. The employer pays the 14,9% (8.3% plus other contributions 3,7% and GESY 2,9%) on the employee’s salary to the authorities and deducts the 8,3% from the employee’s salary.
SALARY DEDUCTIONS
Salaries must be paid net of the GESY contributions in the same way as social insurance contributions are deducted. The Social Insurance office has amended its forms and online portal for the GESY contributions so that both contributions are collected by the Social Insurance Office on a monthly basis. The Maximum obligatory amount for the Social Insurance Contributions is EUR54648 and it is different from the Maximum obligatory GESY contributions of EUR180000.
Employer Payroll Contributions
8.30% Social Insurance (Maximum annual contribution of EUR5808000)
2.00% Social Cohesion
1.20% Redundancy
0.50% Training and Development
2.90% National Health System (GESY)
8.00% Holiday Fund (if not exempt)
22.90% Total Employment Cost (vs 38% in Russia)
Employee Payroll Contributions
8.30% Social Insurance
2.65% National Health System (GESY)
10.95% Total Employee Cost (vs 31% in Germany)
EMPLOYEE OBLIGATIONS
All employees must register with the tax authorities and need to complete and submit their personal tax return (IR.1) stating their income from employment and any other income. The tax return is submitted electronically by the 31 of July the following year i.e. for 2022 it will be the 31.07.2023. In this form, a calculation of their tax is also included and any differences between the PAYE already paid and the actual tax need to be settled by 30 of June the following year i.e. for 2022 it will be the 30.06.2023. In the event that tax paid is higher than the actual tax due then the excess amount will be refunded by the authorities once the tax return is examined.
PAY AS YOU EARN (PAYE) INCOME TAX
Where the employee’s taxable income (i.e. Gross salary less Social Insurance paid) is over the threshold of EURO 19.500, then tax for the employee is as follows:
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Gross Income up to EUR19500: 0%
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Gross Income EUR19500 to EUR28000: 20%
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Gross Income EUR28000 to EUR36300: 25%
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Gross Income EUR36300 to EUR60000: 30%
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Gross Income over EUR60000: 35%
The employer must be informed the employee of all taxable income and personal circumstances by completing the form IR.59 at the beginning of each year. The HR department of the employer collects these forms and calculates the appropriate PAYE deductions based on the information provided on these forms. The amount of PAYE tax is calculated on the estimated income of the employee for the
year at the start of each year and is divided by 12 months. Bonuses and ‘benefits in kind’ (BIK) are also included as salaried income and taxed accordingly. Note that benefits in kind and bonuses are subject to Social Insurance Contributions, GESY and PAYE.
For many years, Cyprus has been an attractive destination for expats and their families.
With year-round sunshine, beautiful natural landscapes, relaxed lifestyle, friendly inhabitants, diverse culture and rich history, it has been a favourite retirement location for British and European expats for many decades. In the last 5-10 years, the country has been attracting more and more Asian investors and their families. For example, there is now a substantial number of Russian expats living and working in the Limassol district and Chinese expats living and working in Pafos district.
HEALTHCARE
High quality healthcare is provided through the Cyprus National Healthcare System (known as GESY) and private sector hospitals. State of the art medical services offer the highest quality in patient care, while the country has been ranked 21st out of 169 countries in the latest Bloomberg Healthiest Country Index.
EDUCATION
Cyprus is a world-class educational centre with high-quality academic institutions, offering a large variety of fully accredited study programs, attracting thousands of international students each year. The country has the highest number of ranked Higher Education institutions per capita in the EECA region (QS World University Rankings). Free education in Greek language is offered by government owned schools in which English and French are taught as second languages. Also in all major cities, there are multi-lingual and multi-cultural private schools which offer American, British, French, and Russian curriculums from pre-primary all the way to secondary education.
CHILDCARE
Cyprus is one of the safest countries in the world for raising your children. Cypriots are very friendly towards and most hotels and restaurants welcome families with small children. There are many kindergartens, both public and private and many are English or Russian speaking. Note the public kindergartens are government owned and operated and are Greek speaking only.
CYPRUS – LIFESTYLE, HISTORY, CULTURE, CITIES, BEACHES
LIFESTYLE
Compared to most West European countries, residents in Cyprus benefit from the safer environment, lower crime rates, lower cost of living, and competitive prices for residential properties and rentals. Cyprus is one of the five safest countries in the world and stands out as the safest country for the young people out of 184 countries according to the data published by the World Health Organization (WHO).
HISTORY & CULTURE
With a strategic location between Europe and the Middle East, Cyprus has been at the cross roads of civilizations and cultures for many centuries. Over the years, travelers, traders and invaders have left their mark. This has created a rich history and culture, lending influences from both Eastern and Western civilizations, from stone-age settlements over 10,000 years ago until today.
CITY & COUNTRY LIFE
Cyprus offers its residents the choice to enjoy a vibrant and dynamic lifestyle in multicultural cities or more peaceful and relaxing way of life in picturesque villages in the countryside.
BEAUTIFUL BEACHES & CRYSTAL CLEAR SEA
Cyprus has build a very successful tourism industry based on its sunny weather and beautiful and safe beaches. In fact, it has been awarded with 69 ‘Blue Flags’ for its beaches, by the EU, the highest per capita award in the EU. It has also been ranked highly for its crystal-clear sea waters and excellent water quality by the European Environment Agency.