Cyprus

Cyprus Permanent Residence Permit

A Permanent Residence Permit is very useful as a means to ease travel to EU countries and as a gateway through which to organise business activities in Europe.

Benefits of the programme include:

• The procedure generally takes two months from the date of the application.
• The applicant’s passport is stamped and a certificate provided that indicates that Cyprus is a permanent place of residence for that individual.
• Simplified process for acquisition of a Schengen Visa for holders of a permanent residence permit.
• Ability to organise business activities in the EU, from Cyprus.
• If the applicant becomes tax resident in Cyprus (i.e. they satisfy either the “183 day rule” or the “60 day rule” in any one calendar year) he/she will be taxed on Cyprus income and income from foreign sources. However, foreign tax paid can be credited against the personal income tax liability in Cyprus.
• There are NO wealth and/or NO inheritance taxes in Cyprus.
• There is no language test.

Cyprus Permanent Residence Permit

The applicant, and his/her spouse, must prove that they have at their disposal a secure annual income of at least €50,000 (an increase of €15,000 for the spouse and €10,000 for every minor child). This income can come from; wages for work, pensions, stock dividends, interest on deposits, or rent. Income verification must be the individual’s relevant tax return declaration, from the country in which he/she declares tax residence. In the situation where the applicant wishes to invest as per investment option A (detailed below), the income of the spouse of the applicant may also be taken into consideration.

In calculating the applicant’s total income where he or she chooses to invest as per the options B, C or D below, his/her total income or part of it may also arise from sources originating from activities within the Republic of Cyprus, provided that it is taxable in the Republic of Cyprus. In such cases, the income of the spouse of the applicant may also be taken into consideration.

In order to qualify, an individual must make an investment of at least €300,000, in one of the following investment categories:

A. Purchase residential real estate (house/apartment) from a Development company in Cyprus with a total value of €300,000 (excluding VAT). The purchase must concern a first sale.
B. Investment in real estate (excluding houses/apartments): Purchase other types of real estate, such as offices, shops, hotels, or related estate developments of a combination of these, with a total value of €300,000 (excluding VAT). Re-sale properties are acceptable.
C. Investment of at least €300,000 in the share capital of a Cyprus company, which is based, and operates in Cyprus, has substance in Cyprus, and employs at least 5 people in Cyprus.
D. Investment of at least €300,000 in units of a Cyprus Investment Organisation of Collective Investments (type AIF, AIFLNP, RAIF).

Cyprus Permanent Residence Permit

The applicant and his spouse must submit evidence that they have a clean criminal record from their country of residence and country of origin (if this is different).

The applicant and their spouse will certify that they do not intend to be employed in the Republic of Cyprus, with the exception of their employment as Directors in a Company in which they have chosen to invest within the framework of this residence permit.

In cases where the investment does not concern a Company’s share capital, the applicant and/or their spouse may be shareholders in Companies registered in Cyprus and the income from dividends in such companies shall not be considered as an obstacle for the purposes of obtaining the Immigration Permit. They may also hold the position of Director in such companies without pay.

The applicant and the family members included in the Permanent Residence Permit must visit Cyprus within one year of the permit being granted and from then on at least once every two years (one day is regarded as a visit).

Capital gains tax is imposed at the rate of 20% on gains from the disposal of immovable property situated in Cyprus, including gains from the disposal of shares in companies which own immovable property, excluding shares listed on a recognised Stock Exchange. Capital gains tax is imposed even if the owner of the property is not a Cyprus tax resident.

Foreign Interest Company

Available to Non-EU Passport Holders that are eligible to be employed by such companies.

In addition to the ordinary benefits available to Cyprus companies there are also specific benefits available to FICs and their directors:

• Residency and work permits.
• Personal income tax exemptions available to tax resident non-domiciled individuals. Individuals may be entitled to a 50% salary exemption as well as an exemption from personal income tax on dividends, interest and capital gains.
• Corporate tax efficiencies: Cyprus has one of the lowest corporate tax rates in the EU at 12.5%. Which with the Notional Interest Deduction (NID) available in Cyprus this corporation tax could be as low as 2.5%. There is also an exemption on dividend income from corporation tax and dividend distributions to shareholders are not subject to withholding tax.

Foreign Interest Company

In order to be eligible businesses must have economic substance in Cyprus and meet one of the following criteria.

The most common criteria that are met are:

1.  The majority of the company’s shares are owed by third-country nationals.
2. If this is not the case, then the company is eligible if the foreign participation has a value of at least €200.000.

In both the above cases (1 & 2), the ultimate beneficial owner (UBO) must deposit an amount of at least €200,000 in an account held by the company in a credit institution licensed by the Central Bank of Cyprus.

Alternatively, the company can submit evidence of an investment amounting to €200,000, for the purposes of operating its business in Cyprus (e.g. purchase of office, equipment etc.).

If there is more than one UBO, then the amount of €200,000 can be deposited or invested either by a single UBO or collectively.

Foreign Interest Company

Other less common criteria that are available are:

• Public companies registered on any recognised stock exchange
• Former “Off-shore” companies, which operated before the change of regime and whose data is already held by the Central Bank of Cyprus.
•  Cypriot shipping companies.
• Cypriot high-tech/innovation companies.
• An enterprise qualifies as ‘High Technology Company’ if:
• it is already established and has a presence in the market, and
• it has a high level or experimental R&D intensity, and
• it developed product/s that fall into one of the following categories: products related to aviation and space industry, computers, information and telecommunication technology (ICT), pharmaceuticals, biomedical, research and development equipment, electrical machinery, chemicals, non-electrical machinery.
•   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.
• Cypriot Private Institutes of Tertiary (Higher) Education licensed by the Ministry of Education, Sport and Youth.

For cases 3 to 9, the investment criteria are also applicable. The company must make an initial investment in the Republic of at least €200,000. This must be proven by presenting the appropriate evidence, such as bank statements or proof of investment.