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Special kind of Cypriot companies
Cyprus companies with foreign capital
(foreign interest Cyprus company)
In August 2014, new provisions of the Cyprus Aliens and Immigration Law (Cap. 105) came into force in Cyprus, which allow and legalize, subject to certain conditions, the work of foreign citizens in Cyprus in international companies (private or public) with foreign investments Thus, in Cyprus, by virtue of the law, a new category of companies has appeared - COMPANIES WITH FOREIGN INTERESTS (capital).
Taking into account the entry into force of these provisions of the Law, since September 2014, the Cyprus Migration Department began to issue work permits to those companies and foreign citizens who have already worked in Cyprus, and to those who are only going to work using such companies. At the same time, companies that want to employ foreign citizens and obtain such a status must comply with a number of requirements of this Law.
What are the requirements for such Cypriot companies and what conditions must they fulfill in order to obtain such a status?
The main requirements for obtaining the status -
Company with foreign interest (capital)
All Cypriot companies that want to employ foreign citizens (in the staff of the company) andto obtain the aforementioned status, must fulfill the following mandatory requirements:
1. First requirement: Majority of shareholders(i.e. share over 50%)in the capital of such a company must be foreign shareholders (individuals or legal entities), and in the case when the shareholders of the shareholders of the Cyprus company is a foreign legal entity (company, corporation, fund, etc.), then in this case, the Migration Department must be all documents on such company (s) are provided, and all beneficiaries of such foreign company (ultimate beneficial owners) are disclosed. Documents for such foreign companies (legal entities) must be properly certified and legalized (with translation into Greek).
Exceptions are the following cases:
- Public foreign companies whose shares are listed on any well-known Stock Exchange or Securities Exchange.
- International companies (former International Business Companies) whose data are held by the Central Bank of Cyprus and which operated in Cyprus before the offshore regime was lifted in Cyprus.
In the event that inin the capital of such a company, foreign shareholders own a share of shares equal to = 50%, or less than 50% of the shares of the totalthe number of shares in the authorized capital of the company,then the requirement must be fulfilledthat such shares (block of shares) must represent an amount in the capital of the company equal to or greater,than €200,000 Euro,so that the company can obtain the status of a company with foreign interest (capital).
2. Second requirement:For new Cypriot companies (registered or applying for the first time), evidence from the bank must be provided to the Department that the paid-in foreign capital share in such a company is an amountequal to or higher than €200,000 Euro,and that these funds were credited to the company's accounts officially and legally in accordance with the laws of Cyprus from abroad. In this case, the first requirement indicated above must be observed.
3. The third requirement for obtaining status- such companies must operate from their own, separate, stand-alone office premises, which must not be (cannot be) part of any private residence or other office. The exception is when the office is located in an office business center and there is a lease agreement for such an office. All cases where the nature of the work allows an employee to work remotely from home (apartment) will be considered separately for each company.
4. The fourth requirement- such a company must provide a number of supporting and certified documents, including for the company itself. The list of documents is given below.
Regarding certification of documents for foreign citizens,duly certified documents for a citizen must be provided. The term “properly” means that each document must be legalized with an Apostille (Apostille stamp in accordance with the Hague Convention of 1961), or have assurances in the Ministry of Foreign Affairs in the country of origin of the citizen, as well as in the Consulate of the Republic of Cyprus in this country. It is necessary and important to note that for citizens of Russia and the Republic of Serbia, no certification of documents is required. For Chinese citizens, certification is required only from the Ministry of Justice of China.
Companies that have fulfilled the above requirements may hire foreign nationals as employees of the company and undertake the obligation to hire them for the positions (positions) below, but must first obtain -3194-bb3b-136bad5cf58d_ and Temporary residence permit for each of these citizens. In case of violation of these requirements, the Migration Department will deprive the company of the status of a Company with a foreign interest.
The following categories of employees may be employed by the Company with foreign interest and subject to the following conditions:
-
Executive Directors.
The term "Executive Director" includes citizens of foreign countries registered by the company as:
- Consulting Director or Partner (must be registered with the Registrar of Companies of Cyprus).
- General manager of branches or subsidiaries of foreign companies.
- Company department managers.
The maximum number of such managers allowed in the companyno more than 5 (five),unless the company submits a petition to the Migration Department for the required number of such leaders, managers for the company.
Minimum agreed wage for newly appointed Executive director rmust amount to at least €4,000 Eur (or higher) Euro per month. This amount may be adjusted by the Department from time to time (minimum) depending on fluctuations in the salary index.
No restrictions for those employees in the company are not set out by the law.
2. Middle managers, executive staff, and any other key positions (positions) in the company.
The above staff includes directors who are not Executive Directors or Consulting Directors of either the above1 , as well as other mid-level Executive employees in the company, as well as other managerial, administrative or technical positions with a monthly salary from €2,000 and €4,000 Euro.This salary range may be adjusted from time to time depending on fluctuations in the salary index.
The maximum number of such employees in the company shall not exceed ten (10).
At the same time, the Migration Department has the right to adjust this number upwards (more than 10) in each individual case when the company makes such a request. In any case, the company must justify the need to hire foreign employees in the amount of more than 10, taking into account providing evidence of the availability of financial means to pay salaries to such employees (more than 10). as well as provide information on the types of activities of the company, the share of foreign employees in the company and the share of employees - citizens of Cyprus, as well as the duration of the company's existence.
No restrictions on the period of stay of these employees in the state of the company are established by law.
Specialists : a company may hire specialists from third countries, the minimum salary of such specialists should not be less than €2,000 Euro per month.
4. Support staff of the company.
All citizens of foreign countries who do not fall into the above two categories of employees (employees) of the company who can be employed in professional, technical, administrative, managerial work in companies fall under the category - the rest of the support staff. For such categories of workers, it is expected that companies will hire to work citizens of Cyprus or EU countries. In the event that the company could not find employees from the citizens of Cyprus or the European Union for the relevant positions in the company, then such a company must apply for a work permit for foreign citizens to the Department of Labor of Cyprus, go through the appropriate procedure there, provide the necessary documents, and after obtaining a positive decision from the Cyprus Department of Labor, such a company will have the right to hire foreign citizens in the positions of support staff.
In the event that the foreign capital applied for the status is less than the required amount of €171,000 Euros, and the main activity of such a company is the provision of consulting services, such an application may be considered, and the Department will consider on a case-by-case basis the need for additional investment.
The above information is only a useful information and not a consultation or a legal advice.