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4 min read
Cyprus for eXtrepreneurs
Cyprus, the third largest island in the Mediterranean Sea, holds a strategic position at the crossroads of Europe, Africa, and the Middle East-Asia region. Its unique location has propelled Cyprus into playing a significant role in regional geopolitics and commerce, establishing itself as a strategic business hub. The annual Reflect Festival, held in Limassol, stands as a testament to Cyprus's commitment to nurturing startups, bringing together industry leaders, innovators, and entrepreneurs from around the globe.
The island has carved a niche for itself as a fintech hub, with burgeoning sectors in RegTech, IoT, cybersecurity, and gaming. Over the past decade, there has been a steady increase in available capital to fund startups, with record-breaking years such as 2021, where €85.5M was raised. Although 2022 saw a return to pre-pandemic levels, Cyprus-based startups continue to thrive, raising €17M so far this year.
With its startup ecosystem currently ranked 19th in Western Europe and 54th globally, Cyprus is poised for further growth, particularly in key sectors such as shipping, energy, banking and finance, and tourism.
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Cyprus Startup Ecosystem
Cyprus is known as a major strategic business center in the EU with easy connectivity to the Middle East, Asia, Europe and Africa. It is ranked 28th among the 132 economies featured in the Global Innovation Index 2023.
The Cyprus Startup Visa program extends support to talented entrepreneurs from non-EU/EEA countries, enabling them to establish startups with significant growth potential on the island. Noteworthy efforts to foster entrepreneurship and encourage foreign investment include programs like Invest Cyprus and ARIS, jointly funded by the Bank of Cyprus and Deloitte. Additionally, CYENS, a collaborative research and innovation center involving the Municipality of Nicosia, local universities, and international partners like University College London and the Max Planck Institute for Informatics, play a pivotal role in facilitating knowledge and technology transfer within Cyprus.
With over 1000 registered companies as of September 2023, Cyprus is emerging as a competitive market place for international business entities. Sectors such as Tourism, Health & Wellness as well as the Gaming industry, Sports, Luxury and Lifestyle are emerging as top choices for eXtrepreneurs to invest in.
Cyprus Company Formation
While for many founders, the primary goal of company incorporation is doing business in the chosen country, some eXtrepreneurs* look at a wider ambit of opportunities. With tax incentives provided by the government including programs like Invest Cyprus and the Startup Visa, the Startup Visa program, along with funding programs for foreign entrepreneurs, Cyprus is opted by many of such eXtrepreneurs to expand in the EU.
But the decision of choosing the right legal entity to setup one’s business in a foreign nation is extremely crucial. Depending on a various factors such as tax treatment, ease of formation, ease of compliances, ability to raise capital, to name a few.
Cyprus offers diverse company structures catering to various business needs, making it an attractive destination for eXtrepreneurs. Whether you're planning to operate locally or internationally, understanding the types of Business Entities in Cyprus is crucial.
As non-EU eXtrepreneurs generally target multiple EU countries, it is vital to factor in the ease of doing business and tax benefits along with the business goals.
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5 min read
Overview
Cyprus is strategically located with easy connectivity to the Middle East, Asia, Europe and Africa, making it an ideal base of business operations to expand an eXtrepreneur’s presence globally. It offers a friendly and flexible business ecosystem for startups to grow and harnesses sustainability. Over the decades it has grown to become an international investment platform, coupled with an attractive corporate and individual tax planning structure, and a general policy of non-intervention by the government in business activities, among many other factors. To increase foreign investment and attract eXtrepreneurs, along with job creation, promotion of innovation and research and overall development of its economy, Cyprus adopted the Startup Visa program for Third Country Nationals in February 2017 to increase business set ups for foreign entrepreneurs. This program is a part of the Policy Statement on Strengthening the Entrepreneurial Ecosystem, aiming to grant 150 visas to Startups belonging to Non EU countries. This program is currently valid from June 1, 2022 until May 31, 2024 with a cap of up to 150 visas under the scheme.
Highlights
1
Eligible for up to 5 founders (consisting non-EU nationals) per application- In case of Team Scheme;
2
Right to economic activity and temporary residence for two years, with option of renewal for an additional period of one year;
3
Can lead to Long Term Residence if the startup succeeds;
4
Entitlement to family reunification
5
Can hire foreign personnel conditional on employee ratio to be 70:30 for foreign and local respectively
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50% tax exemption to investors on fulfillment of certain conditions
7
Become eligible to receive “Certificate of Innovative Company”
Eligibility
A
For Individual Startup Visa Scheme
- Must be a Non-EU/EEA founder;
- Must have an innovative startup with a supportive detailed business plan;
- R&D expenses should not be more than 10% of operating cost;
- Availability of €20,000 as investment funds;
- Must have good knowledge of English and/or Greek;
- Must have an undergraduate degree or similar educational qualification
B
For Team Startup Visa Scheme
- Maximum five (5) non-EU/EEA founders or at least one founder and up to five individuals (senior managers who have access to stock options)
- Must have an innovative startup with a supportive detailed business plan and other details of the company;
- Must hold 50% in the share capital of the company cumulatively;
- R&D expenses should not be more than 10% of operating cost;
- Availability of €20,000 as investment funds;
- All eXtrepreneurs must have good knowledge of English and/or Greek;
- All eXtrepreneurs must have an undergraduate degree or similar educational qualification
Renewal
- In addition to a 2 year visa permit, the Cyprus government provides renewal of visa on temporary basis for an additional year if the business is successful.
- To qualify as a successful business must fulfill one of the following criteria:
- Company has proved to be viable and is scaling up– Submission of company’s previous year’s audited Financial Statements that should show an increase of minimum 15% growth over the two-year period.
- Company’s contribution to the Scheme’s main aim, i.e. the creation of new jobs, the promotion of innovation and research, and the development of the local business ecosystem.
- If the company is deemed as successful, applicants would have the prospect of long-term residence in the Republic.
Permanent Status
Process and Timelines
Overview
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Renewal
Permanent Status
Process and Timelines
Overview
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Eligibility
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Renewal
Permanent Status
Process and Timelines
DG Country Comparison ToolTM
CompareQuick peek at the top countries for eXtrepreneurs.
This tool compares the top nations inviting eXtrepreneurs on over 40 vital parameters to provide a holistic view and a comprehensive perspective of the Entrepreneur mobility options, the start up ecosystem and the policy benefits, to be availed.