Cyprus is known for offering an innovative, diverse and business-friendly environment for investors which in turn has created an emerging startup ecosystem. This is achieved through the provision of various tax incentives for investment and innovation, the availability of a start-up visa and a number of funding opportunities. This article shall examine some of these core benefits offered to startups registered in Cyprus.
The startup visa is an immigration program offered to entrepreneurs coming from outside the EU and the EEA, permitting them to enter, reside and work in Cyprus in order to establish and operate a startup with a high growth potential.
A startup group applying for this specific visa may consist of up to five founders (or one founder and additional executive members), the majority of which are third country nationals, and must have a minimum of €20.000 capital or €10.000 if the founders are less than two. Successful applicants will enjoy the right to economic activity and residence in Cyprus for one year (plus possibility of renewal for another year), and prospective residence in Cyprus for the founders/ executives and their families without any maximum time restrictions, if the company succeeds.
Cypriot companies in which third country nationals own greater than 50% of the share capital with a capital equal or greater than €200.000, can also register as foreign interest companies with the migration department, and thus employ a greater number of third country nationals through a fast-track immigration process.
With an extensive double tax treaty network of approximately 70 countries across the globe, Cyprus offers a number of tax benefits to startups and foreign investors of such startups, including the following:
The regulatory structure in Cyprus offers a strong protection to investors as well as tax benefits to those investing in enterprises producing intellectual property, thus rendering a Cypriot startup as an attractive vehicle which independent investors may fund.
As Cyprus is a fully-fledged EU member state, Cypriot enterprises also have access to EU funding instruments, such as the Horizon 2020 SME Instrument, as well as structural funds implemented through national development plans.
Other than the tax benefits offered to Cypriot companies producing and profiting from intellectual property, such assets owned by Cypriot companies can be protected and registered from Cyprus into the national registers, EU as well as international registers.
Low business costs
The costs involved with setting up and operating a Cypriot startup are significantly lower than those in other major European countries. These costs include the average hourly rates for labour, costs for technical and professional talents, office rental rates and critical business support services, such as legal and accounting services.
Our Firm’s dedicated team includes specialists on the full spectrum of the law, which can offer support, guidance and advice either during the establishment of the startup or throughout its development and operation. Our team members have extensive experience on matters relating to, amongst others, intellectual property protection, the incorporation and administration of Cypriot companies, tax benefits and structures, preparation and negotiation of all necessary funding, shareholders or joint venture agreements and many more.
The content of this article is valid as at the date of its first publication. It is intended to provide a general guide to the subject matter and does not constitute legal advice. For any further information or advice please contact Lorena Charalambous, Partner at +357 25 363685 or by email at Lorena.firstname.lastname@example.org .