IT-Cyprus. What is the situation with the IT sector on the island?
The Republic of Cyprus is actively developing in the digital direction. Over the past few years, the country's authorities have been paying special attention to the development of Cyprus as one of the European centers of IT business.
In 2019, Cypriot officials announced their intention to double spending on developing the technology sector as part of the National Research and Innovation Strategy. In January 2020, the National Development Strategy in artificial intelligence was approved, which provides support for technology in the academic, public, and private sectors. In March of the same year, the Sub-ministry of Research, Innovation, and Digital Policy began its work.
In addition, Cyprus is launching a number of initiatives to support and develop innovative startups on the island. One of them is the "startup visa." We will talk about it in more detail below in the article.
Island has a rapidly growing local IT community. Since 2018, the IT CYPRUS FORUM has been held on the island, attracting more than 300 participants from various areas of the technology business annually.
IT ecosystem of the island
Almost all forex companies from Europe and the former CIS, online casinos, payment systems, and many others are represented on the island. Cyprus has also chosen NCR, Amdocs, 3CX, AVG, and Viber as their main base. The island has hosted representative offices of the world's giants for several years - Microsoft, SAP, Oracle, and IBM. Of the companies that emerged from the countries of the former CIS, ABBYY and Wargaming are present here. In recent years, the number of fintech and regtech companies has also been actively growing.
At the same time, the infrastructure for attracting financing is also developing. Last year, the government provided €20 million for the SME Equity Fund. There are several accelerators in operation, such as the Cyprus Business Angels Network (CYBAN) or the Cypriot Enterprise Link.
In 2018, the CYENS Center of Excellence (former RISE) research center began its activities. The Center is regularly supported by the Republic of Cyprus and the municipality of Nicosia, the European Commission, and the Institute of Informatics. Max Planck Institute (MPI), University College London, University of Cyprus, Cyprus University of Technology, and Cyprus Open University.
IT immigration and employment
Every year the island becomes more and more attractive for IT specialists from the countries of the former CIS. This is due to the wide choice of companies, taxes, and career development opportunities.
The easiest way to obtain a work permit and a residence permit is to become an employee of a company with foreign investments located on the island. Such companies imply the presence of at least 50% of the authorized capital, which belongs to a foreign beneficiary.
Another option is that the amount of direct investment by a foreign parent company or individual should be 171,000 euros or more. Companies with foreign investment easily process work and residence permits for employees in the positions of manager, middle manager, and key technical/administrative personnel. In this case, IT immigration does not provide for restrictions on the terms of work permits and residence permits. The employer draws up the employment contract, and the documents can be extended in accordance with the dates of the work contracts.
By the way, in this way, you can easily move to the island with your family. Employees of companies with foreign participation can apply for reunification to obtain a residence permit for a spouse and minor children. But in this case, only the company's employee has a work permit. Family members are only allowed to live in Cyprus without the possibility of official employment.
Today, dozens of IT companies with foreign investments are registered on the island. Their main activity is the development of games, applications, and software.
The minimum salary of a foreign specialist (non-EU resident) must be at least 2,000 euros. Additionally, most companies provide a package of bonuses and benefits for employees, such as subsidies for rental housing and the provision of a car for personal use. These bonuses are negotiated with each company separately at the time of signing the work contract.
The attractiveness of Cyprus for IT taxes
1. The tax burden for IT companies in Cyprus is quite comfortable.
● corporate tax - 12.5% (one of the lowest rates in Europe). But it can also be reduced to 2.5% if the research and development of the patent was carried out in Cyprus;
● no tax on dividends;
● exemption from income tax;
● no tax on capital gains;
● a wide network of double tax treaties and the application of the EU directive.
It is also important to consider the peculiarity of calculating personal income tax - income exceeding 19,500 euros is subject to a 20% tax.
2. Legislative system
English law is practiced on the island. Its tools allow IT companies to conveniently and securely transfer intellectual property rights, structure incorporation transactions, and more.
3. Banks and fintech services
Although the European banking sector has recently slightly tightened its requirements for new clients and introduced stricter financial control over cash transactions, foreign companies continue their activities without significant problems.
Also, many fintech companies have appeared in Cyprus, which can ensure the processing of payments no less efficiently.
4. Startup visas
New companies can obtain a “startup visa,” which allows them to live and work in Cyprus for at least two years. The program is designed for companies with one owner and a team of up to five people - all third-country nationals with specialized education and good command of English or Greek.
Such a company must devote at least 10% of its operating expenses to research and development for at least one in the past three years.
Also, such a company must have access to at least 20,000 euros in seed funding. Its sources may include venture capital, crowdfunding, and more.
A prerequisite for obtaining a “startup visa” is the location of the main office on the island and the presence of Cypriot tax residency. The Sub-Ministry of Research, Innovation, and Digital Policy consider the application for obtaining the status. If approved, the corresponding certificate is valid for three years.
The startup has two years to develop. In the event of a successful launch of the project, the period of work for employees and residence for members of their families can be extended indefinitely.
The procedure for obtaining a “startup visa”:
● Applying by e-mail. A business plan and documents confirming financing of at least 20,000 euros must be attached to the letter. The application is considered within a week. The applicant will receive a provisional work permit for two years if approved.
What else do IT immigrants need to know about Cyprus?
On the island, there is a comfortable working atmosphere in literally every company. Even those technical specialists who in their native country had a higher salary prefer to move here.
There are no unhappy faces on the streets and in offices and much less stress. As a result, we get a stable good emotional state, even after a hard day at work.
The nuances of work and life on the island
● Previously, it was common practice to enter the island on a tourist visa with further employment and work visa processing on the spot. This is not a very good option since the service may simply not have time to issue a work visa before the end of the tourist visa, and you will have to leave the island.
● Issuing a work visa on the island is the responsibility of the employer.
● Getting a work visa is an easy process. You only need to provide the employer with a passport, diploma, and certificate of no criminal record. You also need to undergo a medical examination, be photographed for documents, and be fingerprinted at the Cyprus Migration Service.
● Visa is issued within 2-4 weeks. After completing your documents, you can apply for the entry of family members.
Job Search in Cyprus
IT immigration involves looking for a company. If you suddenly want to move but do not yet have an offer from a local company, you can use various job sites.
All of these sites are typical job search engines on the island. There is no significant difference between them. You can find portals yourself using the search engine. In any case, the consideration of candidates and further employment depends on the level of your qualifications and suitable skills for a particular vacancy. Most offers with high salaries and attractive bonuses often come from headhunters. In order to be in their field of vision, we recommend actively developing your LinkedIn page and making friends with a couple of specialists in order to be known in your profession.
FORLIFY is also deeply involved in the tech market, so we can always help our members get involved in the IT life of the island. We're helping companies to obtain IP box and provide them with all tax information, accountants, and lawyers if needed. Join our family!