The Cypriot government on Tuesday approved a bill with tax incentives aiming to attract talent and promote headquartering in Cyprus, in line with the Strategy for Attracting Businesses for Activities and/or Expansion of their Activities in Cyprus approved by the Council of Ministers in October 2021.
Furthermore, in statements following a Cabinet meeting, Finance Minister Constantinos Petrides said that the Ministry of Interior is expected to table a bill granting visas and work permits to spouses of professionals that opt to relocate to Cyprus, as well as the operation of a One-Stop-Shop.
Petrides said the employees and businesses opting to relocate to Cyprus due to the incentives will bring direct and indirect benefits to the Cypriot economy.
“We are convinced that this program is one of the most competitive in the EU and already there is huge interest, particularly from high tech companies which in recent years have selected Cyprus as the place to relocate their headquarters,” Petrides said, adding “we are certain that this bill will further boost the development of this sector which constitutes a strategic aim for the government.”
The bill provides for the reduction of the minimum required salary from €100,000 to €55,000 per annum (p.a).
For existing employees, the bill provides for a 50% tax break on remuneration from employment earning €55,000 p.a exercised in Cyprus by an individual already in Cyprus, provided that prior to the commencement of his employment in Cyprus he was abroad for 12 consecutive years.
The bill also provides a grace period of six months for obtaining the benefit, while the exemption will continue to apply for 17 years from the commencement of employment.
For new employees, the bill provides a 50% tax deduction on remuneration exercised in Cyprus by an individual who was abroad for 12 consecutive years, while eligible persons should earn €55,000 p.a. For new employees the grace period amounts to two years for obtaining the benefit. The exemption will also be provided for 17 years from the commencement of employment.
Petrides said the employees and businesses opting to relocate to Cyprus due to the incentives will bring direct and indirect benefits to the Cypriot economy, while businesses are encouraged to relocate their administration to the Republic bringing “real infrastructure to the island.”
“Through this relocation, the tax base and consequently the tax income is broadened,” he said.