Employment To Companies Of Foreign Interests
According to the current policy, the Department of Labour examines applications employers for the employment of foreigners, provided that the criteria and procedures agreed between the social partners are met.
The major categories of companies for which applications are examined, are the following:
The applications for employment of foreigners by local enterprises are submitted to the District Labour Offices, which are entitled to ascertain that the following criteria are met:
a. Non-availability of suitably qualified local personnel (Cypriot or European citizens); in order to satisfy the specific needs of the employers.
b. Saving and better utilization of the local labour force.
c. Improvement of working conditions at the workplace.
d. Terms and conditions of employment of foreigners should be the same as those for Cypriots
B. Local companies with foreign investment Employment by Companies of Foreign Interest
In general a Cyprus company must give priority in employment recruitment to Cypriots and EU nationals before resorting to employ a Third Country National (TCN). However, Cyprus has provided an exception in the law for companies of foreign interests (such as forex companies) to employ TCN subject to certain requirements. This form is especially useful for a TCN who may incorporate his own company, or in conjunction with others with a minimum investment of EUR 171.000 (does not have to be the share capital of the company), and be employed by this company in accordance with the employee classifications mentioned below.
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In order for companies of foreign interest, including former offshore companies and Cyprus shipping companies, to employ third country nationals in Cyprus, the following must apply:
- Their third country shareholders should own the majority of the company’s shares. The following cases are excluded:
- Public companies registered in any recognized stock exchange
- Former offshore companies that were operating in Cyprus by approval of the Cyprus Central Bank, before the change of the offshore status.
If the percentage of foreign participation in the company’s share capital is equal to or less than 50% of the total share capital, in order for the company to be considered as suitable, the foreign participation should represent an amount equal to or greater than the amount of € 171.000.
- In the case where companies are the shareholders, their final owners (natural persons who are the ultimate beneficial owners) should be declared, in order to receive the approval of the Civil Registry and Migration Department.
- A foreign direct investment of capital amounting to at least € 171.000, legally admitted to Cyprus from abroad. This should be proved by appropriate bank and other documents. This requirement only applies to companies which will employ staff from third countries for the first time.
- To operate in independent offices in Cyprus, housed in suitable premises, separate from any private housing or other office, except in the case of business co-habitation.
As a result a TCN can also benefit from the relatively low income tax level for individuals as well as low corporation tax levels of the Cyprus tax regime.
Companies that meet the above conditions are entitled to employ third country nationals in the following categories, provided that they first obtain temporary residence and employment permits.
1. Executive Directors
The term ‘Executive Directors’ includes TCN registered as:
- Consulting Directors or Partners
- General Managers of branches and subsidiary foreign companies
- Departmental Managers
– The maximum number of such executives is 5 unless otherwise justified.
– The annual salary of an appointed Executive Director is €3.872/month. This amount may be adjusted from time to time according to fluctuations in the salary index.
– There are no restrictions for the residence period of these employees.
2. Middle-management staff, executive staff and any other key personnel
This category includes Directors who are not considered to be Executive Directors as well as other Executive/Middle-management staff or other managerial, clerical or technical personnel.
- The annual salary of the above positions range from €1936 – €3871 per month The amounts may be adjusted from time to time according to fluctuations in the salary index.
- The maximum number of these employees permitted in this category is 10 unless otherwise justified.
- There are no restrictions for the residence period of these employees.
3. Supporting Staff
TCNs employed in other professional, managerial, technical, clerical etc. positions and do not fall under the abovementioned categories are classified in the remaining supporting staff.
Companies are expected to employ Cypriots or European citizens for this category. In case there are no available or suitable Cypriots or European citizens with the required qualifications, a company may employ third country nationals in positions of this category, following the procedure and submitting all the certificates/supporting documents described here, after an affirmative decision (stamp of contact) is ensured by the Labour Department.
There is no maximum number for the employment of third country nationals under this category, provided that the necessary approvals from the Department of Labour have been obtained. No approval from the Department of Labour is needed for third county nationals who enjoy free access to the labour marker.
For employing a greater number of third country personnel under the above categories, duly justified and documented requests by the company must be submitted to the Department. The requests must include information on the salary offered as well as:
- The company’s turnover
- The ratio of third country employees to Cypriots / EU Nationals and
- The company’s operating time in Cyprus.
Entering the Republic
Third country nationals can enter the Republic for the purpose of employment at company of foreign interests either by obtaining:
an entry permit from the Civil Registry and Migration Department (see steps above for application submission), or
- a visa from the Consular Authorities of the Republic abroad. Find the Consular Authorities of the Republic abroad click here.
Actions After Arrival
Within seven (7) days after the arrival of the third-country national in Cyprus, he/ she must apply to the Civil Registry and Migration Department, to register in the Aliens’ Register, according to the Aliens and Immigration Regulations as amended to date.
Moreover, he/ she must, within the aforementioned period, apply to the Department for a temporary residence and employment permit, according to the legislation in force. The residence permit is issued in a card form.
Validity of Temporary Residence and Employment Permit
Where the conditions foreseen in the law are met, the third country national is granted a temporary residence and employment permit. The validity of the permit depends on the duration of the employment contract and can be up to two (2) years, with a right of renewal. Directors, Middle management executives and other key personnel may reside in the Republic without a time limit, provided they hold a valid temporary residence and employment permit.
For support staff, the restrictions applicable to the general employment of third country nationals in the Republic apply.
Change of Employer
Employees at a company of foreign interests can change employer and work in a different company of foreign interests, regardless of their duration of stay in Cyprus, provided that:
- they have found employment within one (1) month from the termination of their previous employment,
- the general conditions laid down by the legislation in force, regarding employment of third country nationals, are met.
- the company of foreign interests that will employ them is a beneficiary company, based on the criteria set out by the Council of Ministers (see above).
Employees that wish to change employer and work for an employer who is not a company of foreign interests are allowed to do so, provided that maximum stay in the Republic for purposes of general employment has not been reached [four (4) years in principle].