Employment with foreign companies in Cyprus

Following changes to employment legislation, a new procedure has been established for the employment of third-country nationals by foreign companies.

All companies whose shareholders are foreign nationals, including international companies (formerly known as IBCs), must meet the following requirements in order to employ third-country nationals:

1. The majority of shareholders must be foreign nationals; where the shareholders are foreign companies, they must be registered with the Civil Registry and Migration Department (CRMD).

The following companies are exempt:

• public companies listed on internationally recognised stock exchanges;
• international companies (the former IBC form of ownership) which were operating prior to the legislative changes and for which information can be provided by the Central Bank of Cyprus.

2. Where the percentage of foreign shareholders in the company’s authorised capital is 50 per cent or less, the company’s authorised capital must be equal to or exceed €171,000. Applications from service and consultancy companies whose authorised capital is below this amount will be subject to further consideration to ensure that the specified amount is not required for the conduct of their business.

3. New companies must provide bank and other documents confirming that the funds contributed to the company’s authorised capital amount to more than €171,000 and have been lawfully received from abroad.

4. The company must carry out its activities in Cyprus and have its own office, which must not form part of a residential property or another office, except in cases where the companies hold joint shares. Companies in which, by the nature of their business, employees may work remotely will be considered on a case-by-case basis.

Classification of the company’s foreign employees

Companies that meet all the requirements described above may recruit third-country nationals for the following positions:

(a) Executive Director

The following may be appointed to the position of Executive Director:

• consulting directors or partners (as recorded in the Companies Register);
• managing directors of branches or foreign subsidiaries;
• heads of departments.

The maximum number of executive directors in a company is five, unless the Department of State Registration and Migration has set a higher limit.

The minimum annual remuneration (salary plus additional bonuses) is €41,000 for newly appointed executive directors. This amount must be increased in line with salary indexation.

There are no restrictions on the length of stay for this category of employees.

(b) Middle management, senior management and other key personnel

• This category includes employees who are not executive directors, with a minimum annual salary of between 21,000 and 40,999 euros. This amount must be increased in line with salary indexation.
• The maximum number of employees in this category is 10. If a company requires a larger number of employees, this limit may be increased with the permission of the CRMD. When considering an application, the following factors are taken into account: the company’s areas of activity, the ratio of Cypriot nationals to foreign nationals, and the length of time the company has been in operation.

There is no restriction on the length of stay for this category of employees.

(c) Support staff

• All staff employed as specialists, junior managers, technical staff, clerks and so on are classified as support staff.
• It is expected that companies should recruit Cypriot or EU nationals for these positions. If no suitably qualified professionals are available locally, the company may recruit staff by following the established procedure after receiving confirmation from the Department of Labour that the necessary specialists are not available.

Documents required from the company for the application

If the company is new (and has not previously recruited staff from among third-country nationals):

1. Certificate of registration;

2. Certificate confirming the registered office address;

3. List of shareholders;

4. Articles of Association and Memorandum of Association;

5. List of the company’s directors;

All the documents listed must be submitted in original form, certified by the seal of the Companies Registrar.

6. Detailed description of the company’s field of activity;

7. A list containing the names, full addresses, passport numbers and nationalities of the shareholders;

8. A list of the company’s employees and job applicants;

9. A bank statement showing a balance in excess of €41,600;

10. A lease or purchase agreement for office premises in Cyprus. If these are not available at the time of application, they must be submitted to the Department within 3 months of being obtained;

11. Proof of investment amounting to more than €170,860 (bank and other documents confirming direct investment from abroad).

The government fee for submitting an application ranges from €200 to €400, depending on the applicant’s position.