The Cyprus Startup Visa Programme
Provides Non-EU/EEA entrepreneurs and senior executives with residency and business opportunity in Cyprus, together with corporate and personal tax efficiency and a simple pathway to EU Citizenship.
Lying in the north-eastern Mediterranean Sea at the crossroads of Europe, Asia and Africa, Cyprus occupies a strategic position for access to all three continents. Its two international airports – Larnaca and Paphos – make Cyprus an excellent platform for conducting business throughout Europe and the rest of the world.
This prime location, together with its membership of the European Union, rich cultural heritage and advanced infrastructure all make Cyprus a highly attractive destination for those looking to establish a business and residence. It also happens to have one of the most attractive tax regimes in Europe.
Its landscape encompasses beaches, mountains and forests, while its climate, with more than 320 days of sunshine per year, offers the archetypal Mediterranean lifestyle. One of the safest countries in Europe, Cyprus also boasts advanced healthcare services and a great selection of international schools, making it ideal for raising a family.
The Cyprus Startup Visa Programme
The Cyprus Startup Visa Programme is designed to enable skilled entrepreneurs from non-EU and non-EEA countries, either individually or as a team, to reside in Cyprus and work to establish, operate and develop innovative business start-ups with high growth potential.
The aim of the programme is to create new job opportunities in Cyprus, encourage innovation and research, improve the business ecosystem, and contribute to the country’s economic growth.
Under the programme, innovative startups are defined as small unlisted enterprises registered within the last five years that have not yet distributed profits and have not been formed through a merger. The business should develop or offer new products, services or processes that disrupt or create markets. They should be based on new or adapted technologies or pioneer new business models.
Beneficiaries of the programme fall into either of two categories:
- ‘Individual Startup Visa Scheme’ – applicants should be a non-EU/EEA country national who will act as the sole founder of an innovative start-up.
- ‘Team Startup Visa Scheme’ – applicants should comprise a team of up to five individuals who are nationals of non-EU/EEA countries, which should include only the founders of an innovative startup or at least one founder and additional executive members.
In both categories at least 25% of the company’s shares must be owned by the founder and/or their team.
New Startup Visa changes
Following Cabinet approval on 18 December 2024, Cyprus has enacted modifications to its startup visa programme, which came into effect on the 2 January 2025. These revisions include:
- Extension of Residence Permit validity – the residence permit for successful applicants has been extended from two to three years, with the possibility of two-year renewals, instead of the original one-year renewal period.
- Reduction in equity requirement – the required percentage of equity that third country applicants must hold in the Cypriot company has been reduced from 50% to 25%. It should be noted that an applying start-up group can consist of up to five members (founders or senior executives) and must have a minimum of €20,000 in capital, or €10,000 if there are fewer than two founders.
- Employment of third country nationals – the allowable proportion of third country nationals employed by the company has increased from 30% to 50% of total staff. Companies can also hire additional foreign personnel if the startup investment in Cyprus equals or exceeds €150,000.
Residency Visa Renewal
The new Startup programme also offers more flexibility for foreign entrepreneurs and investors, with clearer criteria for renewing their start-up residency visas after three years. To renew their visas, the start-up must demonstrate it has met one of the following criteria:
- Generated 15% revenue growth.
- Attracted at least €150,000 of investment.
- Employed at least three Cypriot nationals.
- Participated in a local innovation support scheme.
- Launched at least one product or service.
Tax Efficient Benefits
The corporate and personal tax benefits available in Cyprus have always been a significant draw for both individuals and companies. The numerous advantages, deductions and exemptions offered, place Cyprus’s tax regime as one of the most attractive and competitive in the world.
1. Corporate Tax Benefits
- A low corporate tax rate of 12.5% for Cyprus tax resident companies. Technology companies that generate Intellectual Property (IP) also may qualify for an additional 80% tax exemption, effectively reducing their corporate tax rate to 2.5%.
- Tax-resident companies can carry forward their tax losses for up to five years. This allows them to use these losses to offset future taxable profits. This rule is especially beneficial for startups, which typically experience losses during their early stages, enabling them to capitalise on potential future profits.
- Tax-free repatriation of profits and capital.
2. Personal Tax Benefits
The Cyprus Tax Residency Programme provides non-domiciled tax residents with the following tax benefits:
- No income tax on dividend and interest related income.
- No income tax on salaried services rendered outside Cyprus for more than 90 days in a tax year.
- Low progressive income tax rates, with the first €19,500 being tax exempt.
- A 50% income tax exemption on income earned through Cyprus based employment for 17 years, provided annual income exceeds €55,000 per annum. *
- No tax on profits from disposal of securities, including shares, bonds, options and units in collective investment schemes.
- No Capital Gains Tax on assets other than immovable property situated in Cyprus.
- No wealth taxes.
- No inheritance taxes.
- No gift taxes.
* This exemption applies for a period of 17 tax years or until the provisions of this Article are abolished, whichever is the earlier. It is only available to those who have not been tax resident in Cyprus during the previous 17 years.
Establishing ‘Citizenship through Naturalisation’ in Cyprus
To streamline the citizenship process and enhance safeguards, the Cypriot government revised the criteria for obtaining Cypriot citizenship though naturalisation by passing amendments to the Civil Registry Laws in December 2023.
Generally, applicants for citizenship though naturalisation must have a minimum of seven years of legal residence in Cyprus within the 10 years preceding the application. There must also have been a continuous legal stay of 12 months immediately prior to the submission of the application, although absences of up to 90 days within this 12-month period do not disrupt continuity.
Applicants are further required to show that they are a person of good character, have Greek language proficiency, have knowledge of contemporary political and social reality, have suitable accommodation and financial stability, and have a genuine intention to live in the Republic of Cyprus.
To recognise the economic value of skilled professionals, however, special provisions were included to reduce this qualifying residency period to four or three years for ‘highly skilled employees’ of specific classifications of companies – including companies of ‘foreign interests’ or companies operating in the shipping, pharmaceuticals, biotechnology, technology and innovation sectors.
Highly skilled employees are regarded as individuals who, in addition to being employed by an eligible company, fulfill one of the following criteria:
- Hold a temporary residence permit and are employed as ‘Director’, ‘Specialist’ or ‘Key Personnel’.
- Hold any type of immigration status in Cyprus, are employed in a position relevant to their academic/professional qualifications and past experience, and receive a minimum monthly gross salary of €2,500.
For qualifying highly skilled employees the applicable periods of legal residence in Cyprus within the 10 years preceding the application are reduced to:
• Three years for B1 Greek language certificate holders.
• Four years for A2 Greek language certificate holders.
Spouses and civil partners of highly skilled employees can apply under the same conditions, either simultaneously with their spouse or at a later stage. Children, who at the time of the submission of the highly skilled employee’s application were underage, are eligible to apply as minors, even if they will reach adulthood by the time the highly skilled employee is naturalised as a Cypriot citizen.
An expedited processing option is available, which ensures that applications are processed within eight months from the date of submission, subject to the payment of a €5,000 government fee.
Sovereign’s comprehensive Corporate Establishment, Residency and Citizenship Planning Services
Sovereign works closely with applicants during each stage of the planning and implementation process. When combined and managed correctly, the following Sovereign Group services assist companies, individuals and families to develop and implement a comprehensive, flexible and tax efficient strategy:
- Corporate establishment and management services
- International residency and citizenship planning and implementation
- Tax residency planning and implementation
- Trusts and foundations
- Estate and succession planning
- International retirement plans
- Wealth management
- International life and medical insurances.
For further information, to discuss your requirements and/or to determine whether you qualify for the Cyprus Startup or any other suitable residency, tax residency or citizenship programmes, please contact Sovereign’s Residency & Citizenship Planning team below
