Cyprus is promoting a third Start-up Visa scheme with state funding of €500,000 to ensure it is more attractive to third country investors who have so far stayed away.
The decision of the government to fund the scheme for the first time with half a million euros through the budget of the Research Promotion Foundation, aims to attract more investors from third countries, since so far it has not yielded the desired results.
The scheme was launched on a pilot basis from 2017 until February 2019 and figures from the Ministry of Finance showed that only 14 applications had been submitted of which five were approved and six residence permits were granted.
Four of the applications that were approved had been submitted by individuals of Russian origin, while one was from the US.
The applications concerned start-ups in the fields of information and communications technology, marketing, real estate, tourism and energy (batteries).
“The effectiveness of the scheme is less than expected given the fact that only 14 applications had been submitted within two years and six permits were approved, while we could issue 150 visas,” a source from the Ministry of Finance told the CNA.
Nicosia extended the application period for the scheme by two years following its completion last February. The revised scheme will be valid for the period March 2019 to March 2021, during which up to 150 visas can be issued.
The "Cyprus Start-up Visa" scheme allows entrepreneurs from third countries, individuals or in a team, to enter, reside and work in Cyprus in order to establish/operate/develop a start-up with a high growth potential.
It aims to create new jobs, promote innovation and research, develop the business ecosystem and consequently the economic development of Cyprus.
Along with the renewal of the scheme the Government made amendments to it in an attempt to improve its effectiveness.
For example, the amount of capital that the applicants must have access to has been reduced to €20,000 from €50,000, which may include venture capital funding, crowdfunding or other sources of funding.
Moreover, for persons eligible to participate in the scheme there is no maximum period of residence in Cyprus as long as they are under this scheme.
As a result, they have the prospect of long-term residence in the Republic and directly acquire the possibility of family reunification in the case of paid employment.
In the case of self-employment, immigration law allows family reunification after two years and while family members are abroad.
CNA said some interest has been shown but no applications have been submitted under the new invitation yet.
Along with their application, the applicants must submit a business plan that provides for the enterprise to have head offices and tax domicile in Cyprus.
The business plan evaluation is based on five criteria, which are scored from 0-3 and a score of at least 11/15 is required for approval. The evaluation process is completed within five weeks.
Lithuania, Estonia, Latvia, Denmark, Sweden, Ireland, Italy, France and Spain implement similar schemes.
