The Cabinet on Tuesday approved a bill offering tax incentives to attract talent and promote headquartering in Cyprus.
It’s in line with the Strategy for Attracting Businesses for Activities or/and Expansion of their Activities in Cyprus approved by the Cabinet in October.
Finance Minister Constantinos Petrides said the Interior Ministry is expected to table another bill granting visas and work permits to spouses of professionals who opt to relocate to Cyprus and operate a One-Stop-Shop.
“We are convinced that this programme is one of the most competitive in the EU.
“There is already a huge interest, particularly from high tech companies that have selected Cyprus as the place to relocate their headquarters in recent years.
“We are certain that this bill will further boost the development of this sector which constitutes a strategic aim for the government.”
The bill reduces 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 earnings of €55,000 p.a by an individual already in Cyprus, provided that before their employment, they were 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 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 plan will bring direct and indirect benefits to the Cypriot economy; 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.”