The Cyprus government has approved a new tax incentive scheme to attract foreign employees and companies. In return, the state gets a boost to the local economy and a transformation of the island’s infrastructure.

How it used to be

Non-residents of Cyprus, who took a job here and earned more than €100 thousand a year, could get a 50% tax deduction during the first 10 years of employment. 

How it works now

The new scheme allows you to get a 50% tax deduction for a minimum income of €55,000 per year, and the period of such a discount extends up to 17 years. This benefit is available immediately after the first year of employment in Cyprus.

In addition, further measures are being prepared to make it easier for the spouses of foreign workers to obtain a residence permit in Cyprus and access to the local labor market.

An important aspect. In order to obtain the tax benefits, both foreigners and citizens of Cyprus must live for at least 12 years outside of Cyprus. And for those already staying here, it must be the first company in which they work on the island. 

Who is interested in such an innovation

  • Foreign companies, which will thus be motivated to move their headquarters to Cyprus.
  • Qualified specialists with a high level of income, who come to the island, or already work here.
  • Cypriot professionals living abroad — they would be subject to the same benefits, which could be an encouragement to return to their home country.

There is still time to prepare

A transition period will be granted to bring one’s position in line with the right criteria. According to the Minister of Finance of Cyprus, the grace period for new employees will be 2 years, and for existing employees — 6 months.

That is, those already working on the island should have time to increase their income to €55 thousand per year for 6 months, and those who are just arriving here to work, have 2 years for this. 

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