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The Innovative Synergy of Living and Working in Cyprus

ADDED 2024-10-30

By our Business Development Department.

Cyprus Vision 2035 is a transformative roadmap aimed at positioning Cyprus as a premier destination for business, innovation and high-skilled talent. Central to this vision are strategic initiatives designed to attract international professionals and investors, including the Cyprus Blue Card and IP Regime.

Cyprus offers a multitude of benefits for third-country nationals seeking to work and live in Cyprus. Designed to attract highly skilled professionals, this residence permit opens doors to a wealth of opportunities within the European Union. From streamlined immigration process to favourable employment conditions, the Cyprus Blue Card provides a competitive edge in a globalised job market, thus making Cyprus the strategic move for career advancement and personal growth in Europe’s thriving economies.

Following the amendments to the Civil Registry Law of Cyprus which came into force on July 2024, the following provisions are of particular importance, as Cyprus sets to lead the way to the synergy of dynamic environment for business development, talent attraction and tax efficiency.

  • Definition of simpler procedures regarding the entry and residence of third-country nationals in the Republic for the purpose of highly qualified employment, as European Union Blue Card holders and their family members;
  • Reduction of the minimum required duration of the employment contract for highly qualified employment purposes, so that it is at least six (6) months instead of at least twelve (12) months, as was previously in force;
  • The process of determining the total number of persons who will be able to enter and reside in the Republic for highly qualified employment purposes, taking into account the development priorities and the situation in the labour market in the Republic, as well as the capacity of the Republic to receive them;
  • Setting of a gross annual salary threshold for European Union Blue Card holders, so that it is at least equal to the average gross annual salary in the Republic, but does not amount to more than 1.6 times the amount of the average gross annual salary in the Republic.
  • Recognition of possession of professional skills in the field of information and communication technologies, i.e. knowledge, skills and competences attested by professional experience, as equivalent to knowledge, skills and competences attested by comparable higher education qualifications;
  • Strengthening the rights of European Union Blue Card holders and their family members.
  • Definition of the procedures that will be applied regarding the mobility of the above mentioned persons, within the European Union;

In light of the above and in combination with the IP Regime, Cyprus offers unique and substantial benefits particularly for highly skilled workers in the technology, innovation and intellectual property sectors, seeking to capitalize on Cyprus’ favourable tax environment and talent-friendly immigration polices.

  • Attracting Skilled workers in IP-Intensive Sectors. The Cyprus Blue Card is a residence permit for highly skilled third-country nationals. It facilitates the hiring of professionals in sectors like technology, innovation and IP. Regime, which with its tax incentives for IP income, makes Cyprus a favourable destination for companies engaged in research, innovation and IP-related activities, attracting both companies and professionals;
  • Favourable Tax Treatment for IP-related income: The Cyprus IP Regime provides an 80% tax exemption on profits derived from the exploitation of IP assets. This includes royalties, license fees and capital gains from the disposal of qualifying IP. Furthermore, highly skilled employees with a Cyprus Blue Card working in companies which own or develop IP, can benefit from a favourable tax regime as their companies can significantly reduce their corporate tax liability and potentially increase wages and/or benefits;
  • Low Personal Income Tax for Blue Card holders: Especially those with high salaries, may benefit from Cyprus’ tax incentives for high-income earners (50% income tax exemption for employees earning over €55,000 annually. This makes Cyprus an attractive destination for professionals who are key contributors to IP-related work (R&D, innovation, etc), where high salaries are common;
  • Innovation-Driven Business Environment: The combination of the Blue Card with the IP Regime, promotes Cyprus as a hub for start-ups and tech companies attracting international talent, with the ultimate goal to maximize profits and grow their business. This very environment supports knowledge-based industries, where IP assets are central, thus making Cyprus attractive for IP developers and innovators;
  • European Market Access: Blue Card holders benefit from the free movement within the EU for work purposes. This is a major advantage for IP professionals as it allows them to collaborate across the EU countries and access a wider market, while Cyprus serves as their base of operations. Coupled with the IP Regime’s tax benefits, professionals and companies can use Cyprus as a strategic location for handling their IP, while also having access to the broader EU market;
  • Long-Term Residency and Stability: The Cyprus Blue Card as the way to permanent residency and further provides social benefits. Professionals in the IP sector can enjoy stability while living in Cyprus, thus making it easier for them to focus on long-term R&D projects, IP development and innovation strategies, while also benefiting from Cyprus’ favourable tax regime;
  • Cost-efficient IP Management: Cyprus offers relatively low costs of living and business operations, especially compared to other EU countries. This benefits both the Blue Card holders and companies under the IP regime, making the overall cost of running IP intensive businesses more efficient, while still benefiting from the high-quality talent.
  • Comprehensive Legal Protection for IP: Cyprus has a robust legal framework for the protection of IP rights, which is crucial for companies and professional working with valuable intellectual property. Coupled with the tax incentives, this makes Cyprus an appealing location for establishing and exploiting IP assets;