The New Cyprus Start-up Visa Scheme For Non-EU Entrepreneurs
The ‘Cyprus Start-up Visa’ Scheme was first launched as a test pilot in 2017; allowing talented Non-EU National Entrepreneurs, on an individual or team basis, to enter, reside and work in Cyprus for opportunities to establish, operate and develop a start-up with a high potential for growth.
The Cyprus Ministry of Finance have taken on board feedback from the 2017-2019 structure and have improved it considerably for the scheme which launched earlier this year, making it much cheaper and accessible to apply for.
The Scheme consists of two parts:
- Individual Startup Scheme.
- Team Startup Scheme.
1. The Cyprus Individual Startup Visa Scheme
An individual such as a company founder may apply under this option as long as they:
- Have access to EUR €50,000 (which may include venture capital funding, crowdfunding or other financing options).
- Hold an undergraduate degree or equivalent qualification.
- Have a B1 level of Greek and/or English.
2. The Cyprus Team Start-up Visa Scheme
A team consisting of a maximum 5 non-Eu country nationals can apply that is comprised of at least one founder and other senior executives and:
- Must own a collective total of more than 50% of the company’s shares.
- The founder must have access to funding of EUR €25,000.*
- At least one of the team members holds an undergraduate or an equivalent professional qualification.
- All team members have a B1 level of Greek and/or English.
* In the event that there are multiple founders of the company; access to collective total of EUR €50,000 is required which may include venture capital funding, crowdfunding or other sources of financing.
The Ministry of Finance is already devising the third Startup Visa scheme that will be in place for a two-year period from 2021 until 2023, this time with a state funding of EUR €500,000, following a decision of the Cabinet.
The Government has been working with the Cyprus Research Promotion Foundation, and used the budget of 500,000 euros from the pilot scheme in order to make it even more attractive to third country national investors, since the scheme was not as popular as anticipated.
Breakdown of Key Figures From the Pilot Scheme
The scheme ran from February 2017 until February 2019 and figures from the Ministry of Finance showed that at a glance:
- 14 applications in total were submitted over the 2 years.
- 5 of these applications were approved.
- 6 Cyprus Residence Permits were granted.
- 4 of the applicants were from Russia.
- 1 applicant came from the US.
The applications concerned start-ups in the following sectors:
- Real Estate.
- Energy (batteries).
“The effectiveness of the scheme was less than anticipated; given that 14 applications had been submitted over a two-year period and merely six permits were approved; while there was capacity to issue 150 visas” a source from the Ministry of Finance stated.
The Government 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 a maximum capacity of 150 visas may be allotted.
The scheme’s goal is the creation of new jobs, the promotion of innovation and research, the development of 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.
Key Changes to Ensure Greater Uptake
For example, the amount of capital that the applicants must have access to has been reduced to EUR €20,000 from EUR €50,000, which may include venture capital funding, crowdfunding or other forms of financing.
Additionally, for eligible individuals, there is no maximum period of residence in Cyprus as long as the scheme is in effect. As a result, investors now have the chance to attain long-term residence in Cyprus with the option of family reunification. In the event of self-employment, Cyprus immigration legislation now permits family reunification after two years, even if family members are abroad for this time.
In order to make a successful application, the applicants must submit:
- A sound business plan or model for the company.
- Proof of the company’s Cyprus-based head office.
- Proof that the entrepreneurs official tax domicile has been established in Cyprus.
The business plan is then sent for evaluation and is based on five measures, which are scored from 0 – 3 for each criterion with a total score of 15 points allowed. For approval of the visa, a score of at least 11 is required.
The following countries plan to implement similar schemes: