Business Facilitation Unit
Establishing and Growing Your Business in Cyprus
Cyprus has developed a dedicated framework for international businesses seeking to establish, relocate or expand their operations within the European Union.
Through the Business Facilitation Unit (BFU) and the Register of Companies with Foreign Interests, qualifying businesses can establish a substantive presence in Cyprus while benefiting from a more flexible framework for recruiting and relocating skilled professionals from outside the EU.
For international entrepreneurs, investors and business groups, the framework can therefore form part of a broader Cyprus strategy combining corporate establishment, investment, international recruitment and relocation.
Who can qualify?
The framework is primarily aimed at businesses with genuine foreign ownership or investment.
A company may qualify where more than 50% of its shares are owned by third-country nationals. Where third-country ownership is 50% or less, eligibility may still be available where the relevant foreign minority shareholding has a value of at least €200,000, subject to the separate investment requirement.
Certain other categories of businesses may also qualify, including listed companies, qualifying high-technology and innovative businesses, shipping companies and businesses operating in specified pharmaceutical, biotechnology and related sectors.
The €200,000 investment requirement
A central requirement of the framework is an initial investment of at least €200,000 for the purposes of operating the business in Cyprus.
This may be demonstrated through qualifying funds introduced into the company's corporate bank account in Cyprus or through qualifying expenditure on business premises and/or equipment.
The investment must be properly evidenced and, under the current rules, must have taken place within the six months preceding the application. The requirement is therefore not simply about establishing a Cyprus company with foreign shareholders. It is designed to demonstrate a genuine commitment to establishing and operating the business from Cyprus.
Establishing a real presence in Cyprus
The framework also requires the business to maintain appropriate business premises in Cyprus.
The premises must be separate from a shareholder's residence, although properly documented shared-space and sublease arrangements may be accepted. This reflects the broader purpose of the regime: attracting businesses that intend to establish real operations and economic presence in Cyprus.
For international groups considering Cyprus as a European base, the BFU framework should therefore be viewed as part of the wider establishment of the business rather than simply as a registration exercise.
Bringing international talent to Cyprus
One of the most attractive features of the framework is the ability of qualifying companies to recruit and relocate skilled third-country nationals.
Registered Companies with Foreign Interests may employ highly paid third-country nationals without a numerical cap and without the conventional labor-market test applicable to other employment categories.
For founders and international groups, this can be particularly valuable where the Cyprus operation depends upon relocating executives, senior management or specialized personnel alongside the business.
The company must first qualify under the foreign-interest framework, while the individuals concerned must separately obtain the appropriate residence and employment permission.
Building a long-term workforce
The flexibility to recruit internationally is accompanied by an expectation that participating businesses progressively develop their Cyprus and EU workforce.
Companies commit to investing 30% of their total staff in Cypriot and EU citizens over a five-year period. The corresponding 70:30 ratio is due to be assessed for new hires after 2 January 2027.
Where the ratio is not achieved, current government guidance provides for the individual circumstances of the company to be assessed rather than prescribing automatic loss of status.
For investors planning a substantial Cyprus operation, workforce planning should therefore form part of the longer-term establishment strategy.
Why Cyprus?
For international entrepreneurs and businesses, Cyprus offers more than a route to company incorporation. It provides an EU base for international operations, together with a legal and regulatory environment designed to support foreign investment and the relocation of international talent.
The BFU framework strengthens that proposition by giving qualifying businesses a dedicated route through which to establish a substantive presence and recruit the people required to grow their operations in Cyprus.
For investors considering Cyprus, the important question is therefore not simply whether a company can be incorporated, but how the ownership, investment, operational presence and people behind the business should be structured from the outset.
Looking ahead
A successful relocation begins before the company is incorporated or the investment is made. Understanding the BFU requirements at an early stage allows investors to structure the business, capital commitment, premises and relocation of key personnel as part of one coordinated plan.
Nalaris Legal advises international businesses, entrepreneurs and investors establishing or relocating their operations to Cyprus, including corporate structuring, registration as a Company with Foreign Interests, immigration and the wider legal framework surrounding their establishment in Cyprus.
This publication is provided for general information purposes only and does not constitute legal, immigration or tax advice. Professional advice should be obtained in relation to individual circumstances.