Cyprus’s latest changes for its startup visa program include longer residence permits, easy renewal, less equity required, and more sponsorship availabilities.
Deputy Minister for Research, Innovation, and Digital Policy Nicodemos Damianou announced on 18 December that the cabinet approved all these changes so that the program can be made more attractive to foreigners. The new changes are in effect from 1 January 2025. Cyprus is an EU country and soon it seems to become a member of the Schengen zone.
What are the new changes?
The cabinet approved many changes to the Startup visa rules which are:
Enhanced Access for Start-ups
The revised scheme enables non-EU start-up founders and senior executives to enter, reside, and work in Cyprus, fostering both new ventures and the relocation of existing start-ups.
Broader Economic Impact
The Startup visa program aims to bolster Cyprus’s innovation and entrepreneurship ecosystem by generating a critical mass of start-ups, talent, and cutting-edge jobs, enhancing economic growth, and diversifying the economic model.
Improved Flexibility
In the new rules, the key changes include extending residence permits to three years with easier renewal terms, lowering the required equity stake for applicants from 50% to 25%, and allowing foreign workers to make up 50% of the workforce.
Incentives for Investment
Start-ups investing €150,000 or more in Cyprus can hire additional foreign personnel, while those with annual revenues over €1 million or research and development expenses above 10% of operating costs enjoy tailored evaluation criteria.
Renewal and Operational Criteria
From 2025, start-ups must meet specific criteria for permit renewal, such as achieving 15% revenue growth, investing €150,000, creating three new jobs, or launching new products, while employees are expected to have basic digital skills.
What is a Cyprus’ Startup Visa Scheme?
The “Cyprus Startup Visa” is a key initiative within the Policy Statement on Strengthening the Entrepreneurial Ecosystem. The scheme is valid until December 2026. A maximum of 150 visas can be issued under this program. The startup visa scheme is divided into two categories depending on the applicant:
Individual Startup Visa
Available to non-EU nationals intending to establish an innovative start-up as sole founders.
Team Startup Visa
Allows a team of up to five non-EU nationals to apply, consisting either entirely of founders or at least one founder and senior executives.
CATEGORY A: Startups at Pre-Revenue Stage or Post-Revenue under €1M
Pre-Revenue Startups
A pre-revenue startup is one that has not yet earned revenue from its products or services but has big potential for innovation.
Who Can Apply?
Applicants must submit a business plan that:
- Shows how the startup fits the EU definition of innovation.
- Demonstrates the startup’s ability to create groundbreaking or improved products, services, or processes with high technological or industrial risk.
- Highlights disruptive business models or scalable international platforms.
How to Apply?
One can apply for this scheme by:
- Completing the application form and follow the business plan guidelines.
- Submit all documents in English, either from abroad or while legally in Cyprus.
Evaluation Process
- Business plans are reviewed by two independent evaluators based on specific criteria.
- If both evaluators score it ≥3 per criterion and ≥15/20 overall, the company qualifies as ‘Innovative.’
- If scores are borderline, a third evaluator steps in for the final decision.
Category B: Startups with Proven Revenue
For startups that have surpassed a revenue threshold, here’s how to qualify:
Requirements
To fulfill the requirements, the applicants should:
- Submit an application showing compliance with EU innovation criteria.
- Provide a Certificate from an External Auditor verifying:
- Revenue of at least €1 million from products, services, or processes based on the latest audited financial accounts.
- R&D expenses represent at least 10% of total operating costs in one of the past three tax years.
- Include audited financial accounts for the relevant years, clearly detailing R&D expenditure categories.
Further details can be found on the following official links of the Cypriot government:
Application form Cyprus Startup Visa
Guidelines for Drafting a Business Plan
Certificate from an External Auditor