The facilities provided by Cyprus for the operation of companies from third countries through the “Company Facilitation Unit (SME)” – as renamed since the beginning of the year the “Rapid Activation Mechanism” of the Ministry of Trade, Energy and Industry – produce results and are proven particularly useful in the new situation created by the war in Ukraine.
The war has caused businesses and professionals to flee Ukraine, Russia and other neighboring countries looking for a new place to keep working. In this difficult environment, Cyprus is attracting businesses.
The numbers confirm the interest. In the whole of 2021, 350 companies of foreign interests were established in Cyprus through MDE. From the beginning of 2022 until last week, about 210 companies have been active, of which 180 by the end of February and another 34 in March. The flow of the last few days comes from Ukraine, Belarus and a smaller number from Russia. In addition, existing companies are transferring additional staff to Cyprus. None of these companies have been sanctioned or restricted, but have an international presence and are looking for a new place to do their work. Turkey and the Gulf Emirates (Qatar, Dubai), countries that have not imposed sanctions and allow flights. There they can be rebuilt.
Their final destination is estimated to be Singapore, Hong Kong, but also Israel.
Descent of workers
The new companies that have been established in the last 16 months in Cyprus bring to Cyprus 1,300 executives, together with their families, who are paid at least 2,500 euros per month (gross). It is noted that companies in order to be able to take advantage of the possibility of rapid installation – which includes the rapid issuance of work permits – must have a gross earnings of at least 2,500 per month.
To these numbers, should be added the professionals from third countries who take advantage of the “digital nomad” scheme. The ceiling for residence and work permits has risen to 500 from 100.
The real estate market
This is a large number of employees, who will move and spend in Cyprus. 1,300 housing units are needed for their housing alone. Most companies choose Limassol for their location and to a lesser extent Nicosia and Larnaca. As a result, the demand for housing units is increasing, especially in Limassol, a phenomenon that is expected to continue in the coming months.
Mr. Kinaygeirou notes that there is a significant demand for apartments in the city centers, while there is a gradual lack of large, quality offices.
This is the positive side, in terms of real estate. The negative concerns the restriction of the activities of Russian companies in Cyprus, which is expected to affect a number of professionals, such as lawyers, accounting firms, etc.
“The reduction of their incomes is expected to have an impact on the local real estate market “, real estate appraiser Antonis Loizou emphasizes in KYPE.
The Strategy
On October 15, 2021, the Council of Ministers approved the “Strategy for Attracting Businesses for Activities and/or Expanding Their Activities in Cyprus”, in order to attract both international investments and talent. It includes a series of actions and reforms in various sectors, aimed at strengthening the position of Cyprus as an international business center of high growth.
The aim of the project is to contribute to the redefinition of the Cypriot development model.
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