Cyprus is tightening the rules for foreign-interest companies to ensure they contribute to the local economy through genuine business activity, rather than simply registering on the island.
The Cabinet approved changes to the registration scheme on Tuesday, according to Energy Minister Michalis Damianou. The revised framework aims to place greater emphasis on companies’ actual economic activity, regardless of the origin of their funding.
Annual employment reports from 2027
From January 1, 2027, registered companies will have to submit annual employment reports. The reports will help authorities monitor staffing levels and check whether businesses meet the scheme’s requirements.
Companies that fail to comply could be removed from the register under a clearer procedure. Removal from the scheme would not, by itself, mean that a company must close.
Damianou also said checks on the scheme’s 70%-30% employment ratio would take place seven years after a company registers. However, his announcement did not specify which categories of employees the ratio covers.
Register to get a new name
The register will be renamed the “Business Support Center” as part of the changes.
The revised rules will also clarify whether companies can retain their registration if their ultimate owners or controllers acquire Cypriot or another EU citizenship.
The government says the changes are intended to support businesses with genuine operations, growth potential and a meaningful contribution to the Cypriot economy, while allowing action against companies that do not meet their obligations.
Wider review of Cyprus’ business strategy
The changes form part of a broader review of Cyprus’ strategy for attracting businesses and skilled workers.
The review is expected to be completed in December 2026. A second consultation workshop involving businesses and other stakeholders is scheduled for October 29.
For companies operating in Cyprus, the revised framework will place greater emphasis on demonstrating actual economic activity and meeting the scheme’s requirements.
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