Filenews 14 February 2021 - by Adamos Adamou
The attention of foreign companies began to gather the Rapid Activity Mechanism, which has been operating since last October at the Ministry of Energy, Commerce and Industry. Six foreign companies have already joined the Mechanism, as revealed earlier this month by Energy Minister Natasha Pelidou, while another 30 have shown interest in joining in order to take advantage of the facilities it provides.
According to data obtained by the "Economic Liberal", three of the six foreign companies that joined the Rapid Activity Mechanism are already active in Cyprus, while the other three are to gain a presence on the island within the next period.
As stated in "F" the Minister of Energy's Trade and Industry Officer, Katerina Solomou, for the remaining three companies is expected to settle in the Republic of Cyprus within the next six months, since as specified a prerequisite for the inclusion of companies in the Mechanism is the creation of a physical presence in Cyprus.
Technology companies from... Everywhere
So far, companies from the surrounding region, as well as from the EU active in the technology sector, have joined the Mechanism, which is in line with the government's targeting as implemented through Invest Cyprus' strategy to promote Headquartering in this area as well. In particular, when asked about the nationality of the companies that joined the Rapid Activity Mechanism, Ms Solomou said that these companies come from Lebanon, Israel, Luxembourg, Ukraine and the United Kingdom.
According to her, the six companies are active in the fields of Information Technology and Communications, such as the development and distribution of digital mobile games, the development of software programs, the provision of IT consulting services, technical support, as well as digital marketing, digital and advertising services.
In Cyprus with personnel
One of the main reasons for the integration of foreign enterprises into the Rapid Activity Mechanism is to facilitate them in obtaining permits for the employment of a qualified foreign workforce. In turn, however, companies are committed to joining the Mechanism either to expand their activities on the island, if they already have a presence, or to transfer their headquarters to our country. As Mrs Solomou has also mentioned and confirmed, so far both companies that will move their headquarters to Cyprus for activity and companies that are going to expand their activities in the Republic of Cyprus have joined the Mechanism. On the basis of the demands put forward by the companies through the Mechanism, dozens of foreign workers are expected to come to Cyprus in the coming months, a development that is expected to bring immediate and indirect benefits to the economy.
As Mrs Solomou mentioned, according to the business plan of two of the companies that joined the Mechanism, they intend to employ between 80 and 150 employees in 2021, while the other companies will employ a smaller number of people in the first phase, namely between 10 and 15 people. "Companies established in the Republic of Cyprus have already forwarded their requests to the Department of Population and Migration Archive, while the rest are in the process of preparing the necessary submission forms," he added. He also noted that by creating/expanding their presence in Cyprus, in parallel with the transfer of employees from abroad, these companies also provide employment opportunities to domestic human resources.
Asked about this, the official also said that the inclusion of the six companies in the Mechanism took place in the last three months. Ms Solomou also said that the process of serving them is currently under way, taking into account the number of registrations and approvals required to be processed for their activity, but also to secure the residence and work permits of officials from third countries who wish to work.
Condition and the submission of a five-year business plan
Eligible companies for inclusion in the Mechanism
The Minister of Commerce and Industry of the Ministry of Energy, K. Solomos, clarified that for inclusion in the Rapid Activity Mechanism companies must meet certain criteria. In detail the criteria for accession are among others:
· Businesses must have or create a physical presence in Cyprus through the operation of stand-by offices.
· Existing companies to enter the Mechanism: Minimum turnover of €500 thousand per year for 3 of the last 5 years.
· New businesses to join the Mechanism: Deposit of a five-year business plan and growth prospects.
· Prove with appropriate documents that the final beneficiary has made a direct foreign investment of at least €200,000, for the purpose of operating the company in Cyprus.
The Ministry of Energy, Trade and Industry is the competent authority for the approval or rejection of the request for inclusion in the Mechanism aimed at the rapid and efficient servicing of requests received from existing or new companies of foreign interests, for establishment in Cyprus. The services provided by the Mechanism concern:
· To set up a business from a single point for registration of a company, name approval, registration in the Social Insurance Register, employer register and VAT and Income Tax register.
· To provide information and guidance to ensure the necessary operating licenses of the company.
· To facilitate the issue of residence and employment permits for persons from third countries, which will be employed by the companies participating in the Mechanism.
As we have written before, for companies that will join the Mechanism and that will choose Cyprus for any relocation of their headquarters or for the creation of a new base, specific benefits and facilities arise with regard to the employment of a foreign workforce. These include:
· There are no time restrictions on the years of residence of foreign employees (Senior Management, Middle Management Staff, Specialized Personnel).
· It is not necessary to secure a sealed contract from the Department of Labour for third-country nationals who fall within the Senior Management and Inter-Management level or the Specialized Personnel.
· There is direct access to the family reunification of foreign employees with their families (spouse and minor children), provided that the relevant conditions of the Aliens and Immigration Act, Cap. 105 as amended.
· Temporary residence and employment permits may be issued to the companies referred to as Senior Management, Middle Management and Specialized Personnel whose entry into the Republic was obtained by means of a tourist visa, i.e. without prior authorisation from the TPM (this is not part of the existing policy of the Council of Ministers, but an administrative practice followed for the facilitation of companies).
However, the facilities for the employment of a foreign workforce are not unrestricted, since they concern only high-paid staff and workers of specific skills and professions (25 in particular) related to technology, shipping and the pharmaceutical industry.
