Filenews 15 May 2022 - by Adamos Adamou
These are employees who have the ability to work remotely not only from home but also from abroad, in fact travelling around the world, if technology now allows it. They are the digital nomads, in Greek the digital nomads that due to the pandemic and the lockdowns it brought about, not only increased worldwide but also became more well-known.
In this context, several countries through plans and programs try to attract them by offering special residence permits for themselves and their families. Since it is essentially a kind of long-term tourists with the benefits for every destination that gathers digital nomads to surpass those of a simple visitor. Digital nomads will need space for housing, so they will have to rent while spending more generally on either food or entertainment or other services. For the benefits that can arise from digital nomads, the position of the then Minister of Tourism of Greece, Harry Theocharis, was characteristic last year, who argued, citing a report by the MIT Enterprise Forum, that if Greece attracted 100,000 digital nomads per year, with an average stay of 6 months, it could benefit with more than 1.6 billion euros. euro. This figure he explained corresponds to almost the equivalent of 2.5 million tourists for a week's stay in the country, admitting that the competition is too great to boost technological tourism and attract the millions of now digital nomads.
Cyprus, however, belatedly entered the hunt for digital nomads by announcing its own visa plan for digital nomads only around the end of 2021 and which actually came into force at the beginning of this year. The plan was included in the new strategy of attracting companies for the activation or expansion of their activities in Cyprus and for its implementation the Ministry of Interior was designated as the competent authority with the Ministry of Finance also being a party involved.
The plan essentially gives residence permits to digital nomads from third countries since Europeans do not have any particular obstacles to work in another Member State and was designed on the basis of similar plans implemented by other European countries. As mentioned during the presentation of the plan, the Cypriot program was prepared on the basis of the corresponding plans implemented in other European countries (Portugal, Croatia, Estonia, Germany, Czech Republic, Norway and Greece) for third-party nationals under the Digital Nomad Visa regime. In fact, if you look on the internet you will find that the Cypriot plan is almost a copy of the Greek plan. But with some clarifications on tax issues but also with restrictions. As the Cypriot plan to attract digital nomads sets a ceiling on the number of relevant licenses that can be given in this direction. Restrictions that concern whether Cyprus really wants to become a destination for workers with usually high incomes who wish for some time to work abroad either because they want adventure, or because they want to know new places, or because they want to work somewhere with a lower cost of living compared to what their company's base has, or simply because they can.
Visas but with a ceiling
Based on the restrictions initially announced under the Cyprus plan it was decided that the maximum number of beneficiaries for Digital Nomad Visa would be 100.
The ceiling, however, has been changed for some time now and increased by a decision of the Council of Ministers that decided in March to approve the increase of the maximum number of beneficiaries of the Digital Nomad Visa to 500. According to information from "F", the change and increase of the beneficiaries to 500 was decided after Russia's invasion of Ukraine on February 24th in order for Cyprus to be ready if needed to accept more digital nomads. With the onset of the war, we recall that many saw opportunities to attract technology companies mainly from the war zone but also from Russia, although for the moment there does not seem to be any movement in this direction.
Moreover, there is little movement for the time being for the scheme offered by the Digital Nomad Visa, since those digital nomads who rushed to take advantage of it are limited to half of the first ceiling set for beneficiaries of this visa.
Specifically, as "F" is informed, so far about 50 applications for Digital Nomad Visa have been submitted to the Ministry of Interior and specifically to the Department of Civil Registry and Migration, all of which are in the process of being evaluated, without any visa having been issued yet. This fact may be related to the delay that existed on the part of Cyprus in presenting its own plan as well as to the restrictions that initially existed and that still exist. It is noted that the descent into Cyprus of digital nomads was not completely prohibitive for third-country nationals since they could enter with a tourist visa but with a restriction on their stay, just three months, while those who wanted a longer duration of stay could do so through the Permanent Residence Program. Only, however, if they had at least €300,000 at their disposal for investment in real estate, a criterion that is rather an inhibiting factor for someone defined as digital nomad.
Beneficiaries and conditions
The Cypriot plan for the provision of a Digital Nomad Visa essentially concerns a residence permit to third-country nationals with a minimum of €3,500 in the Republic of Cyprus but no work permit. The measure was decided on the basis of the new strategy to strengthen Cyprus as a business centre as globally there is a shift for remote work. This, in line with the announced strategy of attracting companies, creates prospects for Cyprus where it can attract people who will reside in Cyprus but will work in companies operating abroad. Beneficiaries to apply for the Digital Nomad Visa are self-employed/ self-employed third-country nationals or employees who work remotely using information and communication technologies with employers/ customers outside Cyprus for a period of 12 months. With the residence status that the digital nomads will acquire, they will have the right to stay in the country for up to one year, but with the right to renew for another two years (the same is provided for by almost all the plans offered by European countries, including Greece). As part of the residence permit they will acquire in Cyprus, they will also be able to be accompanied by their family members, to whom it is granted, upon their application, a residence permit that expires at the same time as the sponsor.
Under the scheme, during a stay in Cyprus it is not allowed, for the spouse or partner (concerning persons who have entered into a civil partnership) nor the minor family members of the sponsor, to provide dependent work or carry out any form of economic activity in the country. The plan also clarifies that if digital nomads reside in the Republic for one or more periods that in total exceed 183 days within the same tax year then they are considered tax residents of Cyprus provided they are not tax residents in any other State. Based on the latter, several Cyprus-based firms and financial institutions in the context of the presentation of the Cypriot program highlight the benefits of the Cyprus tax system and other incentives, although tax incentives to attract digital nomads have other countries.
However, for the granting of a residence permit to digital nomads, there are prerequisites since according to the plan the permit is granted to the interested party, provided that he/she presents the following:
- A solemn declaration stating his/her intention to reside in the country with a residence permit for the provision of remote work and his/her commitment that he/she will not provide in any way work or services or work to an employer based in Cyprus.
- An employment or work contract or proof of employment relationship with an employer, a natural or legal person, who is established outside the Republic of Cyprus, of indefinite duration or in the case of a fixed-term contract with a remaining duration covering the period of the residence permit granted, or employment contracts or work contracts of indefinite duration or, in the case of a fixed-term employment contract, with a remaining duration covering the period of validity of the residence permit granted, in case the third-country national is self-employed with more than one employer established outside the Republic of Cyprus, or details of the status of the applicant in the business, as well as data concerning the name, the registered office, the field of activity and the corporate purpose of the business in case the third country citizen is self-employed in his own business, which is located outside the Republic of Cyprus.
- Evidence that he has sufficient resources, at the level of a fixed income, to cover his living expenses during his stay in the country, without burdening the national social welfare system. The amount of sufficient resources is set at three and a half thousand (€3,500) euros per month and is proved by the employment or work contract or the proof of employment relationship, in the case of employment, services or work or by a bank account. If the sufficient resources come from salaried services of employees, services or work, the above minimum amount refers to net income after payment of the required taxes in the country of supply of the work. The amount mentioned above is increased by twenty percent (20%) for the spouse or cohabitant and by fifteen percent (15%) for each child.
- Medical coverage.
- Clean criminal record from the country of residence.
Visas but with a ceiling
Based on the restrictions initially announced under the Cyprus plan it was decided that the maximum number of beneficiaries for Digital Nomad Visa would be 100.
The ceiling, however, has been changed for some time now and increased by a decision of the Council of Ministers that decided in March to approve the increase of the maximum number of beneficiaries of the Digital Nomad Visa to 500. According to information from "F", the change and increase of the beneficiaries to 500 was decided after Russia's invasion of Ukraine on February 24th in order for Cyprus to be ready if needed to accept more digital nomads. With the onset of the war, we recall that many saw opportunities to attract technology companies mainly from the war zone but also from Russia, although for the moment there does not seem to be any movement in this direction.
Moreover, there is little movement for the time being for the scheme offered by the Digital Nomad Visa, since those digital nomads who rushed to take advantage of it are limited to half of the first ceiling set for beneficiaries of this visa.
Specifically, as "F" is informed, so far, around 50 applications for Digital Nomad Visa have been submitted to the Ministry of Interior and specifically to the Department of Civil Registry and Migration, all of which are in the process of being evaluated, without any visa having been issued yet. This fact may be related to the delay that existed on the part of Cyprus in presenting its own plan as well as to the restrictions that initially existed and that still exist. It is noted that the descent into Cyprus of digital nomads was not completely prohibitive for third-country nationals since they could enter with a tourist visa but with a restriction on their stay, just three months, while those who wanted a longer duration of stay could do so through the Permanent Residence Program. Only, however, if they had at least 300 mm at their disposal. euro for investment in real estate, a criterion that is rather an inhibiting factor for someone defined as digital nomad.
