The Council of Ministers decided yesterday to tighten controls on foreign interest companies operating in Cyprus, focusing on their real economic activity, regardless of the origin of their funds.
On the proposal of the Minister of Energy, Commerce and Industry, Michalis Damianos, the existing framework for the registration of companies of foreign interests is revised, with the aim of strengthening supervision and accountability. As Mr. Damianou pointed out, the decision aims to attract businesses that "have a substantial presence and create added value for Cyprus". As part of the revision, the Register of Foreign Interest Companies is renamed to "Business Service Centre Register".
Audits after seven years
In practice, the changes focus on checking the compliance of businesses with the obligations they undertake when they register. In particular, the checks for the observance of the 70%-30% employment ratio (Cypriots – foreigners) will be carried out seven years after the registration of the companies, while for those that do not meet their specified obligations, a mechanism for deletion from the Register is provided.
It is indicative that based on the decision of the Minister, businesses will be obliged from January 1 to submit an employment report every year, with the aim of systematically monitoring their compliance.
The new framework also clarifies the conditions under which a company's registration is maintained when its final beneficiaries acquire Cypriot or other European citizenship.
New strategy in December
The revision of the registration framework is part of the broader Business and Talent Attraction Strategy, which, according to Mr. Damianou, is expected to be completed within December. The minister underlined that the new framework supports businesses with "substantial presence, growth prospects and real contribution to the Cypriot economy", with clear procedures and effective supervision.
In the meantime, consultation with the business community and stakeholders has begun. As the Minister mentioned, the first workshop took place on Monday, while the second follows on October 29, as part of the review of the strategy.
