Foreign companies in Cyprus. Will the changes apply to Poles?

Foreign companies in Cyprus using the special registration system will face new obligations. The government approved changes that provide for annual employment reports from January 1, 2027, employee quota checks after seven years of registration, and a mechanism for deregistering companies that do not meet the requirements.

Does this also apply to Poles running a business on the island? Not automatically. The decisive factor is whether the company is included in a special register, not the nationality of the owner. A Pole running a regular business as a self-employed person is not covered by this system simply because they are from outside Cyprus.

Foreign companies in Cyprus under greater scrutiny

The Council of Ministers approved the revised rules on Tuesday, October 27, at the request of the Ministry of Energy, Trade, and Industry. Minister Michalis Damianos stated that the goal is to support businesses that actually operate on the island and contribute value to the Cypriot economy.

The current Register of Companies with Foreign Participation is to be renamed the Business Support Center Register, i.e. Business Support Center — BSC.

However, this isn't just a standard register that every newly established company is entered into. It's a separate system related, among other things, to the simplified employment of qualified workers from countries outside the European Union.

A company can be registered in Cyprus and have foreign shareholders and not fall under this special regime.

Does a Polish entrepreneur have to submit a new report?

The mere fact that a Pole runs a business does not entail the obligation to submit the announced report to the BSC. First, you need to determine whether the company is entered in a special register.

The official registration service is intended for specific legal entities: companies registered in Cyprus and registered foreign companies. Self-employment is a separate form of business activity.

Therefore, a Polish freelancer, service provider or owner of a small business run as a self-employed person should not interpret this decision as introducing a new report for all foreigners.

The situation may be different for a Pole owning shares in a company benefiting from a special regime. In such a case, the obligations apply to the company, even if some of its owners are EU citizens.

Likewise, simply employing someone from outside the EU does not necessarily mean they will be included in the register. Cyprus has various procedures for employing third-country nationals.

The ratio is 70:30. Poles belong to the group of EU citizens.

It's particularly easy to misread the employment ratio in the description of the changes. It doesn't mean that 70% of Cypriots must be employed and only 30% of foreigners must be admitted.

The official policy of the Department of Migration to date indicates a commitment to achieving 30% of employment is among Cypriots or citizens of other EU countriesThe remainder applies to third-country workers covered by this system.

A Polish employee is an EU citizen. Therefore, they should not be treated in the same way as a non-EU employee in this comparison.

The older guidelines stipulate a review of the proportion after five years. The new decision stipulates a review after seven years of registration. Companies already using the system should check with the BSC how the new rules will be applied to their registration, including transitional provisions and the deadline for the first report.

Removal from the register does not mean liquidation of the company.

The announced deletion mechanism applies to the special BSC register. It should not be equated with the automatic dissolution of the company or its removal from the regular business register.

What matters, however, is the ability to continue to exercise the rights associated with this system. Detailed implications for a specific company and its employees require review of the implementing rules.

The changes are part of a broader strategy for attracting businesses and talent for the period 2027–2030. The first consultation workshop took place on October 26, with the next one scheduled for October 29. The Ministry intends to present the strategy to the Council of Ministers in December 2026.

For Polish entrepreneurs, it's crucial to verify the legal basis on which their company operates. This decision applies to a specific support and oversight system, not to all businesses owned by foreigners.