One of the most common problems families face when moving to Cyprus under the investment program (permanent residence through real estate) is the professional development of the second spouse. An investor who obtains residency through the purchase of a property worth at least €300,000 (Category 6.2) signs a contract not to work in Cyprus for hire. This restriction is often automatically extended to the spouse, creating a “golden cage” situation where the right to live on the island is granted, but the right to legally earn a living is denied. However, Cypriot law provides three effective legal avenues for conducting business and generating income.
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Strictly prohibited: work for hire
It’s important to clearly understand the legal framework: Category 6.2 immigration permit holders ( indefinite permanent residence by investment) are not allowed to hold jobs that would otherwise be available to Cypriot or EU citizens. This means they are expressly prohibited from being employed by local Cypriot companies (shops, hotels, offices).
Violating this rule threatens the revocation of permanent residence status for the entire family. The Immigration Service conducts regular inspections, and the fact that a local employer is making social security contributions immediately reveals any violation.
Path #1: Owning a Business and Receiving Dividends
The law does not prohibit Category 6.2 residents from being shareholders in Cypriot companies. This is the most popular method for investors’ spouses to legalize their income.
- Scheme: The spouse registers a limited company in his or her name. He or she can own 100% of the shares.
- Role of the Director: According to the Ministry of Internal Affairs, an investor and his spouse have the right to hold the position of director in their own company, if this position does not entail receiving a salary.
- Income: Profit is withdrawn exclusively through dividends.
- Nuance: For the scheme to be transparent, the company must conduct real activities (for example, consulting, IT services, trading with foreign counterparties).
Option #2: Remote work for a foreign company
Cypriot law does not restrict residents from working for employers located outside the Republic of Cyprus. This is an ideal option for digital professionals.
If the investor’s spouse continues to work for a company in the US, UK, or UAE , receiving her salary into a foreign account, she does not violate the terms of her permanent residence permit. Moreover, by residing in Cyprus for more than 183 days per year, she becomes a tax resident of Cyprus.
This is where non-domicile status comes into play. It allows for a complete exemption from Special Defense Contribution (SDC) on dividend and interest income (whether received in Cyprus or abroad). However, Income Tax on salaries received for work performed while physically located in Cyprus (even for a foreign employer) is legally payable to the Cypriot treasury if the amount exceeds €19,500 per year.
Path #3: Spouse of a Highly Qualified Professional (BFU)
The situation changes dramatically if the family moved not through the passive “Permanent Residence for Real Estate” program, but through the establishment of a Foreign Interest Company (FIC). If one spouse invests in the creation of a real business (with a share capital of at least €200,000) and employs themselves as director, the company falls under the jurisdiction of the Business Facilitation Unit (BFU).
According to the 2023 amendments, spouses of employees of foreign-owned companies will have free access to the labor market . This means that the spouse of an investor (the owner of such a company) will receive a residence permit with the right to work for any Cypriot company without having to pass market tests or prove the uniqueness of their skills. This is a “golden ticket” for those who want to build a career in employment on the island.
Thus, for the investor’s spouse, the “work ban” only applies to low-skilled labor and competition with locals for basic positions. For entrepreneurship and an international career, Cyprus offers some of the most favorable conditions in Europe.
