Cyprus Regulatory Environment
Until
the installation of the EU acquis communautaire,
labour regulation in Cyprus was very light.
Much
pay bargaining is traditionally carried out
directly between employers and employees; however
there has also been some collective bargaining
between trade unions and employers' organizations,
and the Government has been known to take part
in tri-partite resolution of disputes.
Due
perhaps partly to the island's economic success,
and the fairly hardworking and practical ethic
of Cypriots, the number of man-days lost each
year to strikes at about 70 per 100,000 was
historically very low by normal OECD standards.
Recently,
however, striking seems to have become more
popular, perhaps because of strains induced
in the labour market by EU entry.
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Cyprus Work Permits
Work
permits for foreigners are issued under the
Alien and Immigration Laws and Regulations,
by the Migration Office (but see Entry and Residence as
regards Temporary Residence Employment permits
for expatriate employees). Work permits are
normally issued to foreigners only when no suitably
qualified local staff are available.
Under
a law implemented in July 2000, foreigners in
Cyprus must either have a five-year work permit
or have worked on the island for five years
or have a combination of worked time and work
permit totalling a minimum of five years before
their spouses can join them.
But
in November 2000, the Cyprus government introduced
new regulations designed to make it easier for
some foreigners to have their loved ones live
with them. However, this solely applied to those
EU nationals and non-Cypriots who work in certain
sectors: offshore workers, reporters, foreign
correspondents, accountants with big firms,
lecturers, teachers and those who have invested
a designated amount in local businesses.
The
five-year permits would be automatically granted
to new foreign entrants into these sectors and
those renewing permits would be given extensions
long enough to enable them to meet the 'five
years in total' clause, the government revealed.
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Cyprus Social Security
There
is a mandatory earnings-related social security
scheme in Cyprus which applies to both employed
and self-employed individuals, whether resident
or not, and whether Cypriot or not. However,
non-resident employees of offshore entities
are excluded. Self-employed persons are assessed
on notional income levels depending on their
occupation.
Contributions
to the various funds are tax-deductible, and
the employer's contribution is not taxable for
the employee.
Benefits
include a normal range of income and lump-sum
payments.
The maximum salary amount on which social insurance contributions
are estimated is set by the government, from
April 2009, is around EUR48,048.
| –
contributions by employer |
6.8%
|
| –
contributions by employee |
6.8% |
| –
self-employed contributions |
12.6% |
| –
employer's contribution to Redundancy
Fund and Industrial Training Fund |
1.2%
and 0.5% |
| –
employer's contribution to Holiday Fund |
8%
|
NB
The Defence Levy as such was abolished under
a new taxation package agreed by Parliament
in July, 2002, but various types of unearned
personal income are subject to a defence tax
between 3% and 15%.
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