Labour Force skilled & flexible

Cyprus has a well-trained and versatile labour force. Qualified professional, technical and clerical staff, with wide experience and fluency in English and other languages are available for employment at reasonable remuneration.

According to Eurostat's Labour Force Survey, Cyprus has an employment rate of 68,5% (2005) for the age group 15-64; which is the highest among the 10 new EU member states and above the average employment rate of the EU15 (65,2%). This positions Cyprus in line with the EU's Lisbon target of 70% by 2010. Moreover, Cyprus has a high employment rate for women of 58,4%, compared with the EU average of 56,3%.

Cyprus offers a well-educated, multilingual workforce; whereas, labour costs are significantly lower compared to the European Union average.

Education and Skills

Cyprus ranks among the first countries in the world in terms of university degree holders in relation to the population, with 75% of secondary school leavers in 2005 continuing their studies. About half of secondary education graduates study abroad, mainly in Greece, the UK and the USA.

The high educational level of the population is evidenced by the fact that Cyprus exhibits the highest percentage among the EU of people between the ages 25-35 possessing tertiary education qualifications.

Moreover, the importance given to education is underlined by the high percentage of public expenditure on education in relation to GDP (7,36% for 2003), which is far above the European Union’s average (5,22%) and positions Cyprus among the top European countries.

Labour Costs

Labour costs are significantly lower compared to the EU average. There is no national minimum wage for almost all occupations. Legislation though provides for a uniform minimum wage for certain occupations: clerical workers, sales staff and shop assistants, auxiliary healthcare staff, auxiliary staff in creches, nurseries, and schools. The minimum wage on recruitment for the above occupations for 2006 is C£384, while that for staff completing six consecutive months of employment with the same employer is set to C£408.

Terms and conditions of employment are negotiated either directly between the employer and the employee or through collective bargaining between trade unions and employers' organisations. The number of man-days lost to strikes each year (an average of 1,51 per 100.000 man-days for 2005) is low by international comparisons. Added to this is the fact that Cypriots are hard working, adaptable and honest. Interpol statistics reveal that in 2004 the number of serious crimes was 1.033 per 100.000 population, far below the corresponding figure for the European Union. The Cyprus labour market has a tradition of social dialogue and a well-developed institution of free collective bargaining. Approximately 65-68% of the labour force is unionised and 70% is covered by collective agreements. Collective agreements regulate employment conditions such as remuneration, working hours, health and safety, annual holidays and provident fund.

for further info: www.mlsi.gov.cy/dlr

Perhaps the greatest asset of Cyprus is its people: a source of strength, offering the foreign investor a rich pool of knowledge and expertise of the highest quality

Social Insurance

The Social Insurance Scheme covers compulsorily all persons gainfully occupied in Cyprus, either as employed or self-employed. The Scheme is financed by contributions paid by the employers, the insured persons and the State. In the case of employed persons, the contribution is 16,6% of their ‘insurable earnings’ and is shared amongst the employer, the employee and the State, in the proportion of 6,3%, 6,3% and 4% respectively. In the case of self-employed persons, the contribution is 15,6% of the ‘insurable income’, out of which 11,6% is paid by the self-employed and 4% by the State. The Social Insurance Scheme provides cash benefits for marriage, maternity, sickness, unemployment, widowhood,invalidity, orphanhood, old age, death and employment injury. As of 1 May 2004 EU Regulation (EC 1408/71), which coordinates the Social Security Systems between member states, applies.

for further info:www.mlsi.gov.cy/sid

"Cyprus offers a strategic location, favourable tax environment, educated work force, excellent telecommunications and modern banking and legal infrastructure which makes the country the perfect business bridge for the European Union and the Middle East."
The Wall Street Journal - May 5, 2004

Other Costs

Employers are also obliged to contribute 1,2% to the Redundancy Fund, 0,5% to the Human Resources Development Fund and 2% to the Social Cohesion Fund.

Employment Termination

The Termination of Employment legislation covers all employees in the public and private sectors, including apprentices. It also covers shareholders of private companies employed by their company. An employer who intends to terminate the employment of an employee after a period of at least 26 weeks, should give a minimum period of notice of 1 to 8 weeks depending on the employee's length of employment. In the event of redundancy, employees who have been continuously employed for 104 weeks by the same employer, are entitled to redundancy payment from the Redundancy Fund. An employee who is dismissed unlawfully has the right to compensation payable by the employer, provided that the employee has been continuously employed for not less than 26 weeks. In the event of insolvency of the employer, the Law allows for the payment of wages / salaries and annual leave from a special fund to all employees.

Residence & Work Permits

For Business Companies (BCs) the Civil Registry and Migration Department is the authority responsible for the first issue and subsequent renewal of residence permits granted to all non-Cypriots employed by BCs in Cyprus. The Civil Registry and Migration Department acts in consultation with other competent authorities such as the Registrar of Companies, the Labour Department and the Cyprus Police.

An application⁶ should be submitted by both, third country nationals as well as EU nationals. In the case of executives, the application is submitted to the Civil Registry and Migration Department. For non-executives the application is submitted to the District Aliens and Immigration Branch of the Police. For third country nationals the application must be accompanied by a contract of employment stamped by the Labour Office.

for further info: www.moi.gov.cy
www.mlsi.gov.cy/dl

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