The Government of Cyprus has approved significant revisions to the framework governing the registration and operation of Companies of Foreign Interests (formerly commonly referred to as BFU-registered companies).
On 27 October 2026, the Council of Ministers approved amendments aimed at strengthening compliance monitoring, promoting genuine economic activity in Cyprus and ensuring that registered companies make a meaningful contribution to the local economy.
The revised framework introduces important changes concerning the 70:30 employment ratio, annual employment reporting and the monitoring of companies registered under the scheme.
1. Extension of the 70:30 Employment Ratio Compliance Period to Seven Years
One of the most significant changes concerns the timeframe for assessing compliance with the 70:30 employment ratio.
Under the previous framework, Companies of Foreign Interests were expected to progressively achieve a workforce composition in which at least 30% of their total personnel consisted of Cypriot or other EU citizens, with the remaining proportion comprising third-country nationals, subject to the applicable requirements.
The previous policy provided for a five-year period, with the relevant employment ratio expected to be examined in connection with new employment applications after 2 January 2027.
Under the revised framework, compliance checks concerning the 70:30 employment ratio will take place seven years after the company’s registration in the relevant Register, instead of the previously envisaged five-year period.
Importantly, the Government’s announcement confirms that this revised timeframe will also apply to companies that are already registered.
This change provides existing companies with additional time to organise their workforce and work towards meeting the required employment ratio.
However, companies should not interpret the extension as an exemption from the employment requirements or as a reason to postpone workforce planning.
2. Mandatory Annual Employment Report from 1 January 2027
Although the compliance assessment period has been extended to seven years, companies will be subject to an additional reporting obligation.
From 1 January 2027, all companies falling within the revised framework will be required to submit an annual employment report.
This requirement is intended to enable the competent authorities to monitor the workforce composition of registered companies and assess their ongoing compliance with the applicable requirements.
Companies should therefore ensure that their employment records are accurate and up to date, including information concerning the number and status of their employees.
The annual reporting obligation is particularly important because it introduces a more structured monitoring process, even before the seven-year compliance assessment takes place.
3. What Does This Mean for Companies Already Registered?
The revised framework expressly provides that the seven-year compliance period will also apply to companies already registered in the Register.
For example, a company registered in the relevant Register in 2022 would, under the newly announced seven-year timeframe, reach its seven-year point in 2029.
Nevertheless, the precise application of the revised timeframe should be considered in light of the company’s actual registration date in the relevant Register and any further implementation guidance issued by the competent authorities.
It is also important to distinguish between the seven-year compliance assessment and the annual reporting obligation. Even where a company has additional time before its formal 70:30 compliance assessment, it will still be required to submit its annual employment report from 2027.
4. Other Changes to the Registration Framework
The revised framework also introduces a number of additional changes.
Renaming of the Register
The existing Register of Companies of Foreign Interests will be renamed the Business Service Center Register, reflecting the Government’s intention to place greater emphasis on the actual economic activity of registered businesses, irrespective of the origin of their capital.
Strengthened compliance monitoring
A clearer mechanism will be introduced for removing companies that fail to satisfy the applicable registration criteria or do not fulfil their obligations under the framework.
Changes concerning the citizenship of ultimate beneficial owners
The revised framework also provides for the retention of a company’s registration and the relevant employment-related benefits for existing and additional personnel where its ultimate beneficial owners acquire Cypriot or another EU citizenship, provided that the company continues to operate in eligible sectors and satisfies the applicable conditions.
New registration applications
According to the official announcement, registration applications submitted from 1 December 2026 onwards will be examined under the revised framework.
5. What Should Companies Do Now?
In view of these developments, Companies of Foreign Interests should begin preparing for the new reporting and compliance requirements well in advance.
We recommend that companies:
- Review their current workforce composition and calculate the proportion of Cypriot/EU and third-country national employees.
- Maintain accurate and updated employment records.
- Monitor changes in their workforce throughout the year.
- Prepare the information necessary for the annual employment report commencing on 1 January 2027.
- Review their employment and recruitment plans in order to progressively move towards the required 70:30 ratio.
- Seek professional advice where the company’s current workforce structure may affect future employment or residence permit applications.
It should also be noted that the revised seven-year assessment period and the existing Migration Department guidance concerning new employment applications from 2 January 2027 need to be considered together. Further clarification from the competent authorities will be important in determining how the revised framework will operate in practice, particularly in relation to new applications for the employment of third-country nationals during the transitional period.
How M.S. MyConsultancy Services Ltd Can Assist
At M.S. MyConsultancy Services Ltd, we assist companies operating in Cyprus with registration under the Companies of Foreign Interests framework and with their ongoing immigration and employment-related compliance obligations.
Our services include assistance with company registration, review of eligibility requirements, preparation and submission of supporting documentation, employment and residence permit applications for third-country nationals, and ongoing liaison with the competent authorities.
We also assist companies in reviewing their workforce structure and preparing for the upcoming reporting and compliance requirements.
If your company is registered as a Company of Foreign Interests in Cyprus, we recommend reviewing your current position ahead of the changes taking effect in 2027.
Contact our team for professional guidance and assistance.
Legal and regulatory note: This article is based on the official announcement published by the Business Support Center on 5 November 2026 concerning the Council of Ministers’ decision of 27 October 2026, together with the published Migration Department guidance. Further implementation instructions may clarify the calculation of the seven-year period and its interaction with the examination of new employment permit applications. This article is intended for general information and should not be treated as individual legal advice.
Published 6 November 2026. Immigration rules and thresholds change — if you are relying on anything here for a decision,check it with us first.