Opening a Business in CyprusUpdated on Tuesday 22nd September 2015
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How easy is it to set up a business in Cyprus?
Establishing a company is an easy thing to do in Cyprus. The Cypriot govern is helping the foreign investors in its attempt to attract foreign capital especially by using an advantageous tax system and low red tape.
The registration procedure doesn’t take longer than 10 days and the entrepreneurs are encouraged to open one of the types of business regulated by the Company Law: limited liability companies, public limited companies or company limited by guarantee or general and limited partnerships.
Setting up of a company in Cyprus must begin with choosing a proper, unique name that can be checked at the Registrar of Companies. The memorandum of association, notarized and elaborated by a lawyer must be deposit, along with the specific documents at the Companies Section of the Department of Registrar of Companies and Official Receiver. After registration, the Ministry of tax must provide a unique tax number and a VAT. The last step is registering at the Ministry of Labor for Social Contribution.
How easy is it to hire personnel in Cyprus?
An important advantage of owning a company in Cyprus is the highly educated work force, mostly English speaking.
The minimal working age is 15 years old.
The staff can be recruited from the numerous employment agencies. Also, the Cyprus Human Resource Management Association for information and the Cyprus Chamber of Commerce and Industry (KEBE) can provide information regarding hiring personnel.
The contract of employment can be with determined a period or an undetermined period. It must state the location of the company, details regarding the job, the start and end of the activities, details regarding the salary and other benefits. A collective agreement can also be signed and has duration of two years usually.
An employer can also hire personnel for a part time job, for a specific period of time or working from home. The working time cannot exceed 48 h a week and at least 11 hours of rest during 24h.
A series of benefits for the employees are granted. The sickness benefits are paid for a period of 156 days. All the unemployed can receive an unemployment benefit for a period of 156 days. The maternity allowance is paid for 18 months.
There are certain conditions that companies from Cyrpus should accomplish before hiring foreign staff: the company must be listed at a stock market and the direct shareholders must be registered at the Immigration Control Board and the Civil Registration Board, the capital sources must be transparent, must have an administrative office located in a proper district and the financial stability is proven by annual balance sheets.
A foreign employee must receive a resident permit before hiring. For this, he must submit the following documents at the Immigration dept at the local police: a tax for the permit, a CV, the passport, medical certificate and insurance, criminal record, the labor contract (must contain the duration of the contract and the salary), bank guarantee and two completed specific forms.
All EU citizens must be registered for taxes at the Department of Inland Revenue for receiving a taxpayer identification code.
Any working dispute is regulated by the Industrial Relations Code, except for the strikes, usually mediated by the Labor Ministry.
What are the main points of interest for foreign investors in Cyprus?
Cyprus is well known for the advantages offered to the investors, especially in the transportation areas. For example, the profits from the operations of the Cypriot vessels are not taxable. Also the dividends of the companies that own ship are exempt from tax.
Cyprus has an excellent infrastructure, with 2 international airports, 3 shipping ports (in Lemesos, Larnaca and Vasilikos) and a modern road network. This facilitates the export and import of the goods.
International and multinational companies and banks are operating in Cyprus attracted by the small operating costs, economic freedom and the well trained local companies, ready to counsel if necessary.
The pleasant weather, the culture and the Mediterranean cuisine are attracting tourist all year long.
What are the advantages of a holding company in Cyprus?
Cyprus is situated in the Mediterranean Sea, at the crossroads of Europe, Asia and Africa. Joining EU in 2004 bring major advantages to the foreign investors, such as allowing the foreign ownership of a company , increasing demand for property , signing different treaties in order to protect the interests of the entrepreneurs.
Also double tax treaties were signed with more than 40 countries, in order to avoid the double taxation of the incomes of the foreign companies.
Since 2008, Cyprus has joined the Economic and Monetary Union and as a result the exchange rate risks were eliminated and the monetary transparency took its place.
The tax corporate is the lowest from Europe, only 10% and this is encouraging more and more business man to open companies in Cyprus. Also the following are not taxable: dividends, dividend income, profits from overseas permanent establishment. No withholding taxes are applied to interest and royalties paid from Cyprus and dividends.
Considered one of the safest places to live in Europe, Cyprus attracts new investors every year. If you want to set up a company in ther European country, such as Malta, Russia or Latvia, you may contact our local lawyers or our local specialists in company formation.