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Setting Up a Sole Trader in Cyprus

Setting Up a Sole Trader in Cyprus

Updated on Monday 22nd May 2017

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Setting up a sole trader in Cyprus is the simplest form to start a business. Once an individual has obtained all necessary special permits and has informed the relevant authorities, he or she can start trading. It is quite simple to establish a sole proprietorship in Cyprus, but individuals deciding for this type of business must also know they will be held fully liable for the business’ debts. They should also take into consideration the Cypriot income tax that can reach 30% for individuals.

Our law firm in Cyprus can help you choose the right type of business taking into account all their advantages and disadvantages.

The legal framework for establishing a sole proprietorship in Cyprus

The Cypriot sole trader is subject to the same regulations as the partnership. The main legal framework regulating sole traders is the Partnership and Business Names Law in the Cypriot Commercial Code. Just like partnerships, sole traders must register with the Cypriot Companies Registrar. The registration must be completed before starting operating. It must be taken into consideration that registration with the Trade Register must be made by lawyers in Cyprus.

After the business name has been approved, which might take place within a week, and subject to the nature of the business, the relevant documentation – like the Memorandum – are filed, through our lawyers in Cyprus, to the Registrar of Companies. Our team of local solicitors can assist you to start doing business in maximum four working days, in some cases even less than that.

One of the greatest advantages individuals from EU and EFTA (European Free Trade Association) countries have when setting up a sole trader in Cyprus is that they do not required a work or residence permit. Non-EU/EFTA citizens, however, are required to apply for work and residence permits before coming to Cyprus

We invite businessmen to watch a short presentation on how to set up a sole trader in Cyprus

Opening a bank account in Cyprus

After having registered the sole trader and its opening with the relevant governmental bodies, you will be able to set up a bank account, which is effectuated in a rather simple procedure. The documents necessary to do that, although these may vary depending on each bank, usually are:
 
The incorporation certificate of the business;
A Memorandum copy and a copy of the Articles of Association, if applicable;
A proof of the registered address of the company.
 
In comparison with different offshore alternatives, opening a sole trader in Cyprus represents a quite straightforward procedure, although having a specialist working for you can make it ever easier and more rapid. Keep in mind that our team of Cypriot lawyers are here to assist you in every step of the way, making sure that your new business entity complies with all the rules and regulations imposed by the local legislation. 
 

Self-employment in Cyprus

Another form of having one’s own company is self-employment. Self-employment is used by small traders, among which sole traders and partnerships in Cyprus. Another category of self-employed individuals are freelancers, but unlike the others, freelancers can conclude contracts with Cypriot companies. Self-employed individuals and sole traders in Cyprus are allowed to use their name as a trade name. For sole traders and self-employed individuals there are no audit requirements if their annual turnover does not exceed 70,000 euros. However, they are required to register for taxation purposes and social insurance with the relevant authorities.

For complete details about all formalities that must be fulfilled for setting up a sole proprietorship you can contact our attorneys in Cyprus.

 

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