We’ve created a sample checklist with the most important steps to take before launching your business in Cyprus: a) Decide on the aim of your business and its legal structure (e.g. limited liability company, partnership); b) Build a business model and a financial plan; c) Build your marketing strategy; d) Incorporate your business model, financial plan, marketing strategy and all other relevant information into your business plan; e) Identify financing resources and opportunities; f) Choose your premises (physical address); g) Choose a name for your entity; h) Incorporate as a legal entity; i) Register with the Tax Department; j) Register for VAT; k) Register for VIES (the VAT exemption when trading with other EU countries); l) Register at the Social Insurance Services; m) Register any intellectual property rights; n) Recruit your team of professionals; o) Start promoting your business.
Do you own a business and want to distinguish your products or services in the marketplace? The intellectual and industrial property portal provides information and advice on: the different types of trade marks, how to search for a trade mark, where to get professional advice, and the conditions your trade mark must meet in order to be registered and protected locally and abroad.
Having a digital presence is indispensable in business development. It allows you to sell products and services online, and promotes your brand internationally. If you want your business website to communicate that you are based in Cyprus, you can opt for a domain name ending in ‘.com.cy’. Domain name availability can be researched at the University of Cyprus’ website.
Once you have found a domain name that suits your business purposes you can register it here.
While some categories are liable for extra taxation, e.g. the sale of alcohol and tobacco products, the main categories of governmental taxes that apply across the board for businesses are: a) Income tax; b) Value Added Tax (VAT); c) Social Insurance contributions. More information about how to register for taxation can be found here
Certain business activities may conflict with legislation or regulations that are typically applied in the Cypriot market, or may cause risk to people’s lives or finances. These businesses require special licences and come under stricter regulatory controls. You can find a detailed list of licensing requirements for special business cases here.
Trading and selling common products, especially within EU, does not ordinarily require a special licence. However, certain goods and services traded with third countries outside of the EU may require special licences, and be liable for VAT, as well as customs fees. Find out more on this link.
Importing or exporting certain goods is prohibited or restricted under the law. Restrictions usually entail authorization or inspection from the relevant governmental department. Prohibitions and restrictions are put in place to protect society as well as the environment. They look to safeguard social ethics, order and security, to protect public health or the health of animals or plant-life, as well as industrial and commercial property, archaeological sites and cultural artifacts. At the link, you will find a non-exhaustive list of prohibited and restricted imports and exports. For further information, you can also contact Customs Headquarters at 22601679 & 22601652, or fax them at 22602769.
The type of entity you choose will be based on the nature of your business, the number and status of your business partners, and the types of relationships that connect your stakeholders. The Department of Registrar of Companies and Official Receiver provides more information about types of business entities.
Whether you’re pursuing national or international business activities, you must have a distinctive business name. To choose a name that will help with branding, but keep you compliant with regulations, check the restrictions at the link.
Before deciding on your business name for commercial use, it is important to search the government directory for already registered names.
Get started with the company registration process by following the steps at this link.
Business premises means any building or space that’s used for business activity (industry, commerce, exercise of a profession or any other income-earning activity). In order to use the premises for this purpose, you need to obtain a licence from the local municipal or community council. Physical or legal persons can obtain a licence for the operation of business premises, as long as the local municipal or community council provides the following:
If you choose to base your business in Cyprus, your company’s memorandum and articles of association must be drafted by a legal professional practicing in the Republic of Cyprus. The lawyer who does this must make a relevant statement in form ΗΕ1. The Cyprus Bar Association has a database of qualified lawyers and law firms that you may contact for advice and guidance. In the initial stages of setting up your business, you may also need to consult with other professionals or specialized organisations such as:
Intellectual property rights refer to the ownership of creations of the human mind, such as inventions, designs, distinctive symbols and artistic works. These rights can be held by natural as well as legal persons and are protected by national or European legislation, as well as international agreements. Intellectual property rights provide their holders the exclusive right of exploitation of their creation, as well as the right to take judicial and other measures for their protection in cases of unlawful / unauthorized copying or use by third parties. For more information refer to this link.
Protecting your enterprise’s intellectual property is key to safeguarding business profitability and development. Intellectual property rights include the right to exclusive commercial exploitation, the sale of your rights, licensing the use of your rights to third parties, as well as using your rights as security for obtaining financing. Read more about key types of intellectual property rights.
In order to choose the right form of protection for your intellectual property, please refer to the table here.
If you need professional advice related to the protection of your intellectual property rights (types, duration etc.), please follow the link and locate the relevant category of professional advisors.
Premises like an office or a shop – rented or bought – are an ideal space in which to carry out your business activities. Businesses can also launch operations from a residential property. Business owners have the right to register their home as a physical address whether they are self-employed or own a company. The premises can be used to conduct both online as well as offline business (requiring a physical presence). Setting up at home instead of a dedicated business space can however present challenges. There are certain types of businesses for which residential property is not suitable as a base for operations. For example, if you have a catering business (e.g. selling or serving food), you have to adhere to the hygiene and safety standards laid out by the Food (Control and Sale) Law of 1996 (54(I)/1996). You must also allow the authorities to enter your premises for ad hoc on-site inspections. Seeing as inspectors cannot enter people’s homes to carry out such inspections, catering businesses must operate in dedicated professional spaces.
Following global trends, online businesses have been growing exponentially in Cyprus. Businesses that operate in or through Cyprus often choose a ‘.com.cy’ domain name, even though they are not obliged to do so (see also "Find a website name ending with‘.com.cy’"). Online businesses should fully comply with e-commerce regulations, particularly the legal framework of the Electronic Commerce Law (L.156(I)/2004 and Amendment Law L.97(I)2007), which is currently being harmonized with the relevant EU Directive (2000/31/EC). The Consumer Protection Service advises traders on a range of matters including consumers rights. They can give you useful information about running your business and how to conduct online sales, including getting contracts in writing, giving customers the right to withdraw, delivering goods without undue delay, etc.
Cyprus does not yet have a specialized system for registering start-ups, so the normal rules and regulation for establishing a business apply. As a start-up entrepreneur, you can either register as self-employed or incorporate as a company with the Registrar of Companies. Most companies in Cyprus become limited liability companies (as marked by ‘Ltd’ at the end of the company name). These can become the owners of shares in Cyprus or abroad, i.e. holding companies. A company is considered a start-up in the first five years of its operation, after which it loses its eligibility to apply for any start-up related benefits such as grant schemes (see also "Start-up incubators’").
Registering as a self-employed professional is a much simpler and quicker process compared to incorporating your business as a company. The application form to register as self-employed (bilingual sample of YKA 1-008 for guidance here) can be submitted by hand/post at your local District Social Insurance Office. The application form should be accompanied by a copy of your ID card, passport or alien registration certificate (ARC). The social insurance number is usually given within 1-2 weeks of submission of the application. Self-employed professionals are liable to be taxed under three taxation categories:
a) Social insurance contributions