Entrepreneurship in Cyprus is one of the most popular occupations at the moment.
It can be a good start for a brilliant career or a thriving business. Especially if you are 100% confident in your USP (Unique Selling Proposition), then this is the place for you.
It's no secret that Cyprus is rich in small and large private enterprises. The process of creating a company may seem easier than in many other countries, but here you can also find pitfalls. Before you create your own private enterprise, many questions may arise, the answers to which you can find in this article.
Why is it profitable for you to open a company in Cyprus?
Cyprus is famous, in comparison with other EU countries, for its low tax rate, complete confidentiality, good property price, stable and sustainable economy.
It became safer to start a business here after the latest events (2013 crisis and passport scandals). Banks have significantly improved their protection and benefits for the client, and the President of Cyprus Nicos Anastadiades gave in 2019 permission for the construction of luxury real estate and high-rise buildings in Cyprus.
Do I need to own property in Cyprus to open a company here?
Of course no. Any country is interested in profitable investments in their cultural and financial fund. Your company is a prospect and an opportunity. Who knows if you are the second Steve Jobs or Elon Musk? These are investments and interest, new professionals, money from other countries and the employment / training of locals, which increases the reputation and mentality of the country as a whole.
What if you need a company just to emigrate? Or if the company is passive? (The company is here, and you are in your home country)
Such actions are illegal in the Republic of Cyprus. You must register a company in Cyprus and reside here either as a citizen or with a work visa.
What is the best season to move?
You might think "What's the difference?" But this factor is also not unimportant. It is necessary to take into account many factors, ranging such as weather conditions and a sharp increase in the tourist flow, which is the main income for many local entrepreneurs.
The best time to move is mid to late spring and early summer.
Everything is perfect here: comfortable weather conditions conducive to moving and active arrival of tourists for the entire season, including autumn.
What is the best course of action: first buy property and then set up a company or first a business and then real estate?
This question can be answered as follows: if you already have a company and want to open a branch in Cyprus, then, of course, it is better to open a company and then buy real estate for private use. The same recommendation should be followed if you decide to start a business from scratch.
What to do if you are only at the very beginning of your journey?
So, you got the idea to open a company in Cyprus. Everything is ready, the plan is drawn up and scheduled, only a technical issue remains.
Whom you should contact:
- Lawyer. You shouldn't even start a business without their advice. A lawyer is needed to explain all the nuances for your safety, the safety of your company and support in all procedures.
- Real estate agent in Cyprus. You have to find a location that you are hardly able to find, especially if you are not familiar with the country. It is also advisable to conclude a contract with a company rather than with individuals to avoid fraud and illegal activities.
- Bank employee. A confidant to whom you can come on any issue.
- Accountant. The person who will provide you with the financial statement.
- Friends. Of course, if you have “your own people”, which is common in Cyprus, then everything is done much faster. This cult of "friendship-brotherhood" helps to create strong partnerships and or even a joint cooperation.
- Notary. You need a trusted person who checks all your documents for errors in filling out and points out important nuances.
It is also worth noting that if you want to buy real estate / open a company / invest in order to obtain citizenship, then due to recent events, from November 1, 2020, this is no longer possible.
The question may arise: what budget is required?
When opening a company, the start-up capital must be at least EUR 1 thousand (depending on your type of activity, the price can vary up to a maximum of 10 thousand euros, which happens in rare cases).
What it includes:
- the cost of renting a building / office for LLD
- various registration fees
- monthly expenses
- percentage of profit
- employee salary
- equipment suitable for your business.
Where and what documents should be sent?
Now step by step.
1. Collect a package of documents
- Personal data of the individual entrepreneur (there can be only 1).
- The name of the LTD and registration with a claim to the company rights.
- Personal data of employees and their salary (everyone must have a work visa! Without it, the employee's stay at the workplace becomes illegal, the company receives a 500 euros fine for each month of work (for each unregistered employee). The company may lose the license after such an incident.)
- Residentship in Cyprus.
- Accounting report (if the company is already registered).
- Start-up capital.
- Scope of the company.
- Company property address. Property can be bought or rented.
- License (if the business is licensed).
2. Register your company
Submit your application to the department of registrar of companies and official receiver website for review, where you will find 3 sections:
- Companies section (Department of registrar of companies and official receiver).
- Intellectual and industrial property section (Department of registrar of companies and official receiver).
- Insolvency service (Department of registrar of companies and official receiver).
Next, you must choose the scope of your company. Websites are in Greek but they are very easy to work with. Anyway it is advisable to perform all actions with your lawyer.
* all documents and payments are required if the company already existed.
3. Your representatives
One option may be to find professionals to represent you and your interests. You can contact both a company and an individual.
It is always safer to conclude an agreement with a registered company, but there are well-known specialists who already have brilliant recommendations. As a rule, there is always a long queue for such specialists and you have to wait several weeks, or even several months. All services and agreements are negotiated directly at a personal or via online meeting.
How much should you have for a start, including all costs?
Including all registration fees, salaries, start-up capital, private services, etc. you need about EUR 7-10 thousand (take into account that the average salary in Cyprus is about EUR 1-1.2 thousand). It is also recommended to have extra EUR 5 thousand or more in case of a dead season / crisis / lockdown in order to keep the company competitive and avoid ruin.
What taxes and pitfalls can be met on your way:
- VAT tax 19%
- stamp duty
- state duty.
These are the main taxes for individual entrepreneurs and private enterprises.
- A secretary must be a resident of Cyprus
- There can be only one CEO.
- You also need to very carefully check all documents and bills: what comes from where, because scammers can link their accounts to your company.
- You need to be careful when reading and signing contracts.
- Check agents / employees / partners for documents required for work.
- Pay all taxes on time.
- Do not take loans from banks unknown to you.
- Save all documents both electronically and on paper.
- Keep all receipts and receipts.
Your team. How to recruit a team and what is the starting salary?
The education system has been greatly shaken with the advent of the pandemic, and the selection of qualified employees has become much more difficult.
In this case, you should do the following:
- Bring your team with you (the process takes longer, but your people will be with you, especially if they are valuable employees).
- Announce recruitment for certain vacancies and launch advertising on social networks (now it is especially important as the whole world is working online and now spends 75% of their time on the Internet. The chances of being noticed are increasing significantly).
- Visit websites for job seekers.
- Try to find use friends, this can also be important in Cyprus, in the kingdom of word-of-mouth marketing.
How to get started during the coronavirus times in Cyprus?
Quarantine measures are drawing to a close and familiar realities are returning to us. Life, even if it is no longer the same, will still return to its usual pace. A huge number of people were trained at home during this time and only became stronger thanks to the surrounding events. More competitive experts are entering the market who will change the market and quickly gain experience.
New companies are always rising after big crises, because old ones fail and you are either keeping up with the times, or you are yesterday. Therefore, this is the best time for a new beginning, retraining, perfecting and honing your skills, learning a new profession and exploring a new market and demand for various kinds of products. In other words, we must not stand still, because the world is changing every year faster and more progressive.
Contact the specialists of the DOM real estate company in Cyprus, and the company's employees will help you with moving to the island, find housing and/or an office, and also provide you with competent lawyers.
- Apostille: legalization of your documents in Cyprus (link)
- Cyprus permanent residence (link)
- Tenancy agreement in Cyprus (link)
- Stamp Duty in Cyprus (link)
- How to get a title deed in Cyprus? (link)
- Property transfer TAX in Cyprus (Transfer Fee) (link)