Cyprus is an EU member state which stands as the third-largest and populous island in the Eastern Mediterranean. If you have been prospecting on starting a business, this might be a perfect location.
While you exploit the country’s abundant resources, you will also have untethered access to both its local and EU regional markets.
Where to Begin, and Who Can Operate a Business in Cyprus?
To get started, you need to have a proper plan and sufficient capital for your business. And also, you should have valid documentation for the registration processes.
In case you’re wondering, who can open a business in Cyprus? Virtually everyone can, both locals and foreigners. If it happens that you’re a foreigner who is also an EU citizen, you have an added advantage.
EU citizens are not subject to any restrictions except in the financial services business. In other business areas, you can get registered without a minimum investment requirement. And also, you can incorporate a company in the absence of a local Cypriot partner.
Businesses Can You Start in Cyprus
In Cyprus, you can open either a sole proprietorship, partnership or limited liability company. The business form and size always depend on your capital and interests.
The major business ventures you can try as a foreigner are leisure & catering, and property & development businesses. Inside these categories, you can choose to run a holiday accomodation, villas, restaurant, property agency, sports center, translation bureaux, and language school, etc.
To start any of these businesses, you need to have enough capital that will survive up until when the business begins its operations.
If you do not have enough money and would like to take a loan for the incorporation of your business, you should have a well-laid out plan of how you will pay back the money. It’s also important to consider the currency that you need to use.
Cypriot banks are generally conservative and extremely cautious when financing start-ups run by foreigners. Thus, you have to be organized.
Requirements for Starting a Business in Cyprus
The first thing if you want to start a business in Cyprus is to choose the business structure, you’re interested in. This will help you to gather proper documentation required for the registration of that specific form of business.
Although the requirements may differ depending on the business form you choose, here are some of the common things that may be expected:
- A registered name of the company that’s reserved online;
- A legal/ registered address of the company (even if it’s a virtual office);
- Taxation registration for the purpose of employment;
- Special licenses and permits from the government of Cyprus;
The Types of Companies in Cyprus
The Limited Liability Company (LLC) is the most common business form all over the world. However, you can find more than this business type in Cyprus. You can also set up a sole proprietorship, and a partnership business form in the country.
The sole proprietorship is owned by a single individual who takes all the liabilities and responsibilities of the company. The partnership is formed by more than 2 individuals and, depending on the arrangement, it can be a general, limited or limited liability partnership.
Why Cyprus Makes a Perfect Business Destination
- After Cyprus joined the Economic Union in 2008, exchange rate risks were eradicated. Now there is a transparent monetary system.
- Concerning taxation, Cyprus signed over 40 double taxation treaties with several countries. Double taxation treaties prevent the double taxation of foreign owned businesses in Cyprus.
Additional factors are:
- High availability of shelf companies for purchase;
- Lower corporate tax rate of 12.5%;
- 0% tax charged on dividends (paid by Cyprus companies to foreign shareholders);
- 0% tax charged on dividends that come from affiliate companies outside Cyprus;
- 0% tax charged on profits that are made from own shares, shares from other businesses or securities;
- Absence of exchange controls, thin capitalization rules, and capital gains tax (save for real estate);
- 0% tax charged on outbound interests, dividends, and royalties.
Cyprus is a land of many business opportunities. In addition to the mentioned leisure and catering business, you can venture into transportation business, tourism, and shipping industries, etc. To get further and detailed information of how you can start your business in the country, you can inquire from lawyers in the country.