Starting a Business in Cyprus: An Expat’s Guide

Published on September 30, 2025 and written by Cyril Jarnias

Entrepreneurship abroad is an exciting adventure that offers numerous opportunities, particularly in Cyprus. This comprehensive guide will walk you through the essential steps to establish your business on this Mediterranean island as an expatriate. We will cover the legal, administrative, tax, and cultural aspects to consider for successfully launching your entrepreneurial venture in Cyprus.

Why Choose Cyprus to Start Your Business?

Cyprus has become a top destination for international entrepreneurs, thanks to several major advantages:

An attractive tax environment: Cyprus offers one of the lowest corporate tax rates in the European Union, at just 12.5%. Additionally, the country provides numerous tax benefits for businesses and individuals, including exemptions on dividends and capital gains.

A strategic location: Situated at the crossroads of Europe, Africa, and the Middle East, Cyprus offers privileged access to these rapidly growing markets.

A favorable regulatory framework: The country has implemented simplified procedures for business creation and provides a stable, transparent legal environment.

A high quality of life: With its Mediterranean climate, beautiful beaches, and relatively affordable cost of living, Cyprus offers a pleasant living environment for expatriate entrepreneurs.

Available Legal Structures in Cyprus

Before embarking on creating your business in Cyprus, it’s crucial to understand the different legal forms available. Here are the main options:

Limited Liability Company (Ltd)

This is the most common legal form for foreign businesses in Cyprus. It offers limited liability to shareholders and great flexibility in management.

• Minimum share capital: 1,000 euros
• At least one shareholder and one director
• Possibility of having a single shareholder
• Requirement to maintain accounting records and file annual accounts

Branch of a Foreign Company

This option allows a foreign company to establish a presence in Cyprus without creating a separate legal entity.

• Simplified registration process
• No minimum capital required
• Possibility to repatriate profits to the parent company

Representative Office

Ideal for companies looking to explore the Cypriot market without engaging in direct commercial activities.

• Activities limited to promotion and representation
• No taxation in Cyprus on income
• Simplified registration procedure

Key Steps to Create Your Business in Cyprus

Establishing a business in Cyprus follows a well-defined process. Here are the main steps to follow:

1. Choose a Business Name

Start by checking the availability of your business name with the Cyprus Companies Registry. The name must be unique and not too similar to an existing company.

2. Prepare the Incorporation Documents

You will need to draft your company’s articles of association, which define its structure, operation, and objectives. These documents must be in Greek or English.

3. Open a Bank Account

It is necessary to open a bank account in Cyprus to deposit your company’s share capital. The country’s main banks offer services tailored to foreign businesses.

4. Register with the Companies Registry

This step involves submitting all required documents, including the articles of association, information on directors and shareholders, and proof of capital deposit.

5. Obtain a VAT Number

If your business is subject to VAT, you will need to register with the Cyprus Tax Department.

6. Register for Social Security

You will need to register your business and employees with the Cypriot social security system.

Timelines and costs: The business creation process in Cyprus can take between 2 and 4 weeks. Costs vary depending on the chosen structure and professional services used, but budget an average of 1,500 to 3,000 euros for a limited liability company.

Tax Considerations for Expatriate Entrepreneurs in Cyprus

The Cypriot tax system is one of the most attractive in Europe, but it’s important to understand its specifics to make the most of it.

Corporate Tax

The corporate tax rate in Cyprus is 12.5%, one of the lowest in the European Union. Additionally, many exemptions and deductions are available, including:

• Exemption on dividends received
• Exemption on capital gains from the sale of shares and securities
• Deductions for research and development expenses

Personal Income Tax

For expatriate entrepreneurs, the personal tax regime is also advantageous:

• Progressive tax rates ranging from 0% to 35%
• 50% exemption on salary for new residents earning over 100,000 euros per year
• No wealth tax

VAT

The standard VAT rate in Cyprus is 19%, with reduced rates for certain goods and services.

Tax treaties: Cyprus has signed double taxation agreements with many countries, which can be particularly beneficial for international entrepreneurs.

Funding and Support for Expatriate Entrepreneurs in Cyprus

Cyprus offers various funding and support options for expatriate entrepreneurs:

Government Funding Programs

The Cypriot government offers several grant programs and low-interest loans for startups and SMEs, particularly in innovation and technology sectors.

Incubators and Accelerators

Cyprus has several incubators and accelerators that offer valuable support to expatriate entrepreneurs:

• IDEA Innovation Center: A startup accelerator based in Nicosia
• Chrysalis LEAP: Specialized in clean technologies and the circular economy
• Cyprus Business Angels Network: A network of private investors for early-stage startups

Banks and Private Investors

Major Cypriot banks offer financing products tailored to foreign businesses. Additionally, the island is attracting more private investors and venture capital funds interested in local opportunities.

Advice: Prepare a solid and detailed business plan in English to increase your chances of securing funding.

Understanding Business Culture in Cyprus

To succeed as an expatriate entrepreneur in Cyprus, it’s essential to understand and adapt to the local business culture:

Personal Relationships

Cypriots place great importance on personal relationships in business. Taking the time to build trust with your partners and clients is crucial.

Hierarchy and Respect

Hierarchical structure is generally respected in Cypriot companies. Address people by their title and last name until invited to do otherwise.

Time Flexibility

Although Cypriots are generally punctual for business appointments, it’s common for meetings to start a bit late. Show patience and flexibility.

Negotiations

Negotiations can take time in Cyprus. Decisions are often made by consensus, which can lengthen the process.

Language: Although Greek is the official language, English is widely spoken in the business world in Cyprus, which facilitates the integration of expatriate entrepreneurs.

Challenges and Opportunities for Expatriate Entrepreneurs in Cyprus

Like any entrepreneurship project abroad, starting a business in Cyprus presents both unique challenges and opportunities.

Potential Challenges

• Bureaucracy: Although the business creation process is relatively simple, some administrative procedures can be lengthy.
• Limited market: With a population of about 1.2 million, the domestic Cypriot market is relatively small. It’s often necessary to target international markets from the start.
• Cost of living: Some areas, particularly major cities and beach resorts, can have a high cost of living.

Opportunities to Seize

• Growing sectors: Tourism, information technology, renewable energy, and financial services offer numerous opportunities.
• Regional hub: Cyprus’s strategic position makes it an excellent starting point for developing activities in the Mediterranean region and the Middle East.
• Quality of life: The pleasant climate, safety, and quality healthcare system make Cyprus an attractive place to live for expatriate entrepreneurs.

Advice: Conduct thorough market research and identify specific niches where your expertise as an expatriate can bring unique added value.

Useful Resources for Expatriate Entrepreneurs in Cyprus

To assist you in your entrepreneurial journey in Cyprus, here are some essential resources:

Official Organizations

• Ministry of Energy, Commerce and Industry: Information on business regulations and support programs
• Cyprus Companies Registry: For business registration
• Tax Department: Information on corporate and personal taxation

Professional Associations

• Cyprus Chamber of Commerce and Industry: Business network and support services for companies
• Cyprus International Businesses Association: Association representing the interests of international businesses in Cyprus

Expatriate Communities

• InterNations Cyprus: Social network for expatriates offering networking opportunities
• Expat.com Cyprus: Forum and resources for expatriates living in Cyprus

Starting your business in Cyprus as an expatriate is a stimulating adventure that offers numerous opportunities. With its attractive tax environment, strategic location, and high quality of life, the Mediterranean island is attracting more and more international entrepreneurs. By following the steps detailed in this guide, understanding local specifics, and leveraging available resources, you will be well-equipped to succeed in your entrepreneurial project in Cyprus.

Remember that every entrepreneurial journey is unique. Take the time to prepare well, surround yourself with the right experts, and immerse yourself in the local culture. With perseverance, flexibility, and a clear vision, your business in Cyprus has every chance to prosper and thrive on the international stage.