Establishing a business in Cyprus

Cyprus combines EU membership, English-language company law inherited from the UK, and a corporate tax rate that rose from 12.5 to 15 percent on 1 January 2026 under the tax reform. Company formation is fast but formal: a licensed Cyprus lawyer is involved by law, and you will use a lawyer, an accountant or an administrative service provider from day one. 1. Choose the legal form. Self-employed (sole trader). Register with the Tax Department for a tax identification number, with Social Insurance Services as self-employed, and, if you trade under a name other than your own, register the business name with the Registrar. Profits are taxed as personal income. Under the 2026 reform the tax-free band rose to 22,000 euros a year, then 20, 25, 30 and 35 percent bands up to and above 72,000 euros. You are personally liable. Private company limited by shares (Ltd). The standard vehicle. A separate legal person, at least one shareholder and one director (the same person is fine), a company secretary, and a registered office in Cyprus. No minimum share capital in practice; 1,000 euros is common. It pays corporate income tax at 15 percent on profits from 2026 (12.5 percent for profits up to the end of 2025). Partnerships and branches exist but are rarer for a new local business. 2. Register the company. Name approval first: an application to the Registrar of Companies (10 euros, or 30 euros accelerated) which takes a few days to two weeks. Then the incorporation file: the memorandum and articles of association, which must be prepared in Greek by a lawyer enrolled with the Cyprus Bar, and the HE1 statutory declaration, which only such a lawyer may sign, plus the HE2 (registered office) and HE3 (directors and secretary) forms. Registrar fees are about 165 euros for a company with share capital, plus 100 euros to expedite; processing takes about a week (two to three working days expedited). Realistically, from instruction to certificate of incorporation is three to five weeks including document gathering and know-your-customer checks. Because of the lawyer requirement you cannot self-file; budget for the lawyer's or service provider's fee on top. 3. Register for tax. Tax identification code (TIC): the company must register with the Tax Department through the Tax For All portal within 60 days of incorporation; there is no fee. Corporate income tax: 15 percent from 1 January 2026. Provisional tax is estimated and paid in two instalments during the year, with the balance and the return the following year. The deemed dividend distribution rules were abolished for profits earned from 2026 onwards. VAT: registration is compulsory once taxable turnover exceeds 15,600 euros in a 12-month period, or sooner for intra-EU acquisitions and certain services; voluntary registration is available below that. The standard rate is 19 percent, with reduced rates for hospitality, food and some services. Cyprus VAT returns are quarterly. Social insurance and GESY: register as an employer with Social Insurance Services before the first hire; employer and employee contributions plus the General Healthcare System (GESY) contribution are withheld and paid monthly. The self-employed pay their own contributions on notional income by profession. 4. Substance, office and bank account. A registered office in Cyprus is mandatory (a service provider's address is acceptable). Banks in Cyprus apply thorough compliance checks: expect to show the business plan, source of funds, beneficial owners' identities and, for non-residents, often a personal visit; several weeks is normal. Electronic money institutions are a faster alternative for early operations. If you want the company treated as Cyprus tax resident with confidence, keep management and control in Cyprus: local directors, board meetings held on the island, real decision-making there. 5. Licences and premises. Most trades need only the registrations above, but tourism and short-term rentals, restaurants and food, transport, construction, education, healthcare, investment and payment services, crypto-asset services and gaming are licensed by their regulators. Check with the relevant ministry or the Cyprus Securities and Exchange Commission before you commit to premises. 6. Annual obligations. The company files an annual return (HE32) with the Registrar with audited financial statements attached; Cyprus companies must have their accounts audited by a licensed auditor (the smallest companies, below the turnover and asset limits set in the Companies Law, may opt for a lighter review engagement instead), so an accounting firm is a fixed cost from the first year. The annual company levy of 350 euros was abolished from 2024. Corporate tax and VAT returns follow the calendar above. Beneficial ownership information is filed with the Registrar's register and must be kept current. 7. Non-residents and relocation. EU citizens can register and run a business in Cyprus freely; non-EU owners can own a company but need a permit to live and work in Cyprus, for which the business facilitation unit and the various residence routes apply. Individuals who become Cyprus tax residents without domicile there benefit from exemptions on dividends and interest for a number of years; take advice, because these rules were adjusted in the 2026 reform. What it costs to start, roughly: a self-employed registration, only your accountant; a Cyprus Ltd, 200 to 300 euros in Registrar fees plus the lawyer or provider fee for formation and the first year of registered office and secretary, then the annual audit. Providers commonly quote a package from around 1,500 euros for formation and the first year. Where to get help: the lawyers and accountants listed under this guide work with Cyprus start-ups; the Registrar of Companies, the Tax Department and Social Insurance Services publish their forms and fees online; the Cyprus Chamber of Commerce and Industry and the Point of Single Contact for services help with licensing questions. Figures checked September 2026. The 2026 tax reform changed several rates and thresholds and further amendments are expected; confirm the current position with a licensed professional in Cyprus before you rely on it.