Cyprus for small business owners – expatriating in Cyprus
For many small business owners the idea of expatriating in a year long sunny island, just a few hours away by plane from the place you now call home, is immensely appealing: less punitive tax regimes, warmer climates and an improved quality of life being some of the more obvious attractions. But as alluring as the idea is, there a range of commonly held misconceptions that tend to put a lot of people off making their dream come true, such as (for example) expatriating and setting up a small business overseas is complicated; it's an option only for larger businesses and it's expensive and are just some of the perceived "problems".
So just how difficult it is for small business owners— or indeed a one-man-band — to start trading in the beautiful Mediterranean island of Cyprus? The answer is, it's not! Cyprus is open to businesses from all over the world and does as much as possible to keep the "red tape" to the absolute minimum. (NB Rather than doing it yourself, the quickest and most cost-effective option for the self-employed individual or for someone who wants to move an existing entity to Cyprus, is to seek specialist assistance and advice — more details can be found later in this article.)
So if the idea of moving and doing business in Cyprus, a small island with gorgeous beaches, year long sun and fantastic Mediterranean climate, appeals, here are some basic and hopefully illuminating facts for you to consider…
Expatriating in Cyprus - Permits and visas
Having decided to make the move , you don't require a work permit, residence permit or a visa, provided you' re a citizen of the European Economic Area — i.e. you're able to work in the same way as you would in your native country. Non-EU Citizens however must obtain both a work/residence permit prior to arrival in Cyprus. (Irrespective of your nationality, whether your skills or experience are in demand or not, is another matter!)
Getting started in Cyprus – Forming your own business
One of the most important points to note is that you can set up your own business in Cyprus following exactly the same simplified procedures as local companies do. In other words, you're not subject to any special conditions or penalised in any way by the authorities. The country is eager to attract entrepreneurs and new businesses to Cyprus to the extent, for example, that business owners are not required to have a local Cypriot partner and a company can be established without any minimum capital requirement. The minimum share capital of a Cyprus company is 1,000 Euros although the money does not have to be paid immediately into the company's bank account and can be paid up at a later time. Also keep in mind that there's nothing to stop you buying an established business. Moreover, as a freelancer or self-employed citizen of the EU you can come to Cyprus without any existing contracts and prospect for work, before actually setting up your own small business.
Any of the following are considered to be legal entities in Cyprus:
- Private and public company;
- Partnership (general and limited);
- European Company (SE);
- A branch of an overseas company, providing the branch has the same name as the parent company
The first and probably most important step…
If you have the time and the inclination you can of course adopt a do-it-yourself approach to setting up when expatriating in Cyprus. But for small business owners and the self employed a more sensible strategy is to call on the services of specialist local advisers. Delegating the task to people who know the country and the rules and regulations provides a number of advantages:
- it saves time and money
- you don't have to visit Cyprus in order to set up your business and
- it ensures that the business operates within the law.
Registering your business, registering your presence
Irrespective of how you choose to do it, when forming a new business in Cyprus, it is required to submit the entity's trading name to the Registrar of Companies. Once the name of the business has been approved — which can happen within one week — and depending on the nature of the entity, the relevant documents (such as the Memorandum and Articles of Association in the case of a limited company) are submitted, through a solicitor, to the Registrar of Companies. Although approval can take up to a month, with the right assistance everything can be in place and the business ready to start trading within four working days or even less.
Having registered the business and its existence with the authorities, it's then possible to open a bank account. Once again — and unlike many other countries — the business owner does not have to satisfy any unreasonable requirements or overcome unusual hurdles. Although some banks in Cyprus require more (or less) documentation than others, most will want to see the following:
- The company's certificate of incorporation
- A copy of the Memorandum and Articles of Association (or equivalent constitutional document)
- Proof of the company's registered address
Compared with other offshore options, expatriating and setting up in Cyprus is a relatively straightforward process although a large degree of specialist knowledge can make life a lot easier for small business owners. Registering your business's existence and making banking arrangements are two of the most important issues you'll need to address — there are of course a number of others. Remember that it's perfectly permissible to retain specialists who can handle the entire process for you. Furthermore, by taking advice from people who understand the country and the way things are done, your business will be up and running much sooner than it otherwise would be.