Advantages at a glance
- Tax advantages
- Access to the EU market
- Low cost of living
- High quality of life
- Easy company formation
- Language advantages
Indemnity Insurance Seal for your Principals
- Individual and comprehensive insurance protection
- High coverage sums for financial losses
- No-claims evidence going back five years
Work and Residence Permits
Residents of the European Union can work as freelancers in Cyprus practically without any problems. No special permit is required to enter the country. Only those who wish to stay must register within four months of arriving on the island.
This can be done with a MEU1 form (“Registration Certificate for EU Citizens”) at the Migration Office. If all is well with the registration, you will receive a residence permit.
The following documents are required for registration:
- a valid passport or identity card
- a rental contract or proof of ownership
- proof of sufficient financial means
- proof of health insurance
Citizens from outside the EU require a visa before entering the country. In order to be able to work there, freelancers need a work permit or a special residence status.
The visa can be applied for at the local consulate, which will also tell you which visa is the right one and which documents are required.
The following documents are usually requested:
- a valid passport
- a fully completed application form
- a passport photo
- proof of sufficient financial means
- proof of health insurance in Cyprus
Depending on the type of visa, further documents may be required, but these can be checked with the consulate. It is advisable to submit the application early, as the processing can take several weeks.
After approval, you can travel to Cyprus without any problems. The next step is to register with an immigration office or the Department of Civil Registry in Nicosia within 7 days. This step is necessary in order to apply for a residence or work permit.
As soon as the application is completed, you will receive a Temporary Residence and Employment Permit. It is valid for one year and can be extended annually.
These documents are required for the application:
- a valid passport
- the visa for entry
- proof of accommodation
- proof of health insurance
- proof of sufficient financial resources
- a completed application form (available online or from the authority)
- proof of freelance work (e.g. contracts with clients or a detailed description of the planned activities)
- a current criminal record certificate
- proof of payment of fees (usually between 250 and 350 euros)
Freelancing, Startup Culture, Founding a Company
Of course, you can't start working straight away; first you have to register as a freelancer with the Department of Registrar of Companies and Official Receiver (DCR). In order to be able to pay all mandatory tax duties, a tax identification number (TIC - Tax Identification Code for companies, TIN - Tax Identification Number as a single legal entity) must be applied for from the tax office.
It is also important to register with the Social Insurance Services in good time in order to be able to pay regular contributions.
This is all you really need to register as a freelancer.
It is advisable to familiarize yourself with the local work culture before starting out as a freelancer in Cyprus. Punctuality, respect, face-to-face meetings and more formal work attire are still highly valued by Cypriots.
The startup culture has grown considerably in recent years. Events such as startup weekends for networking and startup communities in coworking spaces are now part of everyday life.
Startups and freelancers who found startups can now benefit from initiatives and programs to promote them. Local organizations and the Cypriot government have developed accelerator and incubator programs and fundings. Cyprus is also a member of the EU, which means access to EU-wide startup fundings.
Setting up a company in Cyprus is relatively quick and easy, but there are a few formalities to consider. First of all, you should think about the type of company. As a freelancer, a sole proprietorship is an obvious choice, but a private limited company is also a form of company that can be considered.
The chosen company name can then be submitted to the Department of Registrar of Companies and Official Receiver (commercial register). Several proposals can be submitted to speed up the review and approval process. Freelancers may of course also propose their name as the company name.
A company established in Cyprus must be entered in the commercial register. Before this can happen, a Memorandum of Association and Articles of Association should first be drawn up and checked by a lawyer.
The certificate of incorporation will be issued within 5 to 7 days after the application has been reviewed.
The following documents are required for registration with the DCR:
- an application for registration
- the articles of association and memorandum and articles of association
- details of shareholders, directors and secretaries
- declaration of the company's registered office (at least a virtual address)
The most common company forms in Cyprus are as follows:
- Private Limited Company (Ltd): This is a limited liability company. There is no minimum capital requirement, which is why it is very easy to set up. Small and medium-sized companies use this form most frequently.
- Public Limited Company (PLC): This form is similar to the Ltd, but here the company shares can be publicly traded. There is a minimum requirement of seven shareholders and much stricter reporting requirements apply.
- General Partnership and Limited Partnership: These two forms are often used by smaller companies if they are managed by several partners. In a general partnership, all partners have unlimited liability. In a limited partnership, there are partners with limited and unlimited liability.
- Sole trader (sole proprietorship): The simplest form of company in which a single person manages the company. This form is particularly suitable for freelancers and the self-employed, but the individual is also personally liable for financial losses.
- Branch of a Foreign Company: Foreign companies can open a branch office on the island, which is not legally separate from the parent company but is subject to Cypriot regulations.
- International Trusts: This form is mainly used for asset protection and estate planning, as there are international tax planning advantages.
For start- up entrepreneurs: exali insures you as a freelancer in Cyprus with a 15% discount!
When you take out Professional Indemnity Insurance through exali, you benefit from a 15% discount in the first two years of insurance. This means you can take care of growing your business without having to constantly think about professional risks.
Tax Obligations
Generally speaking, Cyprus is a tax-friendly country, and freelancers and the self-employed in particular can benefit from various deductions and concessions. Nevertheless, some taxes must be paid.
Opening a Bank Account
Companies in Cyprus are obliged to open a company bank account. As a freelancer, it actually makes sense to open one, as it makes it easier to pay taxes and social security contributions, for example. Various local and foreign banks have branches in all Cypriot cities. In addition, there are hardly any restrictions on who can open an account in which bank. Freelancers therefore have no easy choice, as many banks offer similar services or offers.
Additional documents may be required to open a business account. It is advisable to obtain information about the exact documents directly from your chosen bank. This will simplify the already straightforward process even further.
If you want to open a Cypriot bank account, you will need the following documents:
- a valid passport, including a copy
- proof of residence
- the tax identification number (TIN)
- proof of income
- proof of employment status (for companies and self-employed persons)
- bank references, if applicable
- the respective opening form of the bank
- proof of the origin of the funds (source of funds), if applicable
- or a declaration of beneficial owner for business accounts
In some cases, freelancers may also need:
- valid visas or residence permits
- a confirmation of their activity or tax certificates
When choosing a bank, it is important to carefully check the fees for international transactions. Local banks may be less advantageous for internationally active freelancers. Digital banks, on the other hand, often offer more flexibility and lower fees.
Take out Professional Indemnity Insurance through exali now!
Freelancers and the self-employed in particular must expect high claims for damages from customers or clients in the event of professional errors and mishaps. To prevent these claims from threatening your own private finances or the liquidity of your company, it is particularly important to take out Professional Indemnity Insurance. Professional Indemnity Insurance should cover financial losses, property damage and personal injury as well as possible consequential losses (e.g. loss of turnover for your customers).
Professional Indemnity Insurance through exali covers precisely these risks reliably and worldwide. The only requirement for this is a place of business in the European Union. As a freelancer in Cyprus, you can therefore have all your professional risks insured without any problems! The experts from exali's customer service team will provide you with personal support in choosing the perfect cover for your company.
With exali, you'll get:
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