How to Set Up an Entity in Cyprus

Establishing a legal entity in Cyprus offers appealing advantages for businesses expanding internationally. As an EU-member state within the Eurozone, Cyprus provides access to the broader European market, a favorable corporate tax environment, and a legally rooted English-law framework that international investors find familiar. At the same time, the process is streamlined relative to many jurisdictions, with an increasingly digital register and efficient filing systems.

However, there are important regulatory and administrative steps to manage: registration requires careful preparation of incorporation documents and compliance with beneficial-owner and tax obligations. Costs, banking set-up, payroll/social-security requirements, and ongoing reporting represent key considerations. On the benefit side, you gain limited liability, direct hiring flexibility, and the ability to integrate with local payroll and tax regimes.

Disclaimer: This content is for informational purposes only and does not constitute legal, tax, or financial advice. Always consult official sources before acting.

What does “opening an entity” mean in Cyprus?

In Cyprus, “opening an entity” typically means incorporating a locally registered company (most commonly a private limited company) with its own legal personality, registered office, and compliance obligations under Cypriot law. The entity may operate as a subsidiary of a foreign parent, a branch of a foreign company, or a locally-owned company, each with different implications.

Entity overview in Cyprus

Below is an overview of the key features of entity setup in Cyprus:

Step-by-step guide: How to open an entity in Cyprus

Step 1: Choose the right structure

For Cypriot entrepreneurs, the private limited liability company (Ltd) is also the most common business structure, valued for its flexibility, limited liability, and straightforward governance requirements. It’s suitable for small to medium-sized enterprises, professionals, and startups looking to formalize operations or attract investment.

For foreign investors, the Ltd remains the preferred choice when establishing a local presence, offering the same advantages—separate legal personality, limited liability, and full foreign ownership. Larger or publicly traded operations may opt for a public limited company (PLC) to facilitate fundraising or listing. Alternatively, a branch (place of business of an overseas company) allows foreign entities to operate locally while retaining the parent company structure abroad, though it offers less autonomy, and the parent remains liable for local obligations. In contrast, a locally incorporated company stands as an independent legal entity, giving full control over income, hiring, and operations.

Step 2: Verify business name availability

You should conduct a name search and reserve your proposed company name via the DRCIP’s online service. Naming restrictions apply: the name must not be identical or too similar to an existing registered entity, must not infringe trademarks, or suggest state-sponsored activity unless authorized. Reserve the name while preparing documents.

Step 3: Prepare incorporation documents

You will need to prepare the key documents, which may include:

• Statutory declaration by the lawyer (Form HE1) consenting to act as the company’s legal representative
• Notification of registered office address (Form HE2)
• Notification of first directors/secretary (Form HE3)
• Memorandum & Articles of Association (in Greek, and if applicable, certified translation into English or another language)
• (If accelerated registration is required) additional fees and optional forms for translations or public company status

Step 4: Register with DRCIP

Submit the incorporation application to the via online e-filing (or by hand/post). The portal is available through the DRCIP e-services. Following acceptance, you will receive a Certificate of Incorporation, company registration number, and tax registration details. The company’s details (directors, registered office, share capital) will be entered into the register.

Step 5: Register for tax and social security

Once incorporated, you must register the company for tax purposes with the Cyprus Tax Department (obtain a Tax Identification Number) and for VAT (if applicable) once you exceed the registration threshold. You must also register with the Social Insurance Services as an employer before hiring any staff.

Step 6: Open a corporate bank account

You should open a corporate bank account in Cyprus. The KYC process may require: certificate of incorporation, memorandum and articles, proof of directors and beneficial owners, business plan/file, proof of registered office, and deposit of initial funds. Some banks may require local presence or a director meeting. Local banking is not strictly mandatory for all operations, but is strongly recommended (and expected by regulators) for substance and audit purposes.

Step 7: Set up payroll and employment compliance

To hire employees, register as an employer with the Social Insurance Services, ensure employment contracts comply with Cyprus labor law, enroll employees in the General Healthcare System (GESY), and submit monthly payroll/social-security returns. Deduct employee contributions and pay employer contributions. Ensure all contracts, termination clauses, holiday/leave entitlements, and data-protection obligations are managed.

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Post-registration obligations

After incorporation in Cyprus, companies must remain compliant with several ongoing obligations:

• Tax and financial reporting: File the corporate income tax return annually (12.5% standard rate) with the Cyprus Tax Department. File VAT returns monthly/quarterly if registered. Financial statements must be prepared in accordance with International Financial Reporting Standards (IFRS) for public entities or Cyprus IFRS/ local GAAP for private companies, and annual returns must be filed with the DRCIP.
• Corporate registers: Maintain up-to-date records of directors, shareholders, and beneficial owners. Report changes to the DRCIP and file annual return (Form HE32) and financial accounts.
• Compliance tracking: Monitor deadlines for filings (annual return, financial statements, tax return) and use a compliance calendar or automated reminder system to avoid late-filing penalties.
• Licenses and renewals: If your business operates under specific licenses (financial services, telecommunications, import/export), ensure you renew them as required by the relevant ministry or regulator.
• Recordkeeping: Retain accounting, payroll, personnel, and transaction records for at least 6 years (commonly the period under audit review) in Cyprus.
• Employment law compliance: Adhere to labor, benefits, social security, and data-protection regulations. Ensure employment contracts, payroll reporting, and social-security contributions are kept up-to-date and compliant.

Taxes and financial considerations

Here are the key tax and financial obligations you should know when operating an entity in Cyprus:

• Corporate income tax: The standard rate is 12.5% on the taxable profits of Cyprus tax-resident companies.
• VAT/GST: The standard VAT rate is 19%. Reduced rates of 9% and 5% apply in specific cases, and a zero rate may apply to exports and intra-EU services. Registration for VAT is mandatory when turnover exceeds €15,600 in the previous 12 months.
• Payroll/social contributions: Employer contributions total 15.4% of an employee’s gross salary—8.8% to Social Insurance, 2% to the Social Cohesion Fund, 1.2% to the Redundancy Fund, 0.5% to the Human Resources Development Fund, and 2.9% to GESY (the national health system). Employees contribute 11.45%—8.8% to Social Insurance and 2.65% to GESY, while the state contributes 5.2%.
• Accounting standards: Companies prepare annual financial statements under IFRS (for public) or the Cyprus equivalent of IFRS/GAAP (for private). Audits are required for all companies in Cyprus.

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Expand internationally with Deel

Whether you’re hiring through an EOR or establishing your own local entity, Deel’s all-in-one platform gives you everything you need to expand into Cyprus—quickly, compliantly, and with confidence. From market entry to ongoing operations, Deel helps you hire, onboard, and manage teams seamlessly from day one.

With Deel, you can:

• Test new regions using Deel’s local entities through our Employer of Record service—hire employees compliantly, delegate payroll and taxes, and access localized employment contracts.
• Open entities with Deel Entity Setup, where our team manages everything—from incorporation and tax registration to coordination with local experts.
• Centralize your compliance and records with Deel Entity Management, including automated filings, calendar reminders, and visibility across all entities.
• Integrate with Deel Payroll and Deel HR for compliant payments, benefits, and workforce oversight—all in one platform.

For companies transitioning from the EOR model to owned entities, Deel ensures a smooth handover and consistent compliance every step of the way. Enter new markets, onboard talent, and manage your global workforce—all through one unified platform.

FAQs

How long does it take to open an entity in Cyprus?
Typically, 1–3 weeks from name approval to certificate issuance, depending on document preparation, board decisions, and banking set-up.

What is the minimum capital required?
There is no strict minimum capital requirement for many private limited companies. Often, companies start with a share capital of €1,000 (≈ $1,080 USD), though technically a nominal amount such as €1 may suffice depending on structuring.

Can foreign companies own 100 % of an entity in Cyprus?
Yes, Cyprus allows 100% foreign ownership of companies. There is no requirement for a local shareholder.

Do I need a local director or representative?
There is no mandatory requirement for a Cyprus-resident director for company incorporation; however, to benefit from Cyprus tax residency and treaty access, it is common to have at least one director resident in Cyprus and to hold board meetings in Cyprus.

How much does it cost to register an entity?
Incorporation fees start from approximately €165 (≈ USD $180) for a standard procedure. Additional costs may apply for translations, accelerated filing (€100), or public company registration.

Can I hire employees before the entity is fully registered?
Typically, no: you should register the company, obtain tax/insurer numbers, and register as an employer before hiring. However, to start immediately, you may use Deel’s Employer of Record (EOR) model while your entity is being set up.

Can Deel help me open an entity in Cyprus?
Yes. Deel Entity Setup manages the end-to-end process — from registration to payroll compliance — in over 100 countries, including Cyprus.

Does Deel offer ongoing compliance and payroll support?

Yes. Deel offers both managed services and self-service tools to help you stay compliant.

If you’re using Deel Entity Management, Maintenance, EOR, or Payroll, our team handles payroll, benefits, filings, and compliance obligations on your behalf.

For teams managing their own entities, Deel Compliance Hub makes staying compliant simple by providing real-time regulatory updates, risk alerts, and workforce insights across 150+ countries. Proactively manage compliance with our Compliance Monitor, Workforce Insights, and an AI-powered Worker Classifier, staying ahead of changing employment laws.

Can I switch from Deel EOR to my own entity later?
Yes. Deel supports seamless transitions when you’re ready.