Notwithstanding specific circumstances of individuals and business activity, here are some points about business in Cyprus;

Limited Company v Sole Trader

It is not necessary to form a Cyprus Company in order to conduct business in Cyprus.
It is possible to can start, own or operate a business as an individual (sole trader) or a partnership.
The cost of forming a Cyprus Company is €1,200.
A Company can limit liability and provide tax advantages.
A Cyprus Company needs to be audited annually at additional cost.
It is a legal requirement that all businesses keep proper accounts.


Social Insurance Fund (S.I.)

Social Insurance contributions are due on salaries
If no salary is paid then no S.I. contributions are due
Standard S.I. payments include contributions to the following funds:
Social Insurance Fund (Half payable by employer, half payable by employee. Note: Many employers pay 100%)
Central Holiday Fund
Redundancy Fund
Human Resource Development Fund
Social Cohesion Fund
Total S.I. contributions are roughly equal to 19% of basic salary
S.I. is due monthly and can be paid via direct debit


Value Added Tax VAT

It is not necessary to register for VAT unless turnover exceeds €15,600.
The standard rate of VAT is 15%
If a VAT registered business purchases goods/services from an EU supplier outside Cyprus that is registered for VAT, VAT will not be added