Legal services and legal protection of business in Cyprus - COREDO

Legal services and legal protection of business in Cyprus

The Republic of Cyprus is known for its open economy based on the principles of free enterprise. The division of the island into Greek and Turkish parts has a significant influence on the economic situation. The economy of the Greek sector is in better condition, although it is highly exposed to external factors. Cyprus has been a member of the European Union since 2004, and the euro has become the official currency here since 2008. It is noteworthy that up to 80% of the Republic’s GDP is composed of services and tourism. The mining industry, agriculture, and machine building are also important contributors to the economy. The banking and IT sectors are well-developed on the island. Cyprus is an exceptionally attractive jurisdiction for foreign investments, with a volume amounting to 375 billion euros in 2021, according to the Central Bank of the Republic. Generally, foreign businessmen do not encounter special difficulties when registering and conducting business in Cyprus. However, the language barrier and local bureaucracy can pose challenges and complicate their activities.


The government of the island republic provides comprehensive support to the private sector, much effort is made to maintain macroeconomic stability and a favourable business climate. Cyprus offers excellent conditions for the development of start-ups (especially in the field of innovation and digital technologies). According to the Global Startup Ecosystem Index 2022 by StartupBlink, three Cypriot cities – Pathos, Limassol, and Nicosia – were included in the TOP 1000 best cities in the world for basing startups. Moreover, Cyprus continues to be an important international financial hub, mainly because of its favourable geographical position and relatively mild tax climate.


The taxation conditions in Cyprus are among the most attractive in the EU. In 2023, the corporate tax rate is only 12.5%, and many companies can claim significant tax incentives (for example, income tax can be reduced to 2.5% under certain conditions). Income from dividends and income from operations with securities are not taxed. Additional benefits have been introduced in Cyprus since the summer of 2022, aimed at reducing the amount of tax on the income of non-resident individuals by 20% and 50% (the actual benefit amount depends on several factors). The standard VAT rate is 19%, but for some activities, it may be lower or even zero.


Some types of economic activity in Cyprus require a state licence. These include finance and banking, construction, transportation, medical services, gambling, etc. Obtaining a permit takes about 7–10 days usually, but if the company plans to engage in banking or insurance activity, the licensing process may take longer.


According to the local laws, all companies registered in Cyprus are required to submit data on financial activities by filling in the HE32 report. These documents are submitted to the registration chamber of the Republic and have been required to be published since 2003. Companies Act, the Income Tax Act, and other legal acts govern the reporting process. Companies must submit their first reports no later than 18 months after registration, and subsequent reports are to be submitted annually within 2 months after the shareholders’ meeting. Even companies that do not carry out economic activities are still required to submit reports. Since 2014, a legal requirement has been introduced in Cyprus stating that companies, failing to file tax returns within the specified time limits, must be forcibly liquidated, and their management may be subject to liability, including criminal liability.


COREDO provides a full range of legal services, due to which business activities in Cyprus will be as simple as possible. We offer:

  • assistance in registering a company in Cyprus;
  • development and analysis of various agreements and contracts;
  • assistance in obtaining licences and permits;
  • legal support of the companies’ activities;
  • conducting financial, tax, and legal due diligence;
  • representation of the companies’ interests in various official bodies, and much more.

COREDO specialists are always ready to answer any questions and help to find a way out of the most difficult and confusing situations.


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