How To Set Up a Business In Cyprus In 2025

Build your EU base on a sunny island with a low-tax, high-quality lifestyle.

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Introduction: Why Entrepreneurs Are Flocking to Cyprus

If you're looking for a strategic location to start or relocate your business in 2025, Cyprus checks a lot of boxes.

It’s in the European Union. It has one of the lowest corporate tax rates in the EU. The weather is Mediterranean bliss. The lifestyle is chill but connected. And if you structure things right, it can be incredibly tax-efficient — especially for consultants, freelancers, and digital entrepreneurs.

In this guide, I’ll walk you through everything you need to know to set up your own company in Cyprus — step-by-step, and updated for 2025.

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🧭 Agenda

Here’s what we’ll cover in this guide:

1. Why Choose Cyprus for Your Business?
   An overview of tax advantages, EU access, climate, and cost of living.

2. Legal Entity & Framework
   Everything you need to know about setting up a limited company as a foreigner.

3. Opening a Business Bank Account
   Navigating the most frustrating (but doable) step: banking in Cyprus.

4. Accounting, Tax & Compliance
   What you need to stay compliant, and how to plan for the new 15% corporate tax.

5. The Yellow Slip: EU Residency in Cyprus
   How to become an official resident and get your Registration Certificate.

6. Lifestyle & Long-Term Considerations
   What life is really like in Cyprus and what to consider beyond the setup.

7. Summary & Setup Checklist
   A clean, actionable recap of the entire process.

8. Estimated Setup Costs (2025)
   What to budget for if you want to set up the smart way.

9. Final Thoughts
   Wrapping up with a few reflections on building from Cyprus.

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1. Why Choose Cyprus for Your Business?

Cyprus has become a top pick for entrepreneurs looking to establish an EU base without the usual red tape, tax pressure, or high cost of living. It’s a unique blend of European compliance and non-European flexibility, which is rare to find.

The country offers a business-friendly tax system and a quality of life that rivals some of the most desirable places in Europe — but without the hefty price tag. And in 2025, it’s still holding its position as a smart jurisdiction for digital service providers, consultants, and location-independent founders.

Here’s why:

• 🇪🇺 EU Membership
  You get full access to the European single market — which helps with cross-border business, VAT compliance, and establishing credibility with clients.

• 💶 Low Corporate Tax
  Cyprus has long offered a 12.5% corporate tax rate — one of the lowest in the EU. As of 2025, this is expected to increase to 15% to align with global tax reforms under the OECD framework. Even with the increase, it remains highly competitive.

• 💸 Personal Tax Advantages
  You can pay yourself a tax-free salary of up to €19,500 per year, and if you're a non-domiciled resident, dividends are also tax-free — a huge plus if you're running a solo venture. However, it's important to note that such dividends are subject to a 2.65% contribution to the General Healthcare System (GeSY), capped on annual income up to €180,000.

• 🏖️ Mediterranean Lifestyle
  Think 300+ days of sunshine, walkable beach towns, a strong expat community, and excellent food. You get the feel of a relaxed island with the benefits of EU infrastructure.

• 💰 Affordable Living
  Cost of living is significantly lower than in places like Germany, France, or the Netherlands — and still offers a great standard of life.

In short, Cyprus lets you operate legitimately within the EU, optimize your tax exposure, and enjoy a better work-life balance — all from a sunny island that’s easy to fall in love with.

Now, let’s look at the setup of the legal entity in great detail, so you are prepared to take the steps.