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.

Apr 12, 2025

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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.

7 reasons to go to Cyprus instead of the Greek Islands | escape.com.au

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.

🧭 Agenda

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

Why Choose Cyprus for Your Business?
An overview of tax advantages, EU access, climate, and cost of living.
Legal Entity & Framework
Everything you need to know about setting up a limited company as a foreigner.
Opening a Business Bank Account
Navigating the most frustrating (but doable) step: banking in Cyprus.
Accounting, Tax & Compliance
What you need to stay compliant, and how to plan for the new 15% corporate tax.
The Yellow Slip: EU Residency in Cyprus
How to become an official resident and get your Registration Certificate.
Lifestyle & Long-Term Considerations
What life is really like in Cyprus and what to consider beyond the setup.
Summary & Setup Checklist
A clean, actionable recap of the entire process.
Estimated Setup Costs (2025)
What to budget for if you want to set up the smart way.
Final Thoughts
Wrapping up with a few reflections on building from Cyprus.

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.

2. Legal Entity & Framework

Setting up a business in Cyprus is relatively straightforward — especially if you go with the most common legal structure: the Limited Company (LTD).

It’s the go-to option for entrepreneurs, consultants, and small teams. It offers full foreign ownership, limited liability, and access to the EU market — without requiring a local partner or complicated red tape.

Here’s how it works:

📄 Legal Structure
You’ll be registering a Private Company Limited by Shares (LTD). This means your personal assets are protected, and the company is a separate legal entity.
🌍 Full Foreign Ownership
You don’t need a Cypriot shareholder or director. You can be the sole owner, director, and employee.
📍 Registered Address
Your company must have a legal address in Cyprus. This can be your residential address or a virtual office, which is often more flexible if you move around.
📝 Required Documents
To get started, your lawyer will need:
- A copy of your passport
- A signed 12-month lease agreement
- Three name suggestions for your company (ranked)
📑 Incorporation Timeline
The process typically takes 2–5 weeks, depending on the season (expect delays in summer when half the island goes on vacation).
💼 Virtual Office Option
I personally chose a virtual office for my corporate address — it's easier if you ever decide to move apartments or switch cities.
💰 Cost
Expect to pay around €1,200 – €3,000 total for legal fees and registration, depending on your lawyer and whether you use nominee services (optional, often used for privacy or admin help).

Once registered, your LTD is fully functional and can start issuing invoices, opening bank accounts, and signing contracts.

If you need a recommendation for someone you can trust on the island, text me.

3. Opening a Business Bank Account

Navigating the most frustrating (but doable) step: banking in Cyprus.

This is the part where most people get stuck. Not because it’s impossible — just because it takes patience, preparation, and a healthy amount of paperwork.

In recent years, due to increased global regulation and a history of sketchy offshore activity, banks and fintechs in Cyprus have become extremely strict with KYC (Know Your Customer) procedures. But if you’re well-prepared, you can speed things up significantly.

🔍 What Banks Will Ask You

📁 Company Incorporation Documents — ideally in one clean PDF that includes your Certificate of Incorporation, Articles of Association, and shareholder details.
🛂 High-resolution copy of your passport — make sure it’s not cropped or blurry, and ideally scanned in color.
🧾 Utility bill in your name — from your Cyprus address; electricity, water, or internet usually works best.
📜 Lease agreement (12-month minimum) — this proves your physical presence in Cyprus and is often cross-checked with your utility bill.
💼 Detailed business description — explain what your company does, how you generate revenue, and who your typical clients are.
🌐 Links to your website, LinkedIn, Instagram, client sites, etc. — this helps validate that your business is legitimate and active.
📊 Simple financial forecast or earnings estimate — even a rough Excel sheet showing expected monthly income and expenses adds credibility.
🧑‍💻 Your CV or LinkedIn profile — banks want to see your background and how it connects to the business you’ve just started.
📞 Phone number + offer to clarify anything by call — this adds a human touch and shows you’re open to quick follow-ups if needed.

⚠️ Disclaimer:
If you go through all the effort of preparing every single document on this list and your bank only asks for half of it... don’t get mad at me.

Banks in Cyprus — especially when dealing with LTDs — are like a box of chocolates: you never quite know what you're going to get. Some are chill, others are intense. Being overprepared just gives you the upper hand, no matter who you’re dealing with.

Pro tip: Don’t wait for them to ask. Put all of the above into a single, easy-to-read email with bullet points and bolded headers. Make their job easy — and they’ll make yours easier too.

🏛️ Traditional Banks vs. Fintechs

You have two options for where to open your business account:

🏛️ Local Banks
- e.g. Bank of Cyprus, Hellenic Bank
- Can be more difficult to onboard with
- Slower systems but more “official” presence
📱 Fintechs
- e.g. Intergiro (Scandinavia), Currenxie (Hong Kong), Paysera
- Usually easier onboarding, great UX
- Lower fees, faster support

⚠️ Note: Wise (formerly TransferWise) used to be an option, but they no longer accept new Cyprus-based business accounts.

📤 After You're Set Up

Once you’re in, your account is fully operational — you can send invoices, receive payments, and start running your business.

One small tip: notify your bank before large transactions and include relevant invoices. This builds trust and helps avoid surprise account freezes (which no one wants).

Key Take-Away

Opening a bank account in Cyprus isn’t rocket science, but it does require a game plan. Show up organized, expect some back-and-forth, and don’t take it personally if the process feels inconsistent — that’s just how it goes.

Overprepare, stay polite, and you’ll eventually get there.

Once the account is open, things get a lot smoother — and you’re officially in business.

4. Accounting, Tax & Compliance

What you need to stay compliant — and how to plan for the possible 15% corporate tax (still 12.5% as of now).

Once your business is live, staying compliant is your next priority — and your accountant becomes your best friend. They’ll handle all the official registrations, tax filings, and keep your operations running smoothly behind the scenes.

Cyprus is known for its relatively simple and entrepreneur-friendly tax system. But even so, you’ll want a solid grasp of what’s required to stay above board.

👨‍💼 What Your Accountant Will Handle

Here’s what a reliable Cyprus accountant typically manages for you:

🧾 Tax Registration – Getting your Tax Identification Number (TIN) to operate legally.
💼 Social Insurance Enrolment – Mandatory if you’re paying yourself a salary (which you’ll want to do to get your Yellow Slip – what that is? Will be explained in the next chapter).
💶 VAT Registration – Required if your revenue exceeds €15,600/year, or if you invoice EU-based clients.
🔄 VIES Registration – Needed for intra-EU business and VAT reporting.
📊 Monthly Bookkeeping – Keeping track of your income/expenses and filing VAT returns.
📈 Annual Financial Statements & Audit – Cyprus requires audited annual accounts for all LTDs, even if you’re a solo operator.

📉 Corporate Tax in 2025: What's Changing?

As of now, the corporate tax rate in Cyprus is 12.5% — one of the lowest in the EU.

However, as part of global tax harmonisation efforts, the Cypriot government has announced a planned increase to 15%, aligning with the OECD’s global minimum tax standards.

📌 Important: As of now, this change has not yet been finalised, and 12.5% remains the official rate. You can read more about the proposed reform here.

Even at 15%, Cyprus would remain extremely competitive — especially when compared to countries like Germany (~30%) or France (~25–32%).

💸 Personal Tax & Dividends

Cyprus also offers meaningful advantages on the personal side:

💰 Tax-Free Salary: You can pay yourself up to €19,500/year tax-free.
📥 Dividends: If you’re a non-domiciled resident, your dividends are exempt from income tax and the Special Defence Contribution (SDC).
🏥 GeSY Contribution: You’ll still need to pay a 2.65% contribution to the General Healthcare System (GeSY) on dividends — capped at €180,000 of income per year.

So while not completely tax-free, the structure is highly optimised for solo founders and consultants.

💰 What It Costs

📋 Initial accounting setup: ~€600
📅 Monthly accounting & compliance: €150–€300, depending on business activity

Getting a competent accountant early on will save you time, energy, and (potentially) a lot of money.

5. The Yellow Slip: EU Residency in Cyprus

How to become an official resident and get your Registration Certificate.

Yellow Slip in Cyprus immigration guide 2025 | GK Law Firm

If you’re an EU citizen planning to live and work in Cyprus, you’ll need to apply for what’s known as the Yellow Slip— officially called the Registration Certificate for EU Nationals (MEU1 form).

It’s not just a formality. It’s your legal proof of residency and will be required for a bunch of things later: health insurance, tax records, registering your car, or even opening certain bank accounts.

While it sounds bureaucratic, the process is fairly smooth — as long as you're prepared.

📌 Who Needs It?

All EU/EEA citizens staying in Cyprus longer than 90 days
Whether you’re self-employed, employed by a Cypriot company, or just living off savings

If you're setting up a company and paying yourself a salary (as covered earlier), then you’ll qualify under the self-employed or employed category.

📝 What You’ll Need to Apply

You can only apply after paying 3 months of social insurance (about 25% of your declared salary). So this step comes a little later in the process.

Once you’re ready, bring the following to your local Aliens and Immigration Office:

🧾 Completed MEU1 Form — your accountant can provide this, or you can easily download it online.
📄 Employment contract — since you're employing yourself, just create a basic agreement outlining your position and monthly salary.
🛂 Valid passport — bring the original along with a clear photocopy for submission.
📃 Lease agreement (stamped and valid) — this shows that you have a legal place of residence in Cyprus.
🔌 Utility bill — electricity, water, or internet bills are accepted, but they must be in your name and from your Cypriot address.
🖼️ Two passport-sized photos — standard size, recent, and ideally with a neutral background.
💵 €20 in cash — this is the processing fee for your Yellow Slip application, paid on the spot.

👉 Pro tip: Walk into your local Migration Office to book the appointment — it's often faster than emailing or calling.

⏱️ How Long It Takes

If everything is in order, the appointment itself is usually quick — under an hour in most cases. You’ll either get the Yellow Slip immediately or receive instructions to collect it later.

It’s a literal yellow paper (yes, yellow), and it’s valid indefinitely as long as you continue to reside in Cyprus.

📤 What to Do After

Once you receive your Yellow Slip:

📩 Send a copy to your accountant
🧾 They’ll use it to apply for your personal tax number (needed for investments, tax filings, etc.)

From this point on, you're officially registered as a Cyprus resident. That unlocks additional options later — like Non-Dom tax status, tax residency certificates, or even long-term residency programs if you stick around.

6. Lifestyle & Long-Term Considerations

Once the admin is behind you, Cyprus becomes more than just a strategic base — it becomes home. Whether you're here for a season or planning to stay long-term, it’s worth understanding the lifestyle, the expat ecosystem, and the options that open up once you’re settled.

Here’s what to consider beyond just setting up your business:

🌞 Mediterranean Quality of Life

Cyprus offers 300+ days of sunshine a year, a laid-back pace, and easy access to nature — beaches, mountains, hiking trails, and fresh air are always nearby. Work-life balance feels easier here.

🍽️ Affordability Without Sacrifice

Living costs are significantly lower than in Western Europe, especially when it comes to rent, food, and transportation. You can live well on a reasonable budget without compromising on quality.

🌐 International Community

There’s a growing digital nomad and expat scene, especially in Larnaca and Limassol. You’ll find coworking spaces, English-speaking professionals, and meetups that make integration easier than you'd expect.

✈️ Travel Access

Cyprus is a great hub for travel. You're a quick flight away from Greece, Israel, Lebanon, the UAE, and mainland Europe, making it ideal for weekend getaways or international work trips.

🛂 Long-Term Residency & Tax Benefits

Once you’ve settled, more options become available — especially if you're thinking long-term about where you base your life and business.

🟡 Non-Dom Status
You can apply for non-domicile status, which allows you to benefit from tax-free dividends and interest for up to 17 years, as long as you remain a Cyprus tax resident.
🧾 Tax Residency Certificate
Once you’re officially tax-resident, your accountant can apply for a Tax Residency Certificate, which proves your status to other countries and banks — helpful when dealing with international investments or cross-border reporting.
📅 The 60-Day Rule
You don’t have to live in Cyprus full-time to keep your residency. Under the 60-day rule, you can maintain tax residency by spending just 60 days per year in Cyprus — as long as:
- You're not tax resident elsewhere
- You don’t spend more than 183 days in another single country
- You have business activity in Cyprus (e.g. your LTD)
- You maintain a permanent address in Cyprus
This flexibility makes Cyprus one of the most attractive residency options in Europe for digital nomads and globally mobile entrepreneurs.
🏠 Permanent Residency & Citizenship
If you decide to make Cyprus your primary home, permanent residency and even citizenship are possible after several years of legal stay and contribution to the system.

Cyprus doesn’t just reward you with sunshine and savings — it also offers stability and mobility, which are increasingly valuable if you’re building something for the long haul.

8. Summary & Setup Checklist

By now, you’ve seen that setting up a business in Cyprus isn’t overly complex — but it does involve a sequence of steps that need to be done in the right order. Here’s your one-glance checklist to bring it all together:

📋 Your Step-by-Step Setup Flow:

👉 Pro tip: Copy this into your Apple Notes / Notes App:

🏠 Secure a 12-month lease
You’ll need a stamped rental agreement to open a company and prove local presence.
👩‍⚖️ Hire a lawyer and incorporate your LTD
Choose your company name, get your legal address sorted, and submit the required documents.
🏦 Open a business bank account
Be fully prepared for KYC with detailed documentation — fintechs are usually faster than traditional banks.
📊 Hire an accountant and register for tax/social insurance
Your accountant will handle VAT, TIN registration, social contributions, and help with monthly compliance.
💸 Pay yourself a salary (at least 3 months)
Keep it modest to start (e.g. €800/month) — this enables social insurance contributions.
🪪 Apply for your Yellow Slip
Once 3 salary payments are made, you’re ready to apply for your residency certificate.
🧾 Send Yellow Slip to your accountant
They’ll use it to get you a personal tax number — needed for investments, property purchases, and full tax residency status.

It’s not a zero-effort setup, but it’s manageable — and once it’s done, you’re running a fully compliant EU company from one of the most tax-efficient and livable places in the region.

Up next: how much you’ll actually need to budget for this process.

9. Estimated Setup Costs (2025)

Setting up a company in Cyprus isn’t free — but it’s far from expensive when you compare it to what you’d pay for similar structures in Germany, the Netherlands, or even the UAE. If you’re organized and don’t overpay for premium “done-for-you” packages, your setup can stay lean and efficient.

Below is a realistic breakdown of what you should budget for (

🧾 Setup Cost Breakdown

🔍 A Few Notes:

The range depends on whether you go with premium law firms, add nominee services, or use a coordinator to handle everything for you.
Coordinators can help by connecting you with trusted local providers — often worth the extra €250 just to avoid missteps.
Monthly costs will continue as long as your company is active, so factor that into your ongoing expenses.

The bottom line? You’re looking at around €3K for a clean setup and then about €200/month to keep it running — not bad for an EU company with a beach nearby.

10. Final Thoughts

Setting up a business in Cyprus in 2025 isn’t just about tax advantages or warm weather (though those definitely help). It’s about creating a smarter, more intentional way of working — one that gives you legal grounding in the EU, a better lifestyle, and long-term optionality for where and how you want to live.

Yes, there’s paperwork. Yes, banking might test your patience. But once you’re through the setup phase, you’ll have something many founders spend years chasing: freedom with structure.

You’ll be legally established. You’ll be operating from a tax-efficient base. And you’ll have a company that can scale with you — whether you’re working solo, building a team, or exploring multiple income streams.

In short: Cyprus gives you room to breathe, build, and live well.

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