Starting a Business in Cyprus: Trusts, Tax Benefits & Residency

Cyprus attracts a growing number of expats who want to start a business. It offers a 12.5% corporate tax rate and a simple set-up process, and both EU/EFTA and UK nationals can consider setting up a trust and living on the island to launch and protect a business.

What do EU/EFTA nationals need to start a business in Cyprus?

• You can begin establishing your company as soon as you arrive.
• After three months of living in Cyprus, apply for the Registration Certificate for EU Nationals (the "yellow slip") through the Civil Registry and Migration Department. It formalises your residency. Required documents include your passport, proof of address and evidence of sufficient income or employment.
• Register with the local municipality and the tax authorities for compliance, utilities and bank accounts.

What do UK and other third-country nationals need?

• A visa is needed to enter Cyprus. See the Cyprus Ministry of Foreign Affairs.
• A one-year multiple-entry business visa is available and can be extended up to five years.
• The Business Facilitation Unit helps non-EU nationals and UK citizens establish companies under qualifying conditions.
• A trust can support asset protection, business structuring, succession and estate planning.

Good to know: investing more than 5 million euro may qualify you for the Naturalisation by Investment scheme, which has changed over time. Consult local legal experts, and see also how to get Cyprus citizenship.

What are the advantages of starting a business in Cyprus?

• Low corporate tax rate: 12.5%, among the lowest in the EU.
• Double tax treaties: agreements with over 40 countries. See the Ministry of Finance list.
• Inclusive policy: no nationality restrictions on directors or shareholders.
• Minimal capital: you can start with zero minimum capital.

Other advantages include an educated, English-speaking workforce, competitive office rents, a legal system based on English common law, modern infrastructure and professional service providers.

Which business structures are available?

The most popular structure is the Private Limited Company (LTD):

• One director and one shareholder are required, and up to 50 shareholders are allowed.
• Directors can be of any nationality. Local residents can help optimise tax benefits.
• A trust that owns the company adds asset protection and planning flexibility.

Other options are public limited companies, partnerships and sole proprietorships. A registered branch of a foreign company is another way to enter the EU market.

How do you register a company in Cyprus?

Step 1: Name approval

Apply in person, by post or online through the Cyprus Registrar of Companies and the ARIADNI Government Gateway Portal.

Step 2: Incorporation

Prepare and submit the documents. A Cyprus-registered lawyer must certify them. File through ARIADNI or directly with the Registrar.

Step 3: Post-incorporation

The certificate arrives in 7 to 10 working days. You then register for tax, VAT (if applicable) and social insurance if you are hiring. Open a corporate bank account and, if needed, register for e-commerce or online trading permits.

Local consultants can help make sure no step is missed.

How can a trust be used for business or estate planning?

Trusts are governed by the International Trusts Law, which has been updated in recent years.

A trust can:

• Own shares in a Cyprus LTD or in international holdings
• Provide income to family members under set terms
• Help avoid probate and manage succession
• Protect assets from litigation or political instability

To set one up:

1. Appoint at least one Cyprus-resident trustee.
2. Draft a trust deed covering terms, beneficiaries and purpose.
3. Transfer the initial assets into the trust.
4. Maintain ongoing compliance, including possible tax reporting depending on residency.

What is life in Cyprus like for business owners?

• Climate and lifestyle: over 300 days of sunshine, a Mediterranean culture and a strong expat community.
• Affordable living: lower housing, service and dining costs than in Western Europe.
• Healthcare: strong public and private systems, and international insurance is widely accepted.
• Education: international schools and universities teaching in English.
• Transport: reliable local transport and two international airports.
• Culture: arts, food, music and historic and archaeological sites.

What is the Non-Dom regime?

See KPMG's overview. The regime exempts dividends, interest and rental income for 17 years. Applicants may apply if they were not tax-resident in Cyprus for 17 of the past 20 years.

What residency pathways exist?

• Employment or business ownership
• Property investment (minimum 300,000 euro for fast-track residency)
• Family reunification or long-term stays

How does it work in practice?

These illustrative scenarios show how the pieces fit together.

1. A British consultant relocates for the lifestyle, sets up a Cyprus LTD to invoice clients and applies for Non-Dom status.
2. An Italian EU entrepreneur sets up a Cyprus LTD as a holding company for a tech start-up, and a trust for ownership and succession.
3. A South African investor invests in property, applies for a multi-entry visa, starts a company and later qualifies for fast-track residency. A trust oversees the business and assets.

Why does Cyprus make sense for entrepreneurs?

Low tax rates, simplified administration, a strong legal foundation and a warm climate make Cyprus a leading destination for global entrepreneurs.