Self-employed in Cyprus

Registration as an individual entrepreneur in Cyprus

There are three main categories of self-employed workers or individual entrepreneurs in Cyprus.

  • The first category includes people with a high level of education and a high degree of job satisfaction. People in this category usually have their own place of work, organize their working hours and have stable high income. These include lawyers, doctors and physiotherapists.
  • The second category includes self-employed people with a low level of education, usually doing manual labor. In most cases people of this category provide work for the agreed wages and their working conditions in terms of hours, place of work, pay, health and safety are not regular, making them more prone to accidents at work. This category includes construction workers, unskilled workers, agricultural workers and technicians.
  • The third relatively new category includes people with higher or secondary specialized education, whose activities are directly or indirectly related to the information technology. Their work place is often their home and their means of work is a personal computer. These employees organize their work place and time independently, specializing in the development, maintenance and/or support of the software or using online marketing platforms to generate income.

Registration as an individual entrepreneur in Cyprus is a fairly simple process. However, the benefits of this type of registration compared to a company are controversial if you earn more than €19.500 and hire employees.

Major characteristics of individual entrepreneurs:

  1. Liable to income tax, not sales tax: the expenses incurred for running a business are taxable (deducted for tax purposes).
  2. Taxable under the PAYE tax category for the employed persons.
  3. If the turnover of the individual entrepreneur exceeds €70,000 per year, the audited financial statements must be prepared in the same way as in the case of the company.
  4. Must be registered as VAT payers and comply with VAT rules and regulations.
  5. May register as employers and be personally liable for the payroll taxes of their employees, just like companies.
  6. Often checked by VAT and Income Tax Departments (more often than companies).
  7. Are personally liable to VAT and income tax offices (as opposed to companies).

You can read more about the taxation of individual entrepreneurs and the comparative characteristics of registration as an individual entrepreneur and a company in our blog.

Amazon Corporate&Immigration Services will consult you on the advisability of registering as an individual entrepreneur, taxation and doing business as an individual entrepreneur, based on the information you provide.

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