# Business set up in Cyprus



## Rico16 (Feb 4, 2013)

Hello there! 

I am currently thinking to move and relocate to Cyprus, I have been thinking about this since quite a long time now but never did. 

I am a freelance translator and I work with other translators, the plan is to set up a small business in Cyprus (will be online) so just need a place to stay and a good internet connection.

My question is about the social contributions in Cyprus: how much do you have to pay as an amount? I read in some websites that the rates go from 11 to 15% but I cannot find a fixed rate for that.

Can you please advice?

Thanks a lot and hopefully see you in Cyprus
Rico


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## Baywatch (Mar 30, 2014)

Rico16 said:


> Hello there!
> 
> I am currently thinking to move and relocate to Cyprus, I have been thinking about this since quite a long time now but never did.
> 
> ...


If you work as self employed here you pay 13,6% My wife also work as freelance translator and even if the Internet is not Europe class, it is more then enough for what you need it for


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## Rico16 (Feb 4, 2013)

Baywatch said:


> If you work as self employed here you pay 13,6% My wife also work as freelance translator and even if the Internet is not Europe class, it is more then enough for what you need it for


Thank you very much for your prompt reply! 
Is there a fixed amount to be paid or only this percentage? It is a bit unclear to me how I can calculate my social contributions.

Thanks again, have a nice day


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## Baywatch (Mar 30, 2014)

Rico16 said:


> Thank you very much for your prompt reply!
> Is there a fixed amount to be paid or only this percentage? It is a bit unclear to me how I can calculate my social contributions.
> 
> Thanks again, have a nice day


When you register as self employed they will calculate your contributions. Its plain percentage. But they only accept a certain amount depending on what field you are in. For you it is about 890€ per month. You have to declare every 12 month and get a new decision. after 2 years they will calculate from your tax return

Anders


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## Baywatch (Mar 30, 2014)

Baywatch said:


> When you register as self employed they will calculate your contributions. Its plain percentage. But they only accept a certain amount depending on what field you are in. For you it is about 890€ per month. You have to declare every 12 month and get a new decision. after 2 years they will calculate from your tax return
> 
> Anders


Just to explain. The 890 € is the minimum they accept.


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## Rico16 (Feb 4, 2013)

Baywatch said:


> Just to explain. The 890 € is the minimum they accept.


Wow, that seems to be a lot of money for a small business - in case you make 2k€ per month, half goes on social contributions... Is it the same for the Ltd companies or even more for those?

Thanks Anders, very useful info!


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## Baywatch (Mar 30, 2014)

Rico16 said:


> Wow, that seems to be a lot of money for a small business - in case you make 2k€ per month, half goes on social contributions... Is it the same for the Ltd companies or even more for those?
> 
> Thanks Anders, very useful info!


No, you misunderstand. They accept a minimum income of about 890€ Meaning around 110€ per month in contribution


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## zach21uk (Jun 26, 2014)

I just registered the other week and according to the rate sheet I was given, the minimum is 14.6% on a minimum income of €261.57 per week (€1046/month).

My rate sheet says "Contribution Amounts for workers into the Social Insurance Fund for the 1st-4th quarters of 2014".

And then in a table:

Earnings/wk: €261.57
Amount Paid per Quarter: €496.46

Earnings/wk: €287.73
Amount Paid per Quarter: €546.11

Earnings/wk: €357.48
Amount Paid per Quarter: €678.50

Earnings/wk: €374.92
Amount Paid per Quarter: €711.60

Earnings/wk: €383.64
Amount Paid per Quarter: €728.15

Earnings/wk: €470.83
Amount Paid per Quarter: €893.64

Earnings/wk: €749.83
Amount Paid per Quarter: €1423.18

Earnings/wk: €775.99
Amount Paid per Quarter: €1472.83

Earnings/wk: €1046.00
Amount Paid per Quarter: €1985.31

On the back side of the paper, there is another large table which appears to list "Professional Categories".


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## Rico16 (Feb 4, 2013)

Thank you very much for your replies, very useful details once again, thanks! 

I am wondering Zach if also the savings will follow in this type of calculation as for sure I will have some savings to add to my normal business activity. As I am a freelance translator and writer sometimes I can make more than the minimum amount you posted but sometimes it can be less... it depends on the period, clients.

Thanks


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## zach21uk (Jun 26, 2014)

From what I understood, they calculate it based on average earnings in that field of work that they have saved into that system. They tell you what they believe you earn and calculate what you pay based on that.

If they have calculated it too high, there is another form that you fill in to correct their mistake. 

You should calculate your weekly earnings based on a yearly average, which is what I did as, like you, I have some very high weeks and some very low weeks. When averaged out to 52 weeks, it gives a much more correct number.


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## Baywatch (Mar 30, 2014)

zach21uk said:


> I just registered the other week and according to the rate sheet I was given, the minimum is 14.6% on a minimum income of €261.57 per week (€1046/month).
> 
> My rate sheet says "Contribution Amounts for workers into the Social Insurance Fund for the 1st-4th quarters of 2014".
> 
> ...


This figures are not cut in stone. We pay 332 € this week on our Cyprus income. That is from about 890 € per month income.

Zack is right, it is 14,6% now, they raised 1% in April


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## Rico16 (Feb 4, 2013)

It might be different from each type of activity or you are still taxed with the previous system...


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## zach21uk (Jun 26, 2014)

I'm not sure if they are just indicative rates, or if its a case of "if you earn between XX and XX, you pay this", etc. I'll ask tomorrow as I am going there to make my first payment.


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## Rico16 (Feb 4, 2013)

Zach for President, bravo!

Thanks a lot for your help, I cannot believe how complicated is for a state to have some clear points for young people who want to start something (not only Cyprus, I lived in several different countries and always the same story!)  

All the best


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## zach21uk (Jun 26, 2014)

I've been down this road before in Serbia. Believe me, compared to that, Cyprus is a cake walk. Its all be so easy so far that I can barely believe it.


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## Baywatch (Mar 30, 2014)

zach21uk said:


> I'm not sure if they are just indicative rates, or if its a case of "if you earn between XX and XX, you pay this", etc. I'll ask tomorrow as I am going there to make my first payment.


Its really simple. It come down to how good you are to convince the manager about how little you earn, then it can be under the sums in the list. But not lower than 890€

One thing that is important is that if you pay to much, you will not be paid back. Btw this is also the case with VAT. 

You can do this year 1 and 2 of your business. The 3rd year you will pay calculated on the income you declared in your tax return for year 2.

Can I ask you Zach, why you are paying now? The last date for this quarter is 10th of October


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## Rema (Aug 12, 2012)

Baywatch said:


> Its really simple. It come down to how good you are to convince the manager about how little you earn, then it can be under the sums in the list. But not lower than 890€
> 
> One thing that is important is that if you pay to much, you will not be paid back. Btw this is also the case with VAT.
> 
> ...


Just grateful I'm retired and so don't have to worry about all of this!


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## zach21uk (Jun 26, 2014)

Baywatch said:


> Can I ask you Zach, why you are paying now? The last date for this quarter is 10th of October


Because I needed them to issue me a certificate for my immigration appointment tomorrow, which they wouldn't do until I paid the first payment.

Anyway, I saw a manager of sorts today as they had overcalculated what I should pay, so I handed in another form and she recalculated it for me. I asked her if the rates are indicative and yes, they are.

My new rate to pay is €495 per quarter which works out to €165 per month. I am quite happy with that.

Job done, off to my immigration appointment in the morning.


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## Baywatch (Mar 30, 2014)

zach21uk said:


> Because I needed them to issue me a certificate for my immigration appointment tomorrow, which they wouldn't do until I paid the first payment.
> 
> Anyway, I saw a manager of sorts today as they had overcalculated what I should pay, so I handed in another form and she recalculated it for me. I asked her if the rates are indicative and yes, they are.
> 
> ...


I was sure that was the reason, we had to do the same. Your rate is OK. 

Good luck with the interview, I am sure it will be OK

Anders


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## Rico16 (Feb 4, 2013)

Hello there Zac

So will 165€ monthly the final quote to be paid for a self employed individual with your same income? 

Now it sounds good and reasonable  let's hope I can start something good there! 
Thanks a lot
Riccardo


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## zach21uk (Jun 26, 2014)

Maybe the manager just liked me because I'm half cypriot and gave me a really good rate, I dont know for sure!


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## Rico16 (Feb 4, 2013)

And another question: this amout paid out only the health as far I know, correct? I read that in Cyprus there is no unemployment benefit.


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## Rico16 (Feb 4, 2013)

zach21uk said:


> Maybe the manager just liked me because I'm half cypriot and gave me a really good rate, I dont know for sure!


Ahha  you did not tell earlier that you are half Cypriot, now we know the reason


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## Baywatch (Mar 30, 2014)

Rico16 said:


> Hello there Zac
> 
> So will 165€ monthly the final quote to be paid for a self employed individual with your same income?
> 
> ...


It all comes to how well you can convince them that you will not earn more. This is a balance act. Because if you get to low income you will not be allowed to stay if you have no other means to support you

And you will be placed in another occupation group then Zach with other figures
Anders


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## zach21uk (Jun 26, 2014)

@Anders - do you know what is considered too low?


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## Rico16 (Feb 4, 2013)

I would like to introduce a different question here related to the self employment: in case you have the self employment registered somewhere else from where you live but there is the double tax agreement between those countries, would this be more convenient or some troubles will come up with the Tax office?

Thanks


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## Baywatch (Mar 30, 2014)

Rico16 said:


> And another question: this amout paid out only the health as far I know, correct? I read that in Cyprus there is no unemployment benefit.


There is unemployment benefits, very low. But as self employed you are not entitled to them. The fee also cover a lot of other things.

It covers health if you have contributed in total 3 years. So for you you need a E104 form that shows your contribution in other EU countries


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## Rico16 (Feb 4, 2013)

Hello there

Re-posting this just to see if anyone is in the same situation: in case your business is located abroad (office in an EU country) but you are living abroad, where should I pay taxes in? In country A where the office is or B where I live? I am aware of the double taxation treaty within the EU but how do they work in this case?

My business is online so I generate income over the net,

Thanks a lot
Rico


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## arosarosa (Oct 28, 2014)

*Employee to Self-Employed?*

I am already registered with the Migration Service as an employee, but I have decided to become self-employed. As an EU citizen, are there any obstacles to doing this, or any requirements?

Thanks,
Andrew


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## expatme (Dec 4, 2013)

Rico16 said:


> Hello there
> 
> Re-posting this just to see if anyone is in the same situation: in case your business is located abroad (office in an EU country) but you are living abroad, where should I pay taxes in? In country A where the office is or B where I live? I am aware of the double taxation treaty within the EU but how do they work in this case?
> 
> ...


May I suggest that you have a word with your accountant>


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## arosarosa (Oct 28, 2014)

Thanks, but I was just concerned about the formalities, i.e. what documents you require to register as self-employed with the service?

I do very much appreciate the help. Thanks, Andrew


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## Veronica (Apr 5, 2008)

arosarosa said:


> I am already registered with the Migration Service as an employee, but I have decided to become self-employed. As an EU citizen, are there any obstacles to doing this, or any requirements?
> 
> Thanks,
> Andrew


Your profile says you are in Turkey. Are you now in Cyprus? If so is it the North or the South?


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## arosarosa (Oct 28, 2014)

Veronica said:


> Your profile says you are in Turkey. Are you now in Cyprus? If so is it the North or the South?


Sorry, I was in Turkey but moved to Cyprus South about a year ago. I will update my profile.

Thanks for letting me know, ar


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## arosarosa (Oct 28, 2014)

Unfortunately, I find that I cannot make changes to the profile?

Thanks,
Andrew


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## Veronica (Apr 5, 2008)

arosarosa said:


> Unfortunately, I find that I cannot make changes to the profile?
> 
> Thanks,
> Andrew


I will ask Admin to change it for you.


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## arosarosa (Oct 28, 2014)

Thanks very much. ar


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## GoingOut (Sep 28, 2016)

Rico16 said:


> Hello there
> 
> Re-posting this just to see if anyone is in the same situation: in case your business is located abroad (office in an EU country) but you are living abroad, where should I pay taxes in? In country A where the office is or B where I live? I am aware of the double taxation treaty within the EU but how do they work in this case?
> 
> ...


Hi Rico,

did you have any luck with this query? I have a UK company generating the income, but will be resident in Cyprus and the work carried out there. I was wondering whether to set up a Cyprus Ltd company and sub-contracting the work - but then I'm paying out two lots of accountants fees etc.

Thanks,
Chris


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