Our guide to Payroll in Democratic Republic of the Croatia

Doing Business in Cyprus

Investing in Cyprus

Cyprus is especially attractive for:

• Holding companies
• Investment funds & family offices
• Regional headquarters
• Tech, fintech & consulting firms

Key advantages

• Legal system based on UK common law
• English widely spoken
• One of the largest double-tax treaty networks in Europe
• Strong professional services sector (legal, tax, fund admin)

Foreign company registrations increased sharply in 2024–2025 despite an announced tax hike, indicating continued confidence.

General Information

Full Name: Republic of Cyprus

Population: ~ 1.33 million (2025 est.)

Capital: Nicosia

Major Language(s): Greek (official), Turkish (official); English widely spoken

Monetary Unit: Euro (€)

Main Exports: Tourism & travel services, shipping services, pharmaceuticals, food products, citrus fruits

GNI Per Capita: ~ USD 38,000 (2024–25, high-income economy)

Internet Domain: .cy

International Dialing Code: +357

How to Say?

English: Greek (Ελληνικά) (Pronunciation)

Hello: Γειά σας / Γειά σου (Ya-sas / Ya-soo)

Good Morning: Καλημέρα (Kah-lee-MEH-rah)

Good Evening: Καλησπέρα (Kah-lee-SPEH-rah)

Do you speak English? Μιλάτε αγγλικά (Mee-LAH-teh an-glee-KAH)

Goodbye: Αντίο (Ahn-DEE-oh)

Thank you: Ευχαριστώ (Ef-kha-ree-STO

See You Later: Τα λέμε (Tah LEH-meh)

Public Holidays

1 January: New Year’s Day

6 January: Epiphany

23 February: Green Monday (Clean Monday / Kathara Deftera)

25 March: Greek Independence Day

1 April: Cyprus National Day (EOKA Day)

10 April: Orthodox Good Friday

13 April: Orthodox Easter Monday

1 May: Labour Day (May Day)

1 June: Pentecost Monday (Kataklysmos / Whit Monday)

15 August: Assumption of the Virgin Mary

1 October: Cyprus Independence Day

28 October: Ochi Day

25 December: Christmas Day

26 December: Boxing Day

Registrations and Establishing an Entity

Common Entity Types

Most popular options:

• Private Limited Company (Ltd) – most common for trading, holding, consulting
• Branch of a foreign company
• Investment Fund / SPV (more regulated)
• Partnership (rare for foreign investors)

Private Limited Company is the default choice for foreign owners

Registration Process (Step-by-Step)

Step 1: Name approval

• Submit company name to the Registrar

Step 2: Prepare incorporation documents

• Memorandum & Articles of Association
• Shareholder & director details

Step 3: File with Registrar of Companies

• Electronic submission via Cyprus Companies Registry

Step 4: Registration completed

• Certificate of incorporation issued

Typical timeline: 5–10 working days (faster via service providers)

Post-Incorporation Registrations (Very Important)

After company registration, you must also:

• Tax registration with Cyprus Tax Department
• VAT registration (mandatory if turnover > €15,600)
• Social Insurance registration (if hiring staff)
• UBO Register filing (Ultimate Beneficial Owner disclosure)

Banking

Standard Branch Hours

• Monday – Friday: 08:30 – 13:30
• Weekends: Closed (most branches)

This applies to most high-street branches across the island. Banking is very much morning-focused in Cyprus.

Working Week

Standard Working Days

• Monday to Friday
• Weekend: Saturday & Sunday (non-working for most sectors)

This applies to government offices, banks, corporates, and most private businesses.

Employment Law

Holiday Accrual / Calculations

Statutory Entitlement

• 5-day workweek: 20 working days per year
• 6-day workweek: 24 working days per year
• Entitlement equals 4 weeks of paid annual leave once 48 weeks are worked in a year

Accrual & Pro-rata

• Leave accrues from day one of employment (full entitlement earned after 48 weeks).
• Employees who start mid-year or work part-time accrue pro-rata based on time worked.

Carry-over & Payout

• By agreement, unused leave may be carried forward up to 2 years (caps: 40 days for a 5-day week; 48 days for a 6-day week).
• Unused leave is paid out on termination at the employee’s normal rate.

Note: Absences such as sickness and maternity are treated as working periods for leave purposes and do not reduce entitlement.

Maternity/Paternal Leave

Maternity Leave

• Duration: 18 weeks (with compulsory portion before/after birth)
• Pay: Funded mainly by Social Insurance (not salary from employer)
• Protection: Dismissal during maternity leave is prohibited; job and seniority are protected.

Paternity Leave

• Duration: 2 consecutive weeks per birth
• Pay: Covered by Social Insurance (subject to contribution conditions)
• Protection: Job protection applies during paternity leave.

Parental Leave (additional)

• Up to 18 weeks per child (limits per year apply); allowance available via Social Insurance if conditions are met.

Sickness

Sick Leave & Pay

• Medical certificate required.
• Days 1–3: No statutory Social Insurance payment (employer supplementation only if agreed by contract/collective agreement).
• From Day 4: Sickness Benefit paid by Social Insurance to eligible employees.

Coverage & Rights

• Sick leave does not reduce annual leave entitlement.
• Duration and any employer top-up beyond statutory benefit depend on the employment contract or CBA (except specific sectors with special rules).

National Service

• Mandatory for Cypriot male citizens.
• Employment is suspended (not terminated) during service.
• Job protection applies: employees are entitled to return to the same or equivalent role after completion.
• No salary obligation during service unless provided by contract; Social Insurance credits may apply depending on circumstances

Tax & Social Security

Tax Rates

Corporate Tax

• 15% flat rate on net profits
• Applies to Cyprus tax-resident companies on worldwide income

Personal Income Tax (Individuals)

• Tax-free allowance increased to €22,000 from 2026
• 50% salary exemption available for high-earning expatriates (salary ≥ €55,000) for up to 17 years

Social Security

Employee Contributions (2026)

• Social Insurance capped at €68,904/year
• GHS capped at €180,000/year

Employer Contributions (2026)

Minimum wage in 2026

National Minimum Wage (Gross)

Key Points

• Applies to full-time employment
• Figures are gross (before tax and social insurance)
• Introduced following the Cyprus Council of Ministers’ decision updating the statutory minimum wage framework
• Employers must observe the increase even if older contracts show lower amounts

Coverage & Exceptions

The national minimum wage applies to most private-sector employees, but excludes:

• Seafarers
• Domestic workers
• Agricultural workers
• Certain hospitality and seasonal roles covered by sectoral agreements

Payroll

Electronic payslips are explicitly permitted under Cyprus law.

Employers may issue payslips in paper or electronic form, as long as employees can access, save, and print them if needed

New Employees

When hiring a new employee in Cyprus, the employer has immediate reporting obligations to multiple authorities.

What must be reported

1. Registration with Social Insurance Services
• Every new employee must be registered with the Social Insurance Services (SIS)
• Applies to full-time, part-time, fixed-term and temporary staff
• Registration must be completed before or at the start of employment
2. ERGANI electronic system (Ministry of Labour)
   • Employee & employer details
   • Job title and duties
   • Start date
   • Salary & payment frequency
   • Working hours
   • Duration (for fixed-term contracts)
• Employers must register essential employment terms in the ERGANI system
• Covers:
• Introduced under the Transparent & Predictable Working Conditions Law
3. Payroll & PAYE setup
• Employee must be included in monthly PAYE income tax withholding
• Social Insurance & GHS contributions start from first day of employment

Leavers

Termination notification to Social Insurance Services

• Employer must inform SIS of:
• Termination date
• Reason for termination (end of contract, resignation, dismissal, redundancy)
• Reporting is done via ERGANI / gov.cy platform

Final payroll reporting

• Final salary must include:
• Outstanding wages
• Payment in lieu of notice (if applicable)
• Accrued but unused annual leave
• Social Insurance & GHS continue during notice period, including payments in lieu of notice

Redundancy cases

• If termination is due to redundancy:
• Employer must notify the Ministry of Labour
• Redundancy Fund may pay statutory compensation
• Employer obligations differ from ordinary termination

Employee Benefits

Cyprus provides strong mandatory employee benefits, including Social Insurance and GESY healthcare, paid annual leave (20–24 days), public holidays, sick leave, and paid maternity (18 weeks) and paternity (2 weeks) leave, with redundancy protection. Most income‑replacement benefits (sickness, maternity, paternity) are funded through Social Insurance, keeping direct employer costs relatively low. Beyond the statutory minimum, many employers enhance packages with private medical insurance, pension/provident funds, bonuses (often a 13th salary), allowances, and flexible working to stay competitive.

Visas & Work Permits

EU / EEA / Swiss Citizens

• No work permit required (EU freedom of movement).
• Must register residence if staying/working longer than 3 months (Yellow Slip / MEU1) and obtain a social insurance number.

Non-EU Citizens (Third-Country Nationals)

• Work permit + residence permit required before starting employment.
• The process is employer-sponsored in most cases.

Main routes:

1. Employer-Sponsored Employment Permit
• Job offer from a Cyprus employer.
• Labour market test (prove no suitable EU candidate), unless exempt.
• Minimum salary thresholds apply (vary by role; higher for skilled/executive roles).
• Issued for 1–4 years, renewable.
2. Company Director / Intra-Company Transfer (ICT)
• For executives/managers or transfers within multinational groups.
• Faster processing; some categories exempt from labour market test.
3. EU Blue Card (Highly Skilled)
• For high-earning professionals; competitive salary threshold and qualifications required.
4. Seasonal Work Permits
• Tourism, agriculture, hospitality; simplified and time-limited.

Application Flow (Non-EU)

1. Employer approval (Department of Labour).
2. Apply for Type D work visa (entry).
3. After arrival, register for Residence Permit / ARC with the Civil Registry & Migration Department.
   Processing is increasingly digital, with typical timelines of 3–8 weeks if documents are complete.

Family Members

• Spouses and dependent children can apply for family reunification permits; spouses may be allowed to work, depending on status.

Digital Nomad Visa

• For non-EU nationals working remotely for employers/clients outside Cyprus.
• Allows residence but not local employment.