What business should you start in Cyprus?

Tourism in Cyprus - investment built on high demand

Tourism is one of the main sources of national income in Cyprus. A significant share of the island's population is employed in this sector. In 2022, plans were announced to enter the world's top 30 and Europe's top 20 for tourist appeal.

Cyprus has many attractions preserved from antiquity and the Middle Ages. The island is also famous for its beaches - there are a great many beaches here, and their cleanliness is confirmed by the prestigious international "Blue Flag" award. Many people come here every year to hold a wedding or spend their honeymoon. This is why many are drawn to starting a business in Cyprus in precisely this sphere. These can include:

• the hotel business - a growing flow of tourists drives demand for accommodation, and visitors are interested in hotels of various types, from budget to premium;
• the restaurant business - investing in Cyprus in cafes, restaurants and bars located in places that attract tourists can bring solid profit, and here too there is demand for variety, from fast food to signature cuisine;
• the transport business - taxi services, car and truck rental, and rental of other vehicles;
• the excursion business - on an island with so many attractions, guide services are in steady demand;
• business services for tourists - you can open an agency specializing in selling tours, organizing events, renting out real estate, and booking hotel rooms.

Investing in residential and commercial real estate in Cyprus

Another business direction that can become a source of steady income is working with real estate. Many local residents and foreigners seek to invest in this segment of the economy. Here are several reasons why investing in Cyprus real estate is profitable:

• the island is popular with tourists, so hotels, villas, flats and apartments consistently generate income;
• favorable investment terms - Cyprus offers benefits to foreigners who purchase residential and commercial property on the island; in particular, if the purchase price exceeds 300,000 euros, residency status can be obtained through an accelerated procedure, from two months;
• the real estate market has been growing steadily in recent years - according to statistics, prices increased by 4.7% compared to the previous year;
• high yields - in locations especially popular with tourists, yields can reach 8-10% per year, which is a very good figure.

To open a firm engaged in reselling real estate or renting it out, you need a solid starting capital. You need to take into account the cost of the properties, staffing and agency service expenses, and taxes.

When renting out property, the highest profit is generated by housing located near the beach. Villas and apartments in coastal areas are in demand, especially those with sea views. Annual returns reach 5-10%.

Business immigration to Cyprus: why is it interesting to investors around the world?

Starting a company in Cyprus and subsequently relocating there attracts investors from various regions of the world, including from Russia. This is especially interesting for those planning to expand their business abroad and invest savings in a stable, developed economy.

Starting a business in Cyprus, or relocating a company that is already operating, is attractive for many reasons:

• the Republic of Cyprus is a member of the European Union and provides access to one of the largest markets in the world, so it can be viewed as a platform for further expansion into Europe and other regions;
• taxes are low here, investment terms are favorable and business registration rules are simple, and residency and residence programs are of interest to those who want to spend more time in the European Union;
• it is a favorable place not only for work but also for everyday life, thanks to a mild climate, a high level of safety, and well-developed infrastructure;
• the island is favorably located, situated between Europe, Asia and Africa, allowing convenient work with these regions.

Corporate income tax in Cyprus is just 12.5%. The Republic has signed double taxation treaties with many countries, allowing tax optimization and simplified reporting. Such a treaty is also in effect with Russia.

The taxation system for individuals is also simple and favorable. If you own real estate in Cyprus, you only pay tax on income earned on the island.

Buying an existing business in Cyprus or starting a new one: important nuances

Should you start a firm or buy an existing one? It depends on the goals you plan to achieve and your starting situation.

An existing Cypriot company already has a client base, staff, and established business processes. The main advantage of buying such a business is saving the time and effort required to start from scratch. But there are downsides too. These include:

• a high purchase price;
• possible friction and conflicts between staff;
• unforeseen risks and problems - this drawback is more pronounced if the entrepreneur buys a firm operating in a field they are not yet very familiar with.

How to open a company in Cyprus in 2023

A Cypriot company is registered in several stages.

• Choose the legal form of the business. This could be, for example, a Limited Liability Company or a Public Limited Company.
• Make sure the company name is unique. This needs to be checked in the Cyprus Registrar of Companies.
• Register the organization in the same Registrar. You will need to provide the articles of association and documents on the people who are owners of the business. A registered office address will also be needed.
• Obtain a tax identification number. It is issued by the local tax authority.
• Open a bank account. This can be done at any bank on the island.
• Obtain licenses and permits, if required.
• Find office premises, sign contracts with companies that will service it, as well as with a transport company.
• Register in the national social insurance system. Social insurance contributions must be paid for all employees.

Business in Cyprus: several promising ideas

What business should you start in Cyprus? The country's economy offers wide opportunities for enterprising people ready to invest in Cyprus. Here are several ideas, though keep in mind these are indicative suggestions.

Auto service

In 2022, Cyprus ranked in the top 10 European countries by the number of cars per capita. It is no surprise that repair and service businesses are in high demand here. Setting up an auto repair shop is a good option both for a professional car mechanic and for an entrepreneur weighing which segment of the economy to invest in in Cyprus. In this case it is especially important to choose a suitable location where there are many car owners ready to turn to you for professional help.

Diving center

One of the most promising directions related to the tourism sector is a diving center. Many tourists come to the island to admire the underwater world. For example, the Swedish cargo ship "Zenobia" sank near Larnaca in 1980. This site is extremely attractive to many divers. A business connected with diving can therefore prove very profitable. You can implement your own ideas, but a franchise may also appeal to some.

Property rental

Renting out residential and commercial property in Cyprus is traditionally considered one of the most attractive directions for investors. The country's economy is largely oriented toward tourism, so housing available for rent in areas popular with tourists is a source of steady income. But you need to be prepared for high competition in this segment.

Transport services

A car service network franchise or your own shipping company - the options can vary. Passenger and freight transport is in demand within Cyprus itself, but the island is also an important transport hub, so a company operating on international routes could be established. At the government level, Cyprus has signed shipping agreements with many countries around the world.

Educational services

Various options can be chosen in this segment too. For example, kindergartens and schools for Russian-speaking children are in high demand. On the other hand, teaching at many Cyprus universities is conducted in English, which creates opportunities for tutoring.