Cyprus Country Facts

We provide comprehensive information regarding, Culture, Work life, Taxation, Visa’s & immigration, Labour Law, recruiting in your country of choice and employment contracts.

Global Expansion Made Easy for You

Expanding into Cyprus generally comes with challenges, however, partnering with us and using Employer of Record (EOR) eliminates the frustrations you could encounter.

Cyprus Visas, Work Permits and Migration

With a well-educated workforce, low-cost and advantageous business environment, competitive tax system, highly advanced infrastructure, and investment-friendly incentives, Cyprus is a notable business expansion option that is ripe with opportunities for foreign companies and entrepreneurs.

Cypriot visa and permit regulations require expert guidance as they vary according to the zones foreign nationals reside in, and companies entering Cyprus’ market may find processing work permits and visas a major issue.

Acquiring these documents, as well as implementing your employees in a new territory (both foreign and domestic) requires an in-house specialist department – and every new country comes with its own demands. Few companies, however, have the resources or the time.

But at Bradford Jacobs, as a Professional Employer Organisation (PEO) with years of experience in Employer of Record (EOR) services, we have plenty of both. We are experts in Cypriot recruitment and payroll and can ensure an employee’s swift implementation in Cyprus with the correct visa and permit documentation.

What Types of Work Visas and Permits for Cyprus are there?

Whilst The Republic of Cyprus is part of the continent in the EU, it is not part of the Schengen area. So, in Cyprus, the visa and permit regulations are different to the rest of the EU. In order for non-nationals to work and live in Cyprus, there are a few visas and work permits that one can apply for:

Types of Permits

Cyprus work permit – before applying for a work visa, a foreign national’s employer must apply for a work permit for authorization to work in Cyprus whilst the employee is in their country of residence.

Cyprus residence permit – When foreign nationals arrive in Cyprus, they must apply for a residence permit in order to live in Cyprus for over 90 days.

Types of Visas

Cyprus Work Visa – allows a foreign national to enter Cyprus with the purpose of long-term employment and residence

Schengen Visa – forming part of the Schengen area, foreign nationals who wish to travel to Cyprus for a short period of time can apply for this visa type.

Cyprus Tax Laws

With over 20 years of experience, Bradford Jacobs is a leading international payroll provider. Our expertise in payroll and tax supports our work and helps us manage complex regulations facing companies wishing to expand into Cyprus.

Cyprus is seen as the link between Europe, Africa, and Asia – offering many unique tax opportunities for international businesses, such as low corporate tax, favourable double taxation treaties, no withholding tax on dividends and interest, and more. The company also benefits from a well-educated workforce, a low-cost business environment, and low costs of living.

Dealing with tax matters is a major issue for companies seeking to develop an international presence, particularly as disciplinary measures can apply for non-compliance.

Tax, and especially overseas tax, can be complicated.

Overview of Taxes in Cyprus

Individual Income Tax: Progressive 0-35%

VAT: 19%

Corporate Income Tax: 12.5%

Employer & Employee Social Security Contributions: 22.9% (employer) – 10.95% (employee)

Capital Gains and Withholding Taxes: N/A

Cyprus Individual Tax – Single, Married
An individual’s liability to pay income tax is determined by their residency status as well as the source of their income. Residents are taxed on their worldwide income, whilst non-residents are only taxed on certain types of income derived from sources in Cyprus.

Individuals are taxed on their employment income, including bonuses and certain employment benefits. However, they are not taxed on reimbursements for business travel and business entertainment expenses.

The current tax return system is based on self-assessment – individuals can file tax returns via the online tax authority platform known as Taxisnet and can amend them as necessary. A claim for deductions and allowances (IR59) is prepared at the beginning of the tax year, and this must be accompanied by a statement of taxable income (IR63), along with the tax return.

To be eligible for this system, you need to register for a taxpayer’s identification code.

Personal Income Tax in Cyprus is progressive, based on the amount of income an individual has earned:

  • 0 – tax rate 19,500: 0%
  • 19,501 – 28,000: 20%
  • 28,000 – 36,300: 25%
  • 36,301 – 60,000: 30%
  • 60,000+ : 35%

Personal Income Tax is withheld from the individual’s salary every month by their employer. An individual is also required to pay social security contributions – they must be withheld by employers and paid to the Social Insurance and National Health Funds by the end of the following month.

Special Defense Contribution Tax

Individuals are also required to pay contributions to a Special Defense Contribution Fund, or SDC. This applies to most types of dividends, interests, and rental income which are earned by individuals who are both tax residents and Cyprus domiciled. These rates are as below:

  • Dividend – 17%
  • Interest – 30%
  • Rental Income – 2.25%

Tax Returns are due by the 31st of July of the following tax year. The employer is obligated to withhold income tax for their employees’ income. However, if an individual is earning other income which is not subject to withholding tax, payments of taxes are to be paid in 2 equal instalments – 31 July and 31 December within the same tax year.

Taxable income and liabilities should be determined and declared in euros.

In the case of married couples, both individuals are to be taxed separately.

Non-residents in Cyprus are taxed on Cypriot-sourced income and are also obliged to file tax returns on them.

Cypriot Entity Set Up

When expanding into another country with little familiarity with how incorporation is done, setting up is met with many requirements and complexities. In Cyprus, foreign subsidiary entities act as an extension of the parent company but enjoy the same company standing as domestic businesses, and are subject to all national laws.

The registration process in Cyprus comes with some variation (depending on the company type), but it is generally straightforward and can be done with little difficulty. Once that is done, however, setting up a subsidiary entity in Cyprus involves a heavy workload.

Processing company and employee taxes, filing accounts, complying with the local laws, managing the local workforce, and recruitment are all important matters for a business that must be managed effectively, which can eat up your time, money, and resources.

You can lighten this load by partnering with Bradford Jacobs, an Employer of Record (EOR) company. We use our Professional Employer Organisation (PEO), international recruitment specialists, to obtain your new personnel, and our EOR experts handle all legal and compliance requirements.

Instead of the costs, delays and complications met going solo, use our services and be up-and-running with a presence in your new territory within days, rather than months

How to set up a Cypriot Subsidiary

Setting up a subsidiary requires these steps:

  • Decide on the company type that suits the nature of your business, your business goals, and matches your own capabilities to meet established requirements.
    Common company types include: Private Limited Liability Company, Public Company Limited by Shares, Company Limited by Guarantee, Partnership Companies, Sole Proprietorship, Branch Office, Representative Office
  • Obtain a business address in Cyprus and prepare the documents for registration.
  • Obtain a business license with the Trade Register and register with the Customs Authorities (if required).
  • Submit the company name for approval from the Registrar of Companies.
  • Prepare the appropriate registration documents and have them translated into Greek or English (depending on the document types).
  • Open a local bank account in Cyprus and deposit the appropriate share capital.
  • Notarize and legalize the registration documents at a notary’s office.
  • Register your company at the Registrar of Companies.
  • Register with Cyprus’ Inland Revenue Department.
  • Register for a VAT Number.
  • Public registration of directors and shareholders with the Registrar of Companies.
  • Receive Certificates of Incorporation, Shareholders, Directors and Secretary, and Registered Office Address.
  • Register with the employer for social insurance services.
  • Publish the incorporation in the official gazette.

Benefits of setting up a Subsidiary in Cyprus

Cyprus is a compelling destination in the Mediterranean for the subsidiary establishment and growing a business’ influence. There are also other significant benefits to establishing an entity in Cyprus:

  • Subsidiaries in Cyprus are taxed the same as any other resident company.
  • Subsidiary entities in Cyprus also benefit from over 60 double taxation treaties, making the country an investor-friendly tax regime with an extensive network.
  • Cyprus boasts a strong services sector, including tourism, which contributes to over 80% of the country’s GDP and employs over 70% of its workforce. Other strong sectors include industry, construction, and agriculture.
  • Cyprus benefits from one of the lowest tax rates in Europe, with no taxes on dividends.
    Cyprus also benefits from low administration and labour costs.
  • Cyprus boasts a highly educated workforce with a low-cost business environment.

Cyprus’ well-established infrastructure, with multi-purpose deep-sea ports, international airports, and excellent telecommunications, gives entities a variety of quality logistics options to access markets easily and affordably to the rest of Europe, the Middle East, and Africa.

The Cypriot Market

Foreign companies who wish to expand into Cyprus will be met with a highly educated workforce, attractive tax incentives and reasonable regulations, a hub for tourism, information technology, shipping and fintech companies, and a variety of business incentives with the state. Cyprus’ geographical position benefits from international access to diverse marketplaces in the EU, Africa, and Asia. With both a strong services sector and a growing manufacturing sector specializing in metalworks, information technology and electronics, as well as high-quality logistics and infrastructure, this creates an attractive environment for any business owner who seeks to expand their business.

However, setting up a shop in an unfamiliar place comes with its own challenges. Foreign businesses must comply with employment, tax, payroll, and corporate legislation whilst ensuring that their employees are working productively and efficiently.

Starting a business in Cyprus

To start a business in Cyprus you must go through a company registration procedure, which is straightforward and designed to be executed easily. These steps can be done online or in person through the Registrar of Companies office.

The necessary steps to start a business in Cyprus include:

  • Obtain a business address in Cyprus and prepare the documents for registration.
  • Obtain a business license with the Trade Register and register with the Customs Authorities (if required).
  • Appoint a company secretary for incorporation.
  • Submit the company name for approval from the Registrar of Companies.
  • Prepare the appropriate registration documents and have them translated into Greek or English (depending on the document types).
  • Open a local bank account in Cyprus and deposit the appropriate share capital.
  • Register your company at the Registrar of Companies.
  • Register with Cyprus’ Inland Revenue Department.
  • Register for a VAT Number.
  • Register with the employers’ register for social insurance services.
  • Publish the incorporation in the official gazette.

Once the incorporation has been approved, the founders will receive Certificates of Incorporation, Shareholders, Directors and Secretary, and Registered Office Address.

Expanding Business into Cyprus

Foreign entities wishing to expand into Cyprus will be met with a thriving, services-based economy with one of the lowest corporate tax rates in Europe and in the EU, a number of business incentives by the state, a highly-qualified talent pool and attractive labour and administrative – which is provided to all entities that enter the market.

Cyprus’ location in the Mediterranean acts as a bridge between the West and East and is at a crossroads between 3 continents – Europe, Africa, and Asia. It can also be seen as a gateway for investments in and out of the EU. The country’s position also offers easy trade between continents, with the help of strong infrastructure – it possesses a global shipping power, international airlines, and telecommunications.

Cyprus boasts a strong services sector and a thriving tourism industry, which contributes almost 80% to the country’s GDP, and employs more than half of the country’s workforce.  However, the country also does quite well in the industry and construction sectors.

Expanding one’s business into Cyprus creates a lot of opportunity for expansion both nationally – particularly to popular district capitals such as Famagusta, Kyrenia, Larnaca, Nicosia and Paphos, which are popular tourist and commercial destinations – and internationally.

Cyprus Business Facts

  • Capital City – Nicosia
  • Population – 1,215,671
  • Cities – Famagusta, Kyrenia, Limassol, Larnaca, Paphos, Achna, Akaki, Bellapais, Chirokitia, Dali, Fyti, Gerakies
  • Official language(s) – Greek, Turkish
  • Economy/GDP (2020) – $35.531 billion (PPP)
  • World Ranking (Ease of Doing Business) – 54th
  • Leading sectors – tourism, food and beverage processing, textiles, ship repair and refurbishment, light chemicals, metal products, wood products, stone products, clay products, cement, and gypsum
  • Main exports – ships, boats, and floating structures; mineral fuels; pharmaceutical products; dairy produce, eggs, and honey; electrical machinery and equipment; organic chemicals; vegetables, beverages, and spirits; nuclear reactors, boilers, and machinery.
  • Main imports – Oil and mineral fuels; ships and boats; motor vehicles and parts; industrial machinery; electrical machinery; pharmaceuticals; plastics; iron and steel; beverages; furniture
  • Main trading partners – Greece, Netherlands, United Kingdom, United States, Norway, Germany, Israel, Hong Kong, China, France, Italy, South Korea
  • Government – Unitary presidential constitutional republic
  • Currency – Euro

Advantages and Challenges of the Cypriot Market

The Cypriot market has a variety of significant advantages:

  • Low costs of doing business: Cyprus benefits from low labour and business costs, and a high quality-to-cost ratio.
  • Competitive tax system: Cyprus boasts one of the lowest tax rates in Europe, as well as attractive tax incentives due to double tax treaties.
  • Educated workforce: Cyprus’ workforce is highly educated and skilled, with several local universities ranking internationally for their performance in education. Cyprus also has the second-highest tertiary educational attainment rate in the EU, at 57.1%.
  • Language: Due to the multicultural workforce most workers are multilingual, but the main language for business in Cyprus is English.
  • Ranking: Cyprus ranks high in the Ease of Doing Business Survey regarding the ease of paying taxes. Currently, Cyprus ranks 29th of the 190 countries for tax payments.
  • Logistics: Cyprus’ location in Europe offers access to markets across 3 different continents, with high-quality logistics options such as its deep-sea ports and international airports.
  • EU Benefits: Cyprus is a full member of the EU and has access to the largest single market in the world. Thus, businesses in Cyprus also benefit from access to the EU market, as well as incentives and benefits from being part of a member country.

The biggest challenge facing the market in Cyprus currently is the effects of COVID-19, like many other nations in the EU and around the world. Other challenges are the economic constraints due to the de facto division between Northern Cyprus which is under Turkish rule, and the rest of the island that is under Greek rule; the recovering financial system; and high administrative burden and bureaucracy.

Limited Company / Subsidiary or Branch in Cyprus?

In Cyprus, a subsidiary entity is considered a legally separate entity from the parent company, with independent administration and management, which provides freedom to explore the local market and create international credibility.

A branch, however, does not have any independence from the parent company – but it is taxed and reported similarly to resident entities, and is limited in its commercial activities.

Cyprus Contracts

If a foreign company is looking to hire resident employees as part of their Global Expansion into Cyprus, they must comply with recruitment regulations such as tax, social security contributions and local employment laws, as well as collaborate with or adhere to any collective bargaining, trade unions or work council agreements.

In Cyprus, employment agreements are determined in written employment contracts, although it is not mandatory by law. There are two types of employment contracts – the indefinite contract and the fixed-term contract.

National legalisation and collective agreements are the main sources of employment law in Cyprus, which govern employment conditions, benefits, and health and safety regulations. The conditions performed vary according to the industry and sector.

Labour law in Cyprus ensures the protection of both the employer and the employee. The employment relationship and its terms are hierarchically determined by the national Constitution, international laws with the EU, local labour law, collective bargaining and agreements, employment rules and business practices, and lastly, the individual employment contract.

Employment Contracts in Cyprus

In Cyprus, an employment contract is not required to be concluded in writing, but the law does oblige the employer to provide the employee with an agreement that must be signed by both parties and include specific information regarding the terms of their employment:

  • Personal/contact information about both parties
  • The registered address of the business and the employee’s place of work
  • The employee’s position and position and work duties
  • The contract’s start date and its duration (if a fixed-term contract)
  • Notice periods
  • Annual leave entitlement
  • All payments the employee is entitled to and their payment schedule
  • Working times for the employee’s working days and weeks
  • Application of collective agreements, if applicable

However, if employment contracts are used, there are two types of contracts that are applied in Cyprus:

  1. Indefinite employment contract – the standard type of employment contract in Cyprus, which is used for indefinite employment.
  2. Fixed-term employment contract – not as widely practised, but still used in Cyprus, and only for a specific period. This type of agreement must be agreed to by both parties.

The employer must inform the employee of any changes to the employment agreement’s terms and conditions within 1 month of the changes being made. If the employer wishes to amend the employment terms, they must discuss and agree to the changes with the employee before doing so. However, in the case of worsening employee conditions after the amendments, an employee can claim enforced resignation and take the matter to the Industrial Disputes Tribunal.

Collective Agreements

Collective bargaining and agreements in Cyprus are widely practised. In the public and semi-public sectors, coverage by collective agreements is close to 100%.
Collective bargaining in Cyprus takes place both at the industry level and company level.
Workers are not obligated by law to be represented by one or more trade unions, but it is common for certain industries to be represented by trade unions as well as have collective agreements in place to regulate the employment status of the workers. The main industries that are represented include the building industry, transport sector, hotels, dockworkers, maritime workers, and farmers.

Whilst industry-level collective agreements continue to maintain their importance, many companies (both inside and outside the coverage of the industry-level agreements) negotiate at the company level.

Employee Benefits

When expanding your company’s presence in a new country, you need to ensure compliance both in your employment contracts and benefit guarantees. These involve social security contributions, sick leave, health insurance, and unemployment, to name a few. In Cyprus, benefits are guaranteed by national legislation as well as collective agreements with trade unions or workers’ councils.

As an employer, it is vital to understand what is guaranteed, as well as what can be open to negotiation when expanding into new territory. This is where Bradford Jacobs, a Professional Employer Organisation (PEO) with years of expertise and knowledge on all facets of employment in Cyprus, can step in and help you out.

Our guide will explain what benefits and employee compensation are guaranteed, and what can be modified, for any employer who wishes to expand their business into the bridge between Europe, Africa, and Asia.

What Compensation Laws exist in Cyprus?

In Cyprus, compensation laws are set by national legislation, but the types of compensation can vary according to the sector the employees are in, regulations of collective agreements, and the internal regulations of the company.

For example, there is a 13th-month payment in Cyprus, which is optional, and is paid as a yearly bonus – other employee bonuses are also negotiated between the employer or employer when the contract is being drawn up and signed.

There are, however, benefits and/or compensation that are guaranteed by national legislation:

  • Minimum wages: There is no national minimum wage for workers in Cyprus. However, there are minimum wages set for certain occupations, which are issued by the Ministerial Council and come into force every April.
  • Work Hours and Breaks: Employees are entitled to a rest break of 15 minutes when the working day is over 6 hours, and during the break, the worker may leave the workstation.
  • Sick Leave and Payments:  Employees are entitled to a statutory sick leave benefit from Social Insurance. However, it is optional for an employee not to be compensated for the first three days of sickness. After the three days have passed, they may file an application to the Ministry of Labor, Welfare, and Social Insurance to receive a sickness benefit. In practice, employers often agree with their employers to receive several days of paid sick leave, even though they are not legally obliged to do so. The employers have a choice to pay for the first few days of sick leave (normally three) or cover the remaining percentage of the sickness benefit after the first few days have passed. Employees may be compensated for a maximum of 156 days, during a single period of employment. The rate of sickness benefits is equal to a percentage of the weekly average earnings of the employee, and the rest is paid by the employer.
  • Holiday and Vacation Leave: Employees are also entitled to paid leave for public holidays (which are normally between 14 and 17), as well as paid annual leave, which depends on the number of working days during the week. Employees working a five-day week are entitled to at least 20 days of paid annual leave a year, whilst employees working a six-day week are entitled to at least 24 days of paid annual leave a year.
  • Maternity Leave: Maternity leave is 18 consecutive weeks, which can start from 6 weeks before the estimated date of birth. In the case of the delivery of a second child, the duration of maternity leave extends by another 4 weeks, and in the case of the delivery of two or more children, it is extended for another 4 weeks. The salary and insurance contributions are normally paid by the Social Insurance Fund and are equal to 72% of the employee’s salary. If the mother is the head of the family and has more than one dependent, the contributions are increased to 80% or 90%. When the mother goes back to work, she is entitled to a shift reduction of one hour per day for the first 9 months after the date of birth.
  • Paternity Leave: Paternity Leave in Cyprus is 2 weeks between the week of childbirth and the following 16 weeks, or between the week of confinement and the end of maternity leave in the case of multiple births.
  • Parental Leave is also practised in Cyprus. Any parent with a child under 8 years old is eligible for 18 weeks of unpaid parental leave, per child. In the case of a widower/widow, they are entitled to parental leave of 23 weeks. Parents are allowed to transfer about two weeks of parental leave to the other parent if they have taken a minimum of two weeks themselves. Parental Leave can be taken for a minimum of one week to a maximum of five weeks per calendar year. In the cases of 3 children or more, this is increased to a maximum of 7 weeks.
  • Unemployment: An unemployed person is eligible for compensation if they have paid social insurance whilst employed, as well as registered themselves as unemployed with the local district office, and as a jobseeker with the Public Employment Service. They are entitled to a maximum of 156 days of unemployment benefits, which depends on the insurance type, as well as how much has been contributed.

Social Security in Cyprus

Social security contributions in Cyprus are settled through the employee’s salary, where social security contributions are withheld from the salary every month and paid to the tax authorities, as well as the employer’s own monthly contributions.

An employee must contribute a rate of 10.95%, which is split into social insurance and health insurance contributions, whilst an employer the contribute 22.9% of an employee’s salary, which is split into six types of contributions.

Employer’s Contributions

  • Social Insurance (8.3%)
  • National Health Insurance (2.9%)
  • Social Cohesion (2.0%)
  • Redundancy (1.2%)
  • Training & Development (0.5%)
  • Holiday Fund (8.0%)

Employee’s Contributions

  • Social Insurance (8.3%)
  • National Health Insurance (2.65%)

Cyprus Top Talent

Recruitment can be a tricky business, especially when a company is venturing into unfamiliar countries and exploring new markets. This is the perfect occasion to bring in a specialist to oversee the process for you – Bradford Jacobs’ expertise and over 20 years of experience in international recruitment services are indispensable for expansion into Cyprus.

Our comprehensive knowledge of all Cypriot employment sectors and understanding of the culture and customs guarantee an untroubled transition.

The Recruitment Process in Cyprus

A foreign company expanding into Cyprus does not require the assistance of a local entity to hire their employees. It is, however, vital to your recruitment efforts to know where you can find the right talent and which local and international employment organizations they can collaborate with to access the right talent pools. This, however, does not come easily – and once the right employee is found, the employer must follow thorough staffing and registration procedures. These include:

  • Registering with Cyprus’ Tax Department for a taxpayer’s identification code
  • Registering with the Social Insurance Foundation to pay social security contributions
  • Registering with the National Health Insurance System
  • Registering employees with the Department of Labour
  • Creating employment contracts and translating them to Greek or English
  • Applying for employees’ employment invitations and work permits
  • Applying for employee’s visas or special expatriation status (if applicable)
  • Calculating employees’ monthly salary and creating payslips.
  • Researching for any available tax-free allowances or benefits.
  • Submitting wage tax returns and national insurance forms.
  • Corresponding with the involved parties (organizations, trade unions, etc.)
  • Creating annual accounts, financial administration, and year-end statements.
  • Creating a payment schedule for wage tax, national and social insurance, and net wages.

Legal Checks on Employees in Cyprus

When commencing the recruitment process in a foreign country, employers must consider their legal obligations regarding personal information. Cypriot law follows EU law, which requires employers to ensure equal treatment of employees in the workplace and protect them against discrimination based on characteristics such as race, nationality, gender, sexual orientation, religion, age, disability, etc.

This law also includes background checks, which are only considered fair and legal if they relate directly to a job and are necessary for reaching a decision on recruitment. Following the Data Protection Directive 95/46/EC and the General Data Protection Regulation (Regulation (EU) 679/2016) (GDPR) put in place by the EU, these background checks may only be carried out with the consent of the candidate.

Nevertheless, employers recruiting in Cyprus may ask for the following checks (following certain conditions):

  • Criminal background checks: The criminal background of a candidate may only be asked for if it is relevant to the work of the job position and must be provided with the consent of the employee.
  • Health checks: Employers are prohibited from discriminating against employees based on their physical and/or mental disabilities unless specific requirements for the job cannot be met. Health checks are allowed if they are used to ensure the capability of the candidate for the accomplishment of specific duties in a profession.
    With regards to non-EU nationals, the employer must provide proof of the employee’s medical health through several medical examinations, which include a chest x-ray and blood tests, to obtain a work permit.
  • Reference and educational checks: Often done in practice, to assess a candidate’s suitability regarding work performance.
  • Immigration compliance

Basic Facts on Hiring in Cyprus

  • Cyprus is a politically unique country, which has two distinct areas – one Greek, and one Turkish – that operate independently (partially) of each other.
    These major political and cultural differences between the two areas need to be factored into your recruitment efforts to avoid cultural insensitivity or cultural disputes.
  • An employer’s questions during an interview are regulated and restricted by EU data legislation – they must directly relate to job specifications and requirements.
  • Terms and conditions of employment in Cyprus are regulated by national legislation, as well as trade unions and collective agreements.
  • For onboarding employees, you will need the following documentation: A social security number, a tax identification number, a work permit, and a residence permit if an employee is a non-EEA national.
  • Employers must follow EU anti-discrimination laws throughout the process of recruitment, which prohibits discrimination based on race, religion, language, sex, political worldview, social class, national or social descent, wealth, age, sexual discrimination, disability, etc.
  • Collective agreements are the main method in Cyprus through which the terms and conditions of employment are met. These agreements are usually valid for two or three years, but the validity is negotiable.
    Collective bargaining takes place at the industry and company levels, and key industry-level collective agreements in the private sector cover hotels, metalworking industries, oil, and construction.
    There is also widespread collective bargaining in the public and semi-public sectors, and coverage is close to 100%.
  • Administration and enforcement of employment requirements are governed by The Ministry of Labor, as well as District Labor Relations Offices.
  • In Cyprus, employment contracts are not obliged to be in writing. However, employers must provide the employee, in writing, with specific information regarding the terms of their employment.
  • Standard employment contract types include indefinite contracts, as well as fixed-term contracts.
  • The standard working time is 8 hours a day and 40 hours a week, but this can be altered according to the type of employment contract and work.
  • Employers must at least meet the minimum wage for the employee’s salary, but the average monthly salary may differ according to the industry and sector.
  • Overtime work cannot exceed a maximum of 2 hours daily, and 8 hours weekly. Any employee who works overtime should receive a supplement of no less than 150% of their hourly rate (200% during the weekends and holidays), or fully paid time off for no less than the amount of overtime that has been worked.
  • In a week, employees are entitled to 2 rest days.
  • Employers are obligated to withhold and pay employees’ personal income tax and social security contributions monthly.
  • The notice period for employment termination is one month depending on the employment contract:
  • 6 months – 1 year: 1 weeks notice
    • 1 year – 2 years: 2 weeks’ notice
    • 2 years – 3 years: 3 weeks’ notice
    • 3 years – 4 years: 4 weeks’ notice
    • 4 years – 5 years: 5 weeks’ notice
    • 5 years – 6 years: 6 weeks’ notice
    • 6 years – 7 years: 7 weeks notice
    • 7 years +: 8 weeks notice
  • The probationary period in Cyprus is a minimum of 6 months, and can extend for up to two years, provided that both the employer and employee agree and that the terms and conditions are written in the employee contract.
  • Terminating employment during the probationary period may be done immediately and without justification.

Work Culture

To succeed in business in Cyprus, it is vital to have a strong understanding of the country’s business culture. Cypriot business culture is modernizing and adapting to ongoing changes in Western society, placing importance on both the work of management and the employees.

Punctuality, directness, trust, and personal relationships are significant to the development of business relationships in Cyprus. Local businessmen place great importance on their relationships; thus, it is important for both you and your local business partners to treat business dealings with respect and great care.

There has been increasing awareness around the world of the importance of work-life balance and flexible working times – but Cyprus, like many, still regards office etiquette to be of great importance to the management of business and business relations. Here are some tips and tricks to use during your first few months:

  • Punctuality: In Cyprus, punctuality is very important, and expected – although your Cypriot business partner will most likely arrive late. Appointments must be arranged in advance through formal request, agreeing on a time and date and confirming your attendance in writing.
  • Languages: Most Cypriots speak Greek, but English is also widely spoken and is considered the primary business language in the country.
  • Business Relationships: Most Cypriots prefer face-to-face contacts such as meetings, rather than telephone conversations or email. The building of personal relationships with business partners is an important aspect of their business culture, and Cypriot business partners value respect, personal trust, and hospitality.
  • First Contact: First contact with a Cypriot business partner should be done directly by email or by telephone to arrange a place and time for a meeting.
  • Introductions/Greetings:  In an introduction, business cards should be produced in both Greek and English, and exchanged with your business partner, in order to show an appreciation of their culture. During the first meeting, a brochure or other promotional material from your company should also be given.
  • Gift-giving: small gifts are generally well-accepted by Cypriot business partners. Gifts that are useful for the office such as small corporate gifts that are branded with your company logo are great ideas. Gifts are generally not opened when they are received. If your Cypriot business partner invites you to their home for a meal, you should also take a small gift such as pastries or flowers. However, avoid white lilies, as they are associated with funerals.
  • Dress code: The dress code in Cyprus is the same as in most European countries – conservative clothing and formal business attire, such as a dark-coloured suit and tie for men and a skirt or pantsuit for women.
  • Formality: Business partners should be addressed formally – using their professional titles, Mr. or Ms., and their surname. Once the relationship has become more personal, your business partner will invite you to use their first name.
  • Meetings: The agenda of business meetings is not closely adhered to and serves more as guidelines. Cypriots also conduct very animated business meetings. Multiple conversations may occur at once. Expect many interruptions and tangents of conversation. Be patient and feel free to interrupt to be heard – interruption is not considered rude in the local business culture. It is also common for meetings to progress slowly and run several hours overtime.
  • Negotiations: Bargaining and bartering is common practice in Cyprus, so it is best to expect negotiations during agreements.
  • Communication: Cypriots have a direct communication style – speaking honestly, clearly, and explicitly to make their point. However, communication is not concise – conversation tends to be very drawn out. Criticism is delivered vaguely to avoid offence and remain polite with business associates, but their intention and meaning are usually clear.

Cyprus’ Minimum Wage

There is no statutory minimum wage in Cyprus. However, there is a minimum wage rate that is required, depending on the vocation or the residency of the worker:

  • EUR 870 per month that is required for shop assistants, nurses’ assistants, clerks, and hairdressers, which rises to EUR 924 per month after probation.
  • EUR 425 per month, as well as food and board, are provided for asylum seekers that work as unskilled workers in the agricultural sector.
  • EUR 767 per month is required for skilled workers in the agricultural sector, with accommodation and food not provided.

Pay rates are agreed to in direct negotiation with the employer or through collective bargaining

Probation Periods in Cyprus

In Cyprus, the statutory probation period is 6 months. During this period, an employer may dismiss an employee without cause. After the probationary period expires, an employee must be dismissed with cause and notice, and employees are entitled to request their annual leave.

The probationary period may be extended to up to 2 years, as long as there is a written agreement that is signed by both the employer and employee stating this at the beginning of the employment

Working Hours in Cyprus

The number of working hours in Cyprus during a five-day working week should not exceed a maximum of 48 hours a week, including overtime. However, this also depends on the sector. Normal working hours are 8 daily and 38 hours a week.
In, Cyprus, the standard working hours are 8:30-5:30. This, however, will depend on the type of work establishment and sector.

Overtime in Cyprus

Overtime work in Cyprus cannot exceed 2 hours daily or 8 hours a week. Overtime work must be paid with a 150% wage rate and a 200% wage rate for weekends and holidays.

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