Cyprus is an island republic in the eastern Mediterranean Sea, south of Turkey. It is the third-largest and third-most populated Mediterranean island, located south of Turkey and west of Syria. Nicosia is the country's capital and biggest city.
Human activity on the island goes back to roughly the 10th millennium BC. This period's archaeological remnants include the well-preserved Neolithic settlement of Khirokitia, and Cyprus is home to some of the world's earliest water wells. In the second millennium BC, Mycenaean Greeks inhabited Cyprus in two waves. As a strategic position in the Eastern Mediterranean, it was afterward held by various important nations, including the empires of the Assyrians, Egyptians, and Persians, from whom Alexander the Great captured the island in 333 BC. Following Ptolemaic Egypt, the Classical and Eastern Roman Empires, Arab caliphates for a brief time, the French Lusignan dynasty, and the Venetians, Ottoman dominance lasted almost three centuries, from 1571 to 1878. (de jure until 1914).
Cyprus was administered by the United Kingdom under the Cyprus Convention in 1878 and officially acquired by the United Kingdom in 1914. The island's future became a source of contention between the island's two most populous ethnic groups, Greek Cypriots (77 percent of the population in 1960) and Turkish Cypriots (18 percent). The Greek Cypriot people advocated enosis, or unification with Greece, beginning in the nineteenth century and becoming a Greek national policy in the 1950s. The Turkish Cypriot population first supported the British administration, then wanted annexation of the island to Turkey, and in the 1950s, allied with Turkey, launched a Taksim strategy, partitioning Cyprus and establishing a Turkish republic in the north. Cyprus gained independence in 1960 as a result of nationalist unrest in the 1950s. The 1963–64 crisis resulted in greater intercommunal violence between the two communities, the displacement of almost 25,000 Turkish Cypriots into enclaves, and the termination of Turkish Cypriot participation in the republic. In an attempt for enosis, Greek Cypriot nationalists and parts of the Greek military junta tried a coup on July 15, 1974. This action triggered the Turkish invasion of Cyprus on July 20, resulting in the acquisition of the current area of Northern Cyprus and the displacement of about 150,000 Greek Cypriots and 50,000 Turkish Cypriots. In 1983, a distinct Turkish Cypriot state was founded in the north by unilateral proclamation; the action was severely criticized by the international community, with only Turkey recognizing the new state. These events, as well as the resultant political position, are still a source of contention.
With the exception of the Sovereign Base Areas of Akrotiri and Dhekelia, which remain under the administration of the UK by the London and Zürich Agreements, the Republic of Cyprus enjoys de jure sovereignty over the whole island, including its territorial seas and exclusive economic zone. However, the Republic of Cyprus is de facto divided into two parts: the area under the Republic's effective control, which is located in the south and west and accounts for approximately 59 percent of the island's area, and the north, which is administered by the self-proclaimed Turkish Republic of Northern Cyprus and accounts for approximately 36 percent of the island's area. The UN buffer zone covers about 4% of the island's surface area. The international world regards the northern portion of the island as Republic of Cyprus territory held by Turkish soldiers. Since Cyprus became a member of the European Union, the occupation has been considered unlawful under international law and amounts to the illegal occupation of EU territory.
Cyprus is a popular Mediterranean vacation destination. The Republic of Cyprus has been a member of the Commonwealth since 1961 and was a founding member of the Non-Aligned Movement until it joined the European Union on 1 May 2004. It has an advanced, high-income economy with a very high Human Development Index. The Republic of Cyprus joined the eurozone on January 1, 2008.
Employees who serve a 5-day work week are entitled to 20 days of paid vacation, and those who work a 6-day work week are entitled to 24 days.
Cyprus recognizes 14 public holidays.
Except in particular cases where there are applicable legislation in force or where it is given in the work contract, sick leave and its reimbursement are not subject to laws. Sick compensation begins on the fourth day of leave under social security law.
Female workers are entitled to 18 weeks of maternity leave, which is extended to 22 weeks for twins and 26 weeks for at least three births. During this time, the employee is paying 72 percent of his or her wage by the state.
Fathers are entitled to a total of 16 weeks of paternity leave, of which two weeks must be taken within 16 weeks of the child's birth.
Parents are entitled to up to 18 weeks of annual maternity leave for childcare before their child hits the age of eight.
The employment agreement should specify the procedure for terminating employment.
The length of employment determines the notice period. Between 26 and 51 weeks of work, there will be a one-week notice period. Between 52 and 103 weeks of work, there will be a two-week notice period. For jobs lasting between 104 and 155 weeks, there will be a four-week notice period. For positions lasting 156-207 weeks, there will be a 5-week notice period. For jobs lasting between 208 and 259 weeks, there will be a six-week notice period. For jobs lasting between 260 and 311 weeks, there will be a 7-week notice period. Employees who have worked more than 312 weeks will be given an 8-week notice period. Only if the employee has committed a serious offense is there an exception. The notice time must be communicated in writing.
The common practice is 6 months to 2 years and must be outlined in the employment agreement.
Severance pay is calculated based on the duration of employment. If an employee has worked for the company for up to four years, he or she is entitled to two weeks' compensation for each year worked. Each year, individuals with a five- to ten-year service history receive 2.5 weeks' salary. Employees with 11 to 15 years of service receive three weeks' compensation for each year. Employees with 16 to 20 years of service receive 3.5 weeks' pay for each year. Finally, employees who have worked for the organization for more than 20 years are entitled to four weeks of pay per year.
The standard workweek is forty hours spread over five days, but a six-day workweek is possible. Throughout the summer, many businesses open at 8 a.m. or 8:30 a.m. and remain open until 6 p.m. or 7 p.m., with a noon break in the middle of the day. Employees may not work more than 48 hours per week without the employee's consent, and work beyond 40 hours requires the employee's consent.
Over a one-month period, work at night (from 11 p.m. to 6 a.m.) may not exceed an average of eight hours out of 24. Employers who employ night workers on a regular basis must notify the Ministry of Welfare, Labor, and Social Insurance in writing and must provide night workers with medical examinations at the employer's expense prior to beginning night work to ensure their health. Additionally, the employer must ensure that night workers are examined on a regular basis while they continue to work at night.
Numerous workers in Cyprus are covered by collective bargaining agreements (probably half or more, although no official figure is available), and these agreements may specify specific working hours.
Overtime and other non-standard work arrangements are typically governed by a collective bargaining agreement, or if no collective bargaining agreement exists, the rate is typically negotiated between the employer and employee. Statutes apply in certain industries.
Cyprus's compensation legislation is devoid of a national minimum wage. However, some sectors establish their own minimum wage rates, or employers must bargain directly with employees. Currently, the minimum wage is set at 870 euros per month for certain types of assistants and hairdressers, 425 euros per month for unskilled agricultural workers, and 767 euros per month for skilled agricultural workers.
Cyprus provides universal health care, and individuals who are not insured by the government system may utilize public medical facilities for a fee.
Medical benefits are income-based. Benefits that are frequently given include a provident (pension) fund, health insurance, parking, a vehicle allowance, a gym allowance, a food allowance, and a phone allowance.
Corporate taxation is imposed at a rate of 12.5%. There are many deductions available, including interest, the cost of acquiring other businesses, and the employer's contribution to social security.
Income tax is levied on a progressive rate. Current brackets vary from 0% to 35% in the tax rates for 2014. Furthermore, various tax allowances apply for trade union fees, donation to charities.
For an income, between €0 and €19500, the tax rate is 0%.
For an income between €19500 and €28000, the tax rate is 20%.
For an income between €28000 and €36300, the tax rate is 25%.
For an income between €36300 and €60000, the tax rate is 30%.
For an income in excess of €60000, the tax rate is 35%.
Employment earnings are also subject to a variety of social security payments. Contributions are subject to a cap; for 2014, the maximum amount of insurable earnings is €54396 per year. Employees contribute 7.8 percent of their salary, while businesses contribute 11.5 percent.
The majority of sales of goods and services are subject to VAT. In 2014, the standard rate is 19 percent, up from 17 percent in 2013. Groceries, books, and lodging services are taxed at a reduced rate of 9%. Cyprus's VAT is a component of the European Union's value-added tax system. VAT is not levied on some products and services. This covers exports, financial services, and rent, among other things.
Employers of foreign nationals in Cyprus have various alternatives under the Cyprus immigration system. Cyprus is a member of the European Union. The requirements, processing dates, work eligibility, and perks for accompanying family members differ depending on the kind of permission.
If they are not visa-exempt due to their nationality, business travellers must get a business visa to go to Cyprus. Business trips are restricted to 90 days in 180 days and must be accompanied by a written support or invitation letter explaining the type and length of activity.
The two main work authorization categories are the EU Intracompany Transferee (ICT) Permit, which is appropriate for the intracompany transfer of managers, specialists, and trainees from outside the EU, and the Employment Permit for Local Hires, which is appropriate for locally hired employees and intracompany transfers who do not qualify for an EU ICT Permit.
An employment contract does not have to be in writing, but it is always a good idea to have one. If it is not indicated in a written contract, the employer must reveal certain facts to the employee in writing within 30 days of the commencement of work.
In Cyprus, employment contracts are often either indefinite or for a certain period of time. A fixed-term contract may not be for more than 30 months, and a series of fixed-term contracts may not be for more than 30 months. If the employee stays with the company for more than 30 months, the contract immediately turns to an indefinite contract.
In addition to the contract duration, there is a six-month statutory probation period. This term may be extended to two years if both the employer and the employee agree in writing when employment starts.
Euro (EUR)
Do you understand the variables that influence how to set up a Cyprus subsidiary? Location and company activity are the two most significant factors to consider. The sort of Cyprus subsidiary legislation you must follow will be determined by your location. For example, incorporating in one city may result in more difficult-to-follow incorporation regulations, but incorporating in the next city may be more advantageous. If you need assistance locating the correct place, talk with a consultant, lawyer, or expert.
Following that, you should discuss your intended company activities, which may influence your entity selection. Companies in Cyprus may incorporate as a corporation, branch office, or representative office. Many firms choose to organize as a corporation because it provides the greatest amount of independence and flexibility. Businesses that just need to undertake a few operations, on the other hand, may choose a branch or representative office.
The following stages are included in the Cyprus subsidiary establishment procedure for a corporation, commonly known as a limited liability company (LLC):
(1) Obtain permission to use a business name.
(2) Hire a lawyer to draft the memorandum and articles of incorporation.
(3) Submit papers to the Companies Sector of the Registrar of Companies and Official Receiver's Department.
(4) Become a member of the Cyprus Inland Revenue Department.
(5) Make sure you have a tax identification number.
(6) Make a VAT registration.
(7) Registry with the social insurance services employers' register.
Corporations are classified into two types: limited liability companies (LLCs) and public limited companies (PLCs). The most frequent kind of entity is an LLC, which has the most advantageous Cyprus subsidiary legislation. It, for example, has no minimum or maximum share capital restrictions. You will, however, need between one and fifty members who will contribute your own share capital.
LLCs must be handled by at least one director and one secretary who do not have to be Cyprus residents. If you just have one member, that individual may serve as both the director and the secretary. You may use your memorandum of association to demonstrate that directors have limitless culpability for the company's debts and responsibilities.
