CYOperating in Cyprus
Payroll, accounting, employment, immigration, entity setup, and corporate compliance managed locally through a single international coordination model.
Request a country assessmentThe regulatory landscape
Cyprus applies a 15% standard corporate income tax rate as of 1 January 2026 (up from 12.5%, unchanged since 2013), alongside a 19% standard VAT rate and employer social contributions of roughly 15.4% of gross salary across Social Insurance, GESY (the national health system), the Social Cohesion Fund, the Redundancy Fund and HRDA. A private limited company (Ltd) has no statutory minimum share capital — €1,000 nominal is common market practice — while a public company (Plc) requires €25,629. Special Defence Contribution (SDC) on dividends paid to domiciled tax residents fell from 17% to 5% for profit earned from 2026 onward, though pre-2026 retained profit distributed on or before 31 December 2031 remains taxed at the old 17% rate.
The structural detail companies must re-test in 2026 is that Cyprus's two signature preferential regimes were not adjusted alongside the headline rate increase. The IP Box regime exempts 80% of qualifying intellectual property profit — patents and in-house-developed software, not marketing intangibles or brand value — under the OECD BEPS Action 5 modified nexus approach; because that 80% exemption is calculated against the new 15% rate rather than the old 12.5%, the effective rate on qualifying IP income moved from roughly 2.5% to roughly 3%, not zero change. Separately, the Non-Dom regime continues to exempt qualifying new tax residents from SDC on dividends and interest for up to 17 years, regardless of the 2026 rate reform. Existing structures built around either regime need a line-by-line re-test against the new baseline, not an assumption that "unchanged regime" means "unchanged outcome."
Official language
Greek (Turkish also official; English widely used in business and law)
Legal forms
Ltd (private) · Plc (public)
Corporate tax rate
15% standard (raised from 12.5% on 1 January 2026) · ~3% effective on qualifying IP profit under the IP Box regime
Currency
EUR
Employer social security
~15.4% of gross salary (8.8% Social Insurance + 2.9% GESY + 2.0% Social Cohesion Fund + 1.2% Redundancy Fund + 0.5% HRDA, 2026) — Social Insurance capped at €68,904/year insurable earnings
Dividend tax (SDC)
5% for domiciled tax residents on post-2026 profit (down from 17%; pre-2026 retained profit stays at 17% if distributed by 31 Dec 2031) · 0% for Non-Dom residents (up to 17 years)
Minimum share capital
Ltd: none statutory (€1,000 nominal common practice) · Plc: €25,629
VAT
19% standard · 9% (hospitality, accommodation, restaurants) · 5% (food, medicine, books, public transport)
Integrated services in Cyprus
Each service is delivered as part of an integrated service model, coordinated across functions under a single point of accountability. Clients engage one team, not a coordination layer between independent providers.
Accounting & Tax Compliance
Statutory accounts under IFRS as adopted by the EU (mandatory for all Cyprus companies regardless of size), VAT returns, and corporate tax filings, including IP Box qualifying-profit calculations where relevant.
Explore Accounting & Tax CompliancePayroll & Workforce Management
Full-cycle Cypriot payroll including Social Insurance and GESY contributions, and salary structuring aligned with EU Blue Card and Non-Dom planning for internationally mobile staff.
Explore Payroll & Workforce ManagementCompany Formation & Entity Setup
Ltd and Plc incorporation, Registrar of Companies filing, and post-formation tax, VAT and social insurance registration.
Explore Company Formation & Entity SetupWorkforce Mobility
EU Blue Card coordination for non-EU hires, and Non-Dom residency planning for individuals relocating dividend- and interest-earning income to Cyprus.
Explore Workforce MobilityClient profiles in Cyprus
HR & Employment Advisory
Multinationals establishing or restructuring an IP-holding or regional entity in Cyprus
Company Formation & Entity Setup
Companies entering Cyprus for the first time, requiring entity setup and audit-ready accounting from the first financial year
Workforce Mobility
Groups with legacy IP Box or Non-Dom structures needing re-testing against the 2026 rate change
Payroll & Workforce Management
Companies already operating in Cyprus consolidating fragmented HR, payroll and accounting providers under a single governance layer
At the center of your HR operations
What clients say about our services in Cyprus
We'd assumed our IP Box position was unaffected by the 2026 rate change because the regime itself wasn't amended. It took a line-by-line re-test against the new 15% baseline to confirm the effective rate on our software royalties had actually moved from roughly 2.5% to 3%, not stayed where it was.
CFO, Technology Group — Cypriot OperationsInsights on Cyprus
Selected articles on regulatory developments and operational frameworks relevant to companies in Cyprus.
The headline corporate rate rose to 15% while the preferential regimes themselves were left unchanged. Why the effective outcome still shifted for companies relying on them.
Read articleThe modified nexus approach limits the exemption to qualifying assets developed in-house. How to distinguish functional IP from marketing intangibles that no longer qualify.
Read articleThe audit requirement is universal, with a review-engagement alternative for small companies. The obligation, the exception, and the HE32 and TD4 filing calendar.
Read articleFrequently asked questions
Questions raised most often by companies entering or operating in Cyprus.
What services does HTLC Network provide in Cyprus?
HTLC Network provides Payroll & Workforce Management, Accounting & Tax Compliance, HR & Employment Advisory, Company Formation & Entity Setup, and Workforce Mobility services in Cyprus through a coordinated international service model.
Why do international groups establish operations in Cyprus?
Cyprus is frequently considered for international structures, regional operations and businesses serving European and international markets.
What payroll compliance requirements apply in Cyprus?
Payroll administration generally includes income tax withholding, social insurance contributions, employee registration and statutory reporting.
Can employees be relocated to Cyprus from another group entity?
Yes. A company should assess immigration requirements, payroll registration, tax residency and labour law compliance before relocation.
Did the Cyprus corporate tax rate really change in 2026?
Yes. The standard corporate income tax rate rose from 12.5% — unchanged since 2013 — to 15% effective 1 January 2026, as part of a wider reform aligning Cyprus with the OECD's global minimum tax under Pillar Two.
Does the IP Box regime still apply after the 2026 reform?
Yes, unchanged in structure: 80% of qualifying intellectual property profit remains exempt under the BEPS Action 5 modified nexus approach. Because that exemption is now calculated against the higher 15% headline rate, the effective tax rate on qualifying IP profit moved from approximately 2.5% to approximately 3%.
What is Cyprus's Non-Dom regime and does it still work?
Qualifying new tax residents who are not domiciled in Cyprus are exempt from Special Defence Contribution on dividend and interest income for up to 17 years. This exemption was not altered by the 2026 corporate tax reform; domiciled residents, by contrast, now pay 5% SDC on dividends from post-2026 profit, down from 17%.
Is a statutory audit really mandatory for every Cyprus company?
Yes. Every registered private or public company must have audited annual financial statements, including companies that never traded. Small companies — turnover below €200,000, rising to €300,000 from 6 February 2026, and gross assets below €500,000, for two consecutive years — may opt for a lighter ISRE 2400 review engagement instead of a full audit.
Talk to a Cyprus expert
For companies structuring a market entry or consolidating an existing Cypriot operation under a single governance model.