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Are you planning to begin your individual enterprise in Cyprus? – Firm regulation / enterprise regulation

Cyprus:

Are you planning to start your own business in Cyprus?

August 31, 2021

AGP law firm | AG Paphitis & Co. LLC

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… Start by requesting legal, financial, and marketing advice to create a well-rounded and fully structured business plan.

What do you need to consider if you are planning to start your own business in Cyprus?

Cyprus undoubtedly offers a beneficial environment for anyone out there looking to become a successful entrepreneur and start a profitable business. While the Cypriot legal system has it all for new ambitious entrepreneurs, there are a number of important considerations to consider after deciding to enter Cyprus. There are four types of considerations to be made by new entrepreneurs and these categories are as follows: a) Goal-Oriented Considerations, b) Structural Considerations, c) Regulatory Considerations, and d) Practical Considerations. No single category of considerations is paramount, and none should be underestimated if you want a dynamic start.

Goal-oriented considerations

One of the most important considerations an entrepreneur must make right after deciding to enter the Cypriot market is what they want to achieve and which customers the company will target. Start by soliciting legal, financial, and marketing advice to create a well-rounded and fully structured business plan. Assuming a business plan is not required, it can be a complete disaster for your company. Experienced professionals can give you a complete picture of what the business plan should be, what it should actually be, and how it should be tailored to the island’s market and the company’s target customer base. Such a plan identifies the type of industry your company will fall into and addresses how your company will operate and what you and your company want to achieve.

The following is a non-exhaustive list of key questions to answer when creating your business plan:

  1. After you have conducted an extremely detailed market research with your legal and financial advisors, you need to be sure about your company’s services or products.
  2. But what are your company’s visions as an entrepreneur? Who are the target customers?
  3. In addition to identifying your customers, it is equally important to identify your competitors. Find out what they do and how they do it, and make sure there aren’t significant barriers to entry that competitors can put in place when launching a new business. Then make sure you can stand out from the crowd.
  4. Then the price of your services or products must be determined. This involves studying comparable companies in the local market, analyzing their own pricing strategies, and finally determining the price you can offer based on the prices of competitors and your company’s comparative advantage.
  5. An important point is that you need to determine what potential legal threats exist to your business and whether these threats can be overcome.
  6. Capital structure, profit target, short-term and long-term goal considerations are also extremely important, and once established, entrepreneurs need to make sure that they are closely monitoring them and not deviating from them.

Structural considerations

Next on your list should be a few structural considerations. This means you need to be able to work out the value of the total number of shares your company will have when it is set up. You also need to determine how many shareholders and directors your company will have. It is not mandatory to have more than one shareholder or director unless your business is regulated and requires a specific structure to be approved. However, designating the management team that will be responsible for running your business is an excellent plan. You will also need to identify the company secretary and registered office address, which are actually mandatory for Cypriot companies. Your legal advisor can provide you with the relevant information on the forms to be submitted to the Cypriot commercial register. For example, each company must submit Form HE2, which contains information about where the company is based.

Legal Compliance Considerations

At this stage, every business owner must ensure that they have an excellent understanding of legal compliance matters. For example, entrepreneurs need to know how income is taxed, which sales are subject to VAT and which goods or services are exempt from VAT in Cyprus. Other legal aspects include labor law aspects such as the percentage of social security contributions to be paid by the employer in Cyprus, but also the health and safety regulations that the company must comply with in order to ensure the safety of its employees. All legal obligations of a limited company incorporated in Cyprus, including annual fees to be paid to the registrar and the annual submission of audited financial statements, need to be examined in detail.

Practical

Finally, practical aspects such as opening a corporate bank account must be taken into account. Of course, your legal representatives and consultants can carry out the procedure in connection with the opening of a bank account for your company, but they can also provide you with relevant information on the documents required to support the procedure. It is equally important to educate yourself about the Cypriot infrastructure and to ensure that there is a satisfactory workforce from which to select the best possible people who are a perfect fit with your corporate culture and strategy. And remember that building your network in Cyprus before starting your business can be of great benefit to you and your company’s financial status. Organizing and participating in networking events will be of great benefit to your company’s brand name right from the start.

New business owners in Cyprus need to make sure they understand all of the obligations and responsibilities that a new business may have. From creating a large business plan to opening a simple corporate bank account, a brand new company needs to make sure that all of the facets analyzed in this article are thoroughly studied to ensure that a commercially viable solution exists for the company. At AG Paphitis & Co LLC, our experienced corporate law team will be able to assist current and prospective clients on a wide variety of issues including how to incorporate their business, comply with Cyprus corporate law, open their bank account, and even create them their very first employment or partnership agreements. We are able to manage your Cyprus company and act as your corporate secretary. Our goal is to make your business experience simpler, simpler and more cost effective. We ensure this by providing you with all the necessary information and business advice, which in turn enables you to avoid and overcome obstacles that can stand in the way of your company in achieving its corporate goals.

AGP law firm | AG Paphitis & Co. LLC

The content of this article is intended to provide general guidance on the subject. Expert advice should be sought regarding your specific circumstances.

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