How to trade in Cyprus?
There are two ways you can trade in Cyprus; as a physical person or as a Company. Each option has its own distinct characteristics, tax benefits and different legal protection however you can if you decide to trade in these simple steps
Obtain a Tax Identification Number (TIN)
This will be the number used by your business and the Cyprus Income Tax Office when you will be submitting your personal or corporate tax returns.
Register with the VAT
All businesses or individuals whose turnover exceeds Euro 15,300 within 12 consecutive months must become VAT registered.
Once you become VAT registered you must add to your sales invoices the applicable VAT to your business.
Every quarter your accountant will be preparing your VAT return and paying the VAT you have collected for the government to the local VAT office in an automated manner. In a nutshell you are collecting VAT for the government.
These days the VAT number is the same as the TIN number in Cyprus like the rest of the EU countries.
Offices Needed? Not Really
You do not really need to rent out premises to operate your business as you can work from home and use your residential address as your business address. This is something common in Cyprus and accepted by the local regulators.
Bank Account Set Up
Whether trading as a physical person or as a company you must have a company bank account dedicated for your business; if your trading under a physical person (that is called a sole trader) this option is not compulsory but we strongly advise you to do so in order to easy the control of your payments, your accountants workload and to keep your personal and business spending as neat and tidy as possible.
Check if what you do requires licensing. Use the help of a regulated audit and assurance firm or a regulated legal firm to enquire if specific licenses are required for your business.
Want to know more about the differences between trading as a sole trader (a physical person) and Company? Click here where we analyse the following disticnt differences between the two:
- Summary of differences
- Tax benefits
- Legal protection
- Tax calculators
- Useful matters
Hire your team of accountants and lawyers, if needed
Do your homework and select a regulated audit and assurance firm like CYAUSE Audit Services to assist you with the day to day accounting, VAT and tax work. Depending on your size you should select suitable size of firms to represent you as choosing a very large firm would be too expensive and less attentive to a small business whilst a small accounting practice would not be able to cope with a large corporation's operations.
Pay your taxes on time
Close your books on time
Read your financial statements or have someone explain them to you
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.