The island nation of Cyprus has endured a tumultuous early 21st Century and was hit particularly hard by the 2012-2013 financial crisis. However, it has come out the other side to stabilize and grow its economy in recent years. Now, the country is once again an excellent place to do business.
If your company is planning an expansion into Cyprus, then you should be prepared for a complex process. While the rewards are worth it, Cyprus’s unique business and employment regulations, cultural customs, and more can all result in costly delays to any expansion efforts.
A popular way of bypassing the complex administrative procedures is to outsource to a global professional employer organization (PEO). At New Horizons, our tailored PEO, employer of record, and payroll services are designed specifically to help organizations of all kinds expand abroad faster and more efficiently, including into Cyprus.
Our in-house recruitment team can even find, recruit, and onboard your local workforce, as well as handling any ongoing HR administration. Our team will provide everything you need to expand into Cyprus rapidly, while potentially saving you thousands in setup costs.
Establish and grow in Cyprus, with help from New Horizons
Expand your operations in Cyprus, even if you don’t have an in-country subsidiary.
Hiring in Cyprus - Employment Law Overview
Cyprus employment contracts
Technically, employment contracts can be oral or written in Cyprus. However, we recommend that you always provide a formal written contract for every employee you hire in the country. The contracts should cover important details such as compensation, working hours, benefits, and entitlement. Additionally, they should be written in either Turkish or Greek and use the currency of the euro.
Working hours in Cyprus
As with much of Europe, the standard working week for employees in Cyrpus is 40 hours spread across five days. Including overtime, the maximum number of working hours is 48 hours per week.
National holidays in Cyprus
There are 14 national holidays celebrated in Cyprus, with many employees receiving the following days as paid leave from work:
- New Year’s Day
- Greek Independence Day
- Greek Cypriot Day
- Ash Monday
- Orthodox Good Friday
- May Day
- Christmas Day
- Boxing Day
- Orthodox Easter Monday
- Orthodox Whit Monday
- Assumption Day
- Cyprus Independence Day
- Ochi Day
Vacation in Cyprus
Employees in Cyprus are entitled to at least 20 days of paid vacation leave per year after working with an employer for at least 48 weeks out of a year. For employees who work six days per week, the entitlement is 24 days of vacation leave.
Sick leave in Cyprus
Employees in Cyprus are not paid for the first three days of absence through sickness, although it is fairly common for employers to cover this period voluntarily. Up to 156 days beyond this are covered by social insurance, and this can extend to a further 156 days if the employee is deemed suitable for special incapacity pension payments.
Maternity and paternity leave in Cyprus
Employees in Cyprus are entitled to 18 weeks of paid maternity leave, which must begin two weeks before the birth. Payments are covered by a maternity grant.
Either parent can take a further 18 weeks of unpaid parental leave if they wish.
Employee severance and terminations in Cyprus
The mandatory minimum notice periods of termination depend on the employee’s length of service with their employer. For between six and 12 months of service, the notice period is one week. This entitlement gradually rises up to eight weeks of notice after six years of service.
Severance payments also vary depending on the employee’s length of service. For up to four years of service, the payment is two weeks of pay. This increases up to four weeks of pay for employees with over 20 years of service.
Standard probation periods are limited to six months, but may be as long as two years if agreed upon by the employer and employee.
Tax laws in Cyprus
Employers and employees must make various mandatory contributions. Both must pay 7.8% to social insurance. Additionally, employers must pay 0.5% to the Industrial Training Fund 2% to the Social Cohesion Fund, 1.2% to the Redundancy Fund.
Income tax in Cyprus is progressive, ranging from 0% to 35% depending on income level.
Corporate tax in Cyprus is 12.5%.
Health insurance in Cyprus
Cyrpus has a combination of public and private healthcare, so many employers choose to offer private medical insurance to employees as part of their benefits packages.
Cyprus compensations & benefits
Compensation laws in Cyprus
The regulations for minimum wage in Cyprus are complex, with different minimums for different types of work and no regulations for some. For this reason, you should carefully determine what specific rules apply to your organization and its employees when hiring in Cyprus.
Benefit management in Cyprus
Setting up a system of employee benefits for your employees in Cyprus can be difficult. The complex regulations and organization can require a lot of time, effort, and investment on the part of employers.
At New Horizons, we specialize in establishing and running Cypriot employee benefits systems. We’ll handle everything, using our experience to ensure you are ready to commence operations in Cyprus quickly and efficiently.
Why choose New Horizons' services for your expansion into Cyprus?
New Horizons’ Cyprus PEO, employer of record, and payroll outsourcing services pro your business with everything you need to start trading in Cyprus rapidly and compliantly. Our specialized team of experts will ensure that you are set up and trading in Cyprus in as little as 48 hours, and could save you up to 82% in expenditure, even if you haven’t established an entity in Cyprus.
Our team can take care of your business’ expenses, payroll, benefits, and legal compliance in Cyprus, as well as all HR work. As the only global PEO with an in-house recruitment team, we can also find and recruit your local employees, utilizing our Cypriot subsidiary to act as employer of record so you don’t need to establish a Cypriot entity.
Get in touch to learn how our outsourcing services can help you to seamlessly expand into Cyprus.