Setting up a Sole Trader in Cyprus

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Setting Up a Sole Trader in Cyprus

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What is a Sole Trader in Cyprus?

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• A sole trader in Cyprus is the simplest business form available on this market.

• It is a type of business which is suitable for natural persons who want to start a small business in Cyprus.

• However, it is important to know that there is no legal distinction between the entity and the businessman.

• Investors must also know they will be held fully liable for the business’ debts.

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Taxation Matters for Sole Traders in Cyprus

• Although a sole trader in Cyprus is a type of business form, the taxation of this type of structure is different than in the case of other commercial companies.

• A sole trader in Cyprus must pay the same tax applicable to natural persons - the income tax.

• This tax can reach an overall value of up to 35%.

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Open a Sole Trader in Cyprus >>

• The Cypriot sole trader is subject to the same regulations as the partnership.

• The main legal framework regulating sole traders is the Partnership and Business Names Law.

• The legislation is prescribed following the rules established in the Cypriot Commercial Code.

• Sole traders must register with the Cypriot Companies Registrar.

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>> Open a Sole Trader in Cyprus

• The registration must be completed before starting the business operations.

• Our team of lawyers in Cyprus can guide businessmen through the entire registration procedure.

• Citizens from EU and EFTA do not need a residence permit when opening a sole trader in Cyprus.

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Self-Employment in Cyprus >>

• Owning a sole trader in Cyprus means that the businessman will have the statute of a self-employed person.

• This is also applicable to small traders, such as partnerships in Cyprus.

• Another category of self-employed individuals are freelancers, who are allowed to conclude contracts with Cypriot companies.

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>> Self-Employment in Cyprus

• The commercial legislation stipulates that sole traders and self-employed individuals are not required to perform an audit on the company.

• However, this is applicable only in the situation in which the company’s annual turnover does not exceed 70,000 euros.

• Our team of attorneys in Cyprus can offer more details on this matter.

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Taxation of Sole Traders in Cyprus >>

• Sole traders in Cyprus must register for taxation purposes.

• They also have to register for social security.

• Taxation of an individual in Cyprus is performed on a progressive base system.

• For example, income below EUR 19,500 is free of charge.

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>> Taxation of Sole Traders in Cyprus• Income taxes for individuals are

imposed as follows:

income of up to EUR 28,000 – taxed at a rate of 20%;

income of up to EUR 36,300 - taxed at a rate of 25%;

income of up to EUR 60,000 - taxed at a rate of 30%;

income above EUR 60,000 - taxed at a rate of 35%.

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Business Services in Cyprus

• Our law firm in Cyprus can assist foreign businessmen in setting up a sole trader, but they can also provide legal assistance for the incorporation of any other legal entity available under the local legislation.

• Moreover, foreign investors can receive assistance from our lawyers for opening a branch office or a subsidiary in Cyprus.

Thank you for your attention!

• For more information please contact us at:

(+44)203-287 0408 (for international clients)

office@lawyers-cyprus.com

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