Zypern

Zypern

Europe

1.358.000

Euro (€)

Greek, Turkish

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Regulations for Working in Cyprus

Overview

As an EU Member State, Cyprus not only attracts tourists, but is increasingly developing into a popular destination for business trips and workations. The stable infrastructure, Mediterranean climate and English-speaking administration make the island nation attractive for temporary work assignments – whether for meetings, project work or longer stays as part of flexible working models.

However, even for short-term stays, labour law, social security and tax regulations apply, which must be observed by companies and posted employees. When is a notification required? What documents must be submitted? And what penalties apply in the event of non-compliance?

EU Posting Directive

What requirements apply?

Foreign employers are obliged to notify the Cypriot Ministry of Labour (Labour Department) of the posting of employees before work begins. The notification must include the following information:

Details of the foreign employer (name, head office, legal form)
Name of the legal representative and, if applicable, a contact person in Cyprus
Place of work in Cyprus (name, address, legal status of the receiving entity)
Duration of the posting
Type of economic activity

Required Documents

Before the start of the assignment, the following documents must be submitted to the Cypriot Labour Department:

A written statement containing all relevant information regarding the posting
A list of posted employees including names, passport numbers, and job descriptions
The name of a designated contact person who acts as a liaison with Cypriot authorities

During the assignment, the following documents must be available and presented upon request by the receiving entity in Cyprus:

The employment contract with the terms and conditions of the posting
Details of the receiving entity (e.g., company name and address)
Details of the foreign employer
Country and place of origin of the posted employees
Nature of the services provided, number of posted employees, and duration of the posting or service provision

All of these documents must be retained for the entire duration of the posting – and beyond, if required by law. They must be available in Greek or English. A certified translation is only necessary if explicitly requested by the authorities.

Legal Representative in Cyprus

Cypriot legislation requires foreign employers to appoint a legal representative in Cyprus. This person is responsible for communication with the relevant authorities and ensuring compliance with local regulations. While a local residency is not legally required, appointing a Cyprus-based contact is strongly recommended for practical reasons.

Penalties for violation

Violations of the posting requirements may have serious legal consequences. Depending on the nature and severity of the offence, penalties may include:

Imprisonment of up to two years
Fines of up to €50,000
Or both in severe cases

Legal entities (e.g. companies) can also be held criminally liable.

Labour Law

Minimum Wage

A statutory minimum wage applies to full-time employees in Cyprus. During the first six months of continuous employment with the same employer, the minimum wage is €855 per month. After six months, this increases to €1,000 per month.

Working Time

The maximum working time is limited to eight hours per day or 48 hours per week. In addition, the following rest periods must be observed:

Daily rest period: at least 11 consecutive hours between two work shifts
Weekly rest period: at least 36 consecutive hours per week

Important Hints

Failure to comply with the applicable labour law may lead to financial obligations, fines or claims under local dismissal and working time regulations.

Social Security

For workers posted from an EU country to Cyprus, EU Regulation 883/2004 on the coordination of social security systems applies.

A1 certificate available: The employee remains insured in the home country.
No A1 certificate: Cypriot social security rules apply, and the foreign employer must act like a Cypriot employer.

Important Hints

Non-compliance may result in extensive administrative obligations, retroactive contribution payments (with interest), increased audit exposure, and significant penalties. In addition, serious reputational damage may occur in this context.

Income Tax

For posted employees, a Cypriot shadow payroll must be set up. This involves maintaining a parallel payroll where the employee’s income is recorded for tax purposes, even if it is paid by the foreign employer.

Income tax is handled through Cyprus’s Pay-As-You-Earn (PAYE) system. This means that monthly tax withholding and remittance to the Cypriot tax authorities is required – regardless of where the salary is actually paid from.

Proper implementation and maintenance of the shadow payroll is essential to ensure compliance with Cypriot tax law and to avoid penalties, interest, or retroactive tax liabilities.

Important Hints

The consequences of non-compliance vary but often result in an immediate obligation to file a tax return in the host country, leading to extensive consequences for both employees and employers.

Immigration & Visas

International activities require exact compliance with international visa and entry requirements. The traveller, the type of activity, the purpose of stay and the duration are decisive for this, whether a business visa, a work visa or other special permits are required.

Important Hints

The consequences in case of infringement may include entry bans and associated loss of revenue, sanctions, fines and reputation damage.

Permanent Establishment

Employees working abroad can establish a permanent establishment through their activities in the target country and thus trigger a chain of financial and administrative consequences for companies.

Important Hints

The consequences of a violation may vary depending on the situation, but each establishment entails a significant administrative burden. In addition to registration, profit allocation and filing of the corporate income tax return, income tax obligations usually also arise.

Wichtige Hinweise

Important Hints