02.5 The Housing Market in Cyprus

Permanent establishment in Cyprus

Requirements for a permanent establishment in Cyprus

The Permanent Establishment of the Cyprus Limited (EU)

The establishment of a regular permanent establishment is indispensable. Basically, the simple “permanent establishment requirement” applies as a prerequisite for tax recognition abroad in Europe.

This regulation, by the way, applies not only to legal entities in Cyprus but to all companies that wish to conduct business within the European Union.

Jurisprudence in Practice

The Republic of Cyprus (EU) does not insist on maintaining a so-called “regular permanent establishment” in every case. Therefore, those who conduct business exclusively within Cyprus can possibly do without a permanent establishment.

In contrast, if a Cyprus company develops economic activities within the EU, the principle applies:

“No permanent establishment, no tax recognition abroad in the EU”

Example: The Cyprus company issues an invoice to a customer abroad in the EU. If the Cyprus Limited does not maintain a “regular permanent establishment” at the time of invoicing, the customer’s expenses are generally not recognized for tax purposes abroad. As a result, the customer cannot deduct their business expenses for tax purposes. For the tax office abroad in the EU, the Cyprus company simply does not exist without a regular permanent establishment (keyword: “letterbox company”). Whether right or wrong – these are the facts.

Requirements - Permanent Establishment and Non-Dom in Cyprus

Requirements for a Permanent Establishment in Cyprus

  • Regular business address and office.
  • Utility bill in the name of the company.
  • Proof of social insurance payment.
  • Proof of at least one employee liable to social insurance within the company.

Resident + Non-Dom in Cyprus

  • The combination of residence and permanent establishment is generally possible.
  • For example, if you have a rental apartment with an integrated office, you can register the utility items either in your company’s name or your personal name.
  • To obtain your residency and Non-Dom status in Cyprus, it is necessary to take up employment liable to social insurance in Cyprus. As an employee and a socially insured director of your own company, you fulfill this requirement without the need for an additional employee.
  • See point (3)

Thus, the features of a permanent establishment required according to OECD recommendations are met, and the permanent establishment is also recognized by the Republic of Cyprus.

If you do not establish your Cyprus company in connection with a relocation to Cyprus, renting an office space, registering for electricity, water, and telephone, and hiring a part-time or full-time employee is generally sufficient. Usually, we recommend employing a local director who will manage your company’s affairs on-site.

Average Rental Prices
(in Euro) Larnaca and Surroundings (As of 01.2024)
Additional Rental Costs
(Water and Electricity – As of 01.2024)

Our recommendation – office and living

TWO IN ONE** "Office & Living"
or Living plus Business Location**
Cyprus Real Estate & Business Location
from approx. 500 Euros/month
TWO IN ONE
"Office & Living*"

The minimum requirements for your company's business location in Cyprus include, among other things, a lockable room with business-appropriate furnishings. For your office within your private premises, you therefore need at least an apartment with a living room, kitchen, bathroom, bedroom, and office.

In principle, the business location should correspond to the business purpose of your company in Cyprus. With the options TWO IN ONE "Office & Living" and "Living plus Business Location" we offer you two particularly proven and advantageous solutions.

Living* plus Business Location

Separate Addresses for Apartment* & Business Location

If you want to temporarily rent out your purely private apartment or house to vacationers in your absence, the combination "TWO IN ONE" is of course not suitable. Our particularly affordable and proven solutions "Private Office" and "Serviced Office-Cube" offer you exactly the flexibility you need in this case. AND THE BEST..., by temporarily renting out your privately used property, you reduce your ongoing costs. Want to learn more? Our specialist will be happy to advise you!
Our
Recommendation

*Apartment, house, villa with pool, etc.

Business Location for Active Cyprus Limited

Your company in Cyprus is a trading, consulting, or service company? The required premises in this case are at least a separately lockable room with a telephone connection, its own internet access, and a desk. We recommend the offer "Two in One - Office & Living" or the solution "Living plus Business Location".**
Business Location for Cyprus Holding

Your company is a holding company? In this case, a simple and separately lockable room should also be rented. There is no minimum size for the room. With its own telephone and internet connection and a desk, it is usually already done. We recommend the offer "Two in One - Office & Living" or the solution "Living plus Business Location".**
Business Location for Production Companies in Cyprus

Trading or production companies do not need their own warehouse or production facility on site, provided this can be justified for logistical reasons. Otherwise, we recommend the offer "Two in One - Office & Living" or the solution "Living plus Business Location".**

**This service is provided in cooperation with our partner SHL Skynet Holdings Ltd.

Real estate purchase in Cyprus

Cyprus Real Estate

If you are considering the purchase or rental of a property, we are at your disposal.

Neutral, not bound to brokers or developers, Privacy Management Group has established itself as a preferred partner in the offering and acquisition of real estate in Cyprus.