6 Reasons why you should move your business to Cyprus

Over the years economic problems, subsequent greylisting, a high crime rate and the burden of load shedding have resulted in many entrepreneurs considering the option of relocating their business.

A location that has gained popularity in recent years is Cyprus. Cyprus is a small island country in the eastern Mediteranean. It boasts a strategic location between Europe, Asia and Africa, making it the ideal location for companies looking to expand their reach.

We speak to South African entrepreneurs about the pros and cons for moving your business to Cyprus

Advantages of doing business in Cyprus

1. Favourable tax system: Cyprus has a competitive tax regime with one of the lowest corporate tax rates in the European Union (EU) at 12.5%. The country also has a network of double tax treaties with over 65 countries, including South Africa, which can help to reduce the tax burden for businesses.
2. Strategic location: Cyprus is located between Europe, Asia and Africa, making it an ideal location for businesses looking to expand their reach. ‘The market in Cyprus is EU regulated and gives you access to the EU market as well as Middle Eastern markets. Cyprus is on a similar time zone to South Africa so, if you have clients in South Africa it is easy to communicate with them,’ explains Sybrand Mostert, managing director, Capital Sans Frontier who moved his financial services business to the island.
3. Good transportation network: It has good transportation links including two international airports and a modern port, making it easy to travel to and from the country.
4. Skilled workforce: Cyprus has a highly skilled workforce, with many professionals speaking English and other languages.
5. Quality of life: Cyprus is known for its high quality of life, with a pleasant climate, beautiful scenery and a relaxed lifestyle. It also has good healthcare and a low crime rate.

Challenges of conducting business in Cyprus

Of course, moving a business to a new country is not without its challenges. Here are some key considerations that entrepreneurs must consider before moving businesses to the Mediterranean island:

1. Legal and regulatory compliance issues: ‘Even though Cyprus is part of the EU, Cyprus is really a “lite” version of the EU. Not all regulations of the EU apply, so it’s always best to check first which law applies. Bureaucracy in Cyprus is also a bit of a challenge. There is quite bit of corruption and authorities can be very inflexible and obstructive at times,’ says Mosert.
2. Travel difficulties: ‘Cyprus is not part of the Schengen block so South Africans still need to get visas to travel to the rest of Europe and it is very difficult to get an appointment to apply for visas,’ explains Mostert.
3. Language and cultural differences: While English is spoken widely in Cyprus there may still be some language and cultural differences that businesses need to navigate.

Helen Macedo believed she had done adequate research into the area where she started her candy, party, and balloon store. ‘The shop was located opposite the biggest primary school in Larnaca, there was a busy coffee shop next door, a well-known pharmacy in the area, and a dance school with over 100 students. I didn’t think anything could go wrong,’ she says.

But it was Covid that, in part, ended her business as well as the lack of local support. She says: ‘After Covid arrived things started getting difficult with running expenses which I still had to pay. In the end, I had to close.’
She adds: ‘It’s a struggle if you don’t have a circle of friends or family to support you. The district I believe is also a problem. Larnaca generally has people with lower incomes. Maybe if I was located in Limassol things would be different. I’d say to anyone that’s immigrating don’t rush to open a business.’

4. South African qualifications may not be recognised: Cosma Giannakopoulos who moved with his family to Cyprus in 2021 was forced to get qualifications that were recognised by the authorities on the island. ‘The Cypriot Dental Association, unfortunately, did not recognise my degree or experience and I had to write two exams to get accreditation in Cyprus. My advice to any South African is to make sure before you arrive that you know what your professional body requires of you in order to start working here.’

Do your research

Moving a business to Cyprus from South Africa can offer numerous benefits, such as a favourable tax system, skilled workforce and high quality of life. However, it’s important to do your research before making such a move and work with experienced partners to ensure a successful transition.