Picture Cyprus: an island nation that sits North of Egypt, East of Greece, and South of Turkey. With this, the first thing you might think of when you hear Cyprus is a country full of islands, beaches, and lots of sites to see.
Yes, it’s a highly touristic place and attracts millions of visitors each year
But for many, it’s not the tourism nature of this Mediterranean country that draws them
It’s rather the business environment, when it comes to taxes, doing business, and hiring the best talent.
It’s not surprising that Cyprus ranked 37th worldwide in Forbes’ 2018 list of Best Countries for Business.
This is impressive for a small country of about 1.26 million people
The country has been making strides with programs and initiatives to attract businesses and remote workers
As we embrace the future of work, Cyprus has become one of the best destinations for startups and companies to hire remote contractors.
However, before you make that hiring decision, you have to read this guide
This guide explores why Cyprus has become a go-to location for remote talent, from understanding the employment market to assessing payroll requirements, leave policies, and much more.
Geography and Workforce Profile
Cyprus, with its English-speaking population, is also known for its rich history and cultural blend. Also, in recent years, it has risen to become a popular hub for international business due to its educated workforce.
Another thing is that the country’s strategic position allows easy access to African, European, and Middle Eastern markets. To put it simply, it’s truly a gateway for any startup looking to hire remote contractors.
- Cyprus Population: Approximately 1.27 million, with a high percentage of English speakers.
- Key Industries: Predominantly service-based. Finance, tourism, shipping, and IT are the major sectors.
- Talent Pool: High-quality education system producing a skilled workforce in fields like tech, finance, and business services.
Also read: Top Labour Laws to Know When Hiring International contractors
Cypriot Cities and Talent
Like any country, there’s a concentration of talent in certain cities in Cyprus. Here are some of the most prominent cities for talent in the Country:
- Limassol: Known for its shipping and maritime industries, with tech and finance talent as well.
- Nicosia: The capital, home to many international companies and professionals in law, finance, and corporate services. Crypto and blockchain also have a strong community here, with the University of Nicosia offering a few programs in this area.
- Larnaca: A growing tech scene with plenty of healthcare professionals.
Overview of Cyprus’s Employment Market
Cyprus has a stable and growing economy. Its current GDP is around USD 52 billion as of 2024. It also has a high employment rate with a falling unemployment rate every year. With this, it’s definitely a great location to look for your next remote contractor hire.
- Dominance of the service sector: The sector contributes roughly 80% of the GDP of the country, with high demand for roles in tourism, IT, and finance.
- Sectors with high hiring potential: Pharmaceuticals, IT, engineering, sales, and accounting.
- What are the fastest growing roles in jobs at Cyprus: Data scientists, software developers, cloud engineers, and UX designers are particularly in demand, reflecting the global shift towards digital transformation.
Example: If you’re a small tech company looking for someone with expertise in compliance in the European market, Cyprus is a great place to hire remote contractors
Remote work ecosystem in Cyprus
The country of Cyprus has not been left out when it comes to the future of work. The country has adapted well to the global shift towards remote work, and now, we can say that a lot of Cypriot companies and professionals are now offering remote services.
There are also government-operated incentives, one example being the Remote Work Visa. This visa’s aim is to attract foreign talent and encourage businesses to employ Cypriot workers remotely.
- The Cyprus digital nomad visa: This is a one-year residency to digital nomads earning a minimum monthly income of €3,500. The visa can be renewed for up to three years.
- English-friendly environment: Communication is easy, and remote work is also great, due to the large English-speaking population.
- Stable infrastructure: Cyprus has reliable telecommunications, stable internet services, and excellent infrastructure, essential for remote work setups.
The sunny island is one of the latest countries to capitalise on the increase in remote working since the pandemic began. Euronews
Understanding Payroll and Taxes (Cyprus) for Remote Contractors
As we’ve always said at Arbonum, payroll and tax compliance are often complex in international hiring, so you always need a good partner to handle them. Compared to its European counterparts, taxes are relatively favorable to people who decide to operate in Cyprus, especially for non-domiciled workers. Check out this brief rundown of Cyprus’ payroll basics below:
- Income tax: Cypriot residents pay income tax, but for non-domiciled workers, they get a low tax rate (those who aren’t permanent residents).
- Corporate taxes: At 12.5%, Cyprus boasts one of the lowest corporate tax rates in the EU. This makes it attractive for any startup or company operating there.
- Social security contributions: Employees and employers both contribute social security in Cyprus. If you’re a non-domiciled remote contractor, the rates could either be adjusted or not, depending on your residential status.
Example: If you’re a US-based company hiring a remote contract software engineer who is of non-domiciled status developer in Cyprus, you could benefit from reduced tax rates. This can at least lower your cost of hiring compared to other countries in the EU.
Working hours, PTO, and leave policies
Like many European countries, Cyprus adheres to a standard workweek. It also offers generous paid time off (PTO) policies, aligning well with labor standards in the European Union. Here’s what to expect:
- Standard work hours: A typical work week is around 38-40 hours. However, you can also find flexible working policies.
- Paid Time Off (PTO): Employees generally have about 20-25 days of leave every year, not much different from other European countries.
- Public holidays: Cyprus observes around 15 public holidays yearly. This is on the higher average side, considering Malta and Austria have around 38 annual public holidays.
- Parental leave: Cyprus offers maternity and paternity leave, though exact benefits may depend on contractor agreements.
Benefits of Hiring Remote Contractors from Cyprus
The reason we’ll highly recommend Cyprus to any startup hiring remote contractors is because of the favorable tax atmosphere. Of course, not forgetting the stable economy and highly skilled talent. Below are reasons why Cypriot talent should be on your remote team:
- High English proficiency: A high proficiency in English helps facilitate clear communication with English-speaking teams.
- Multicultural expertise:Professionals in Cyprus often work with international clients, making them adaptable and culturally aware.
- Lower cost of living: Cost of living is a bit low compared to other countries in Western Europe. This makes professionals in Cyprus a cost-effective talent solution for a global startup looking to hire remote contractors.
- Time zone: Cyprus operates in the Eastern European Time Zone (EET), convenient for both European and Middle Eastern markets.
Example: If you’re a UK-based game studio looking for a developer or a creative agency looking for a content writer, you can hire Cyprus remote talent. They are not only in a great time zone, but also are cost-effective and understand the European market.
Also read: Contractor or Employee? What's The Best Choice for Remote Hiring?
Domicile Program and Tax Benefits for Non-Domiciled Contractors
Cyprus offers tax incentives specifically tailored for non-domiciled individuals. This is a good program if you’re a remote contractor or digital entrepreneur and would love to spend some time working in Cyprus. Here’s a summary of what the program involves.
- Non-Domicile Status: Basically, this allows anyone to live in Cyprus while exempting them from certain taxes. An example of a tax you’ll be exempted from is the Special Defense Contribution, which makes the country a tax-friendly ecosystem.
- Applicable professions: Many freelancers and digital nomads, especially in tech and finance, benefit from non-domicile status.
Key Factors to Consider When Hiring Remote Contractors from Cyprus
Without due diligence, your remote contractor hiring journey would be negatively impacted. Because there are so many legal and tax compliance rules and regulations to navigate. Here’s what you should consider before you hire remote contractors from Cyprus:
- Legal compliance: You should have an understanding of Cypriot employment laws, including taxes, work contracts, and non-domicile tax benefits. If you don’t know, it’s always advisable to seek out a team like Arbonum that knows what it takes to hire remote contractors from Cyprus
- Hiring costs: Always ensure you account for onboarding, training, and opportunity costs, as well as local salary expectations.
- Contract Flexibility: Offer clear terms on working hours, expected deliverables, and communication norms, as Cypriot contractors may work with multiple clients.
Tip: Use a contract template with clear clauses on roles, responsibilities, and compensation, adapted to Cypriot labor law. Or reach out to Arbonum for help
Read: Best Practices for Hiring International (remote) Contractors
Cyprus’s Talent Market: In-Demand Skills
The skillset available in Cyprus spans diverse fields, including IT, finance, and tourism. Here’s a quick look at some sought-after skills:
- IT & development secor: High demand for developers, game designers and developers, cloud engineers, and data scientists.
- Finance & accounting: Cyprus’s financial sector is robust, with opportunities for accountants and auditors.
- Healthcare: Surgeons, nurses, and pharmacists are in demand, especially given Cyprus’s growing healthcare industry.
- Tourism-Related roles: As a country that welcomes lots of tourists annually, Cyprus’s tourism sector constantly needs hospitality managers, travel guides, and multilingual staff.
The Cyprus Digital Nomad Visa
To attract remote workers, Cyprus has a Digital Nomad Visa program, which is particularly beneficial for remote workers, digital nomads, and contractors.
- Eligibility: Minimum monthly income of €3,500.
- Duration: One-year residency, renewable up to three years.
- Benefits: Access to Cypriot healthcare and public services, creating a stable living environment. Don’t forget the many tourist attractions, including beaches and Unesco World Heritage sites.
Conclusion: Hire Remote Contractors from Cyprus
Hiring remote contractors from Cyprus can provide access to a lot of benefits, including:
- Cost-effective skilled professionals,
- Aax-friendly environment.
- English-speaking talent pool,
- Favorable time zone, and
- Supportive government policies for remote work
In general, Cyprus presents an ideal location for expanding your global team.
Whether you’re a small startup or digital studio looking for cost-effective solutions or a large enterprise aiming for European market expansion, Cyprus offers a compelling package of benefits for remote hiring.
Start your Cyprus hiring journey now
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