Foreign businessmen who want to open a hotel in Cyprus
should know that the legislation related to the incorporation
of the legal entity is similar with the general registration process
applicable to all companies in Cyprus
. Still, the legislation under which the accommodation industry
operates requires the investors to obtain a set of licenses that will testify the accommodation unit
provides all the required services stipulated under its ranking.
Ranking in Cyprus
is performed by a start system, where 1 star is awarded to hotels
with minimum accommodation requirements
, while a 5 star hotel
designates the highest class of accommodation services
. Investors interested in receiving more details on the incorporation of a hotel
can receive an in-depth presentation from our team of company formation specialists
1. Register the hotel as a legal entity
A business operating as an accommodation agent in Cyprus
will have to reserve and register a trading name at the Registrar of Companies
; the process can also be performed on the on-line platform of the institution.
2. Choose a Cypriot legal entity
The next step is to draft the articles of association and memorandum, the two main documents prescribing the purpose of the company, the activities which it will carry out, the partners and the directors of the company. The articles of association provides information on the way in which the shares of the companies are divided amongst the shareholders, their liabilities and the registered office.
• private company limited by shares;
• public company limited by shares;
• company limited by guarantee;
• general partnership;
• limited partnership;
• sole proprietorship.
3. Register for tax purposes
Any company operating on the Cypriot territory
is required to register for tax purposes
; the process is supervised by the Tax Department
and businesses in Cyrus
can register by using the on-line platform of the institution.
The local legislation requires businesses in Cyprus
to register for Value Added Tax (VAT)
, applicable to goods and services being traded on the Cypriot market
. VAT in Cyprus
is currently established at 19%, but accommodation industry
is included in a reduced class of VAT, applicable at the rate of 9%.
4. Register for social contributions
Companies in Cyprus
are required to register for social contribution; the institution supervising this domain is the Ministry of Labor, Welfare and Social Insurance
; our specialists
can provide you with more information on this topic.
5. Obtain special permits
Cyprus hotel industry operates under a hotel classification system, which refers to 5 levels of services provided by the accommodation unit (awarded on a scale from 1 to 5 stars, according with the requirements of each category). The main authority in this sense is the Cyprus Tourism Organization.