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How to Open a Hotel in Cyprus in 5 Steps

Updated on Wednesday 27th April 2016

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How-to-Open-a-Hotel-in-Cyprus-in-5 Steps.jpgForeign 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. 
 
Investors who want to establish a company in Cyprus can register the business under the following legal entities:
 
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.
 
If you need further information on the incorporation of a hotel in Cyprus, please contact our team of Cypriot company formation consultants, who can assist you with expert advice on this matter. 
 

Comments

  • Andrew 2016-03-29

    Very useful information. I want to open a hotel, but a small one, in a rural region of the country.

    Hello Andrew!  We are glad to see that our article is useful. We can help you with the company formation procedure for your future business in Cyprus. Please send us a detailed e-mail at office(at)lawyers-cyprus.com about your project and we will answer you as fast as possible. Have a great day!

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