How to hire employees in Cyprus

Shraddha Saxena
Discover the benefits of hiring in Cyprus, where strategic geographic positioning and a dynamic business climate create ample opportunities. Boasting a competent workforce and flourishing sectors like mining, agriculture, and technology, Cyprus provides access to varied talent pools and substantial growth prospects in Europe’s vibrant economic landscape.

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Cyprus, with its strategic Mediterranean location and robust economic history, presents a compelling destination for global business expansion. Historically supported by UN agencies and international financial aids, Cyprus developed a resilient economy centered on agriculture and trade, now pivoting towards sectors like technology and engineering. This evolution offers access to a diversified and skilled talent pool. For employers and startups, Cyprus's cost-effective labor market provides a unique advantage, ensuring quality talent at competitive costs. Partner with Gloroots to seamlessly integrate into Cyprus’s dynamic market, leveraging our expertise to fuel your global ambitions with top-tier Cypriot professionals.

What you need to know before hiring employees in Cyprus

Job market in Cyprus

When considering expanding your workforce in Cyprus, here are key insights into its dynamic job market:

  • As of early 2023, Cyprus boasts a labor force participation rate of 65.6%, indicative of a highly engaged working population. This vibrant workforce is rooted in a population of over 918,100, providing a substantial talent pool for various industries.
  • Dominated by tourism, finance, and real estate, the Cypriot economy offers abundant opportunities in these sectors. The island's allure as a tourist destination continues to drive economic growth, making it a hotbed for service-oriented roles.
  • Cyprus is committed to fostering a pro-business climate through reduced bureaucracy and attractive tax incentives. This environment is ideal for startups and businesses looking to capitalize on strategic investment opportunities.
  • With a forward-thinking approach to sustainable development and green energy, Cyprus is paving the way for job creation in renewable energy sectors. This aligns with global shifts towards environmental sustainability and offers new avenues for innovative projects.
  • Located at a crossroads between Europe, Asia, and Africa, Cyprus's strategic geographic position enhances its appeal as a trade and business hub, further enriching its job market potential.

Cyprus Hiring Trends

  • Projected 2.17% increase in employed individuals, reaching 0.47 million by 2025, signaling a robust expansion in job opportunities across diverse sectors.
  • The shift towards remote and hybrid work models continues to attract a broader talent pool. Flexibility in work arrangements is key to accessing global expertise and enhancing work-life balance.
  • A strong emphasis on creating inclusive workplaces. Policies aimed at reducing recruitment biases are critical, fostering a culture that values diverse perspectives and backgrounds.
  • Shifting focus from degrees to skills and practical competencies. This trend is driving the relevance of online courses and vocational training, broadening the talent pool beyond traditional education paths.
  • Companies invest in showcasing their culture and values to attract top talent. A strong employer brand and positive candidate experiences are pivotal in a competitive job market.
  • Increasing focus on mental health support and wellness programs. Companies that champion employee well-being are more likely to attract and retain skilled professionals in today’s market.

How to hire employees from Cyprus

1. Set up an entity in the country

Setting up a legal entity in Cyprus is crucial for businesses seeking stable expansion and direct workforce management. Choose between structures such as a Limited Liability Company or Public Corporation, and register with the Cyprus Registrar of Companies. Obtaining a VAT number for tax purposes is essential. Navigating this process requires knowledge of Cypriot corporate laws, underscoring the need for careful planning or specialized assistance.

2. Hire independent contractors

Hiring independent contractors involves contractual agreements for defined tasks or projects, offering flexibility suited to short-term needs or specialized work. It's essential to accurately classify these workers to sidestep legal issues and potential fines. While this model provides operational agility, contractors may not display the same level of commitment or loyalty as full-time, in-house staff, a critical consideration when employing this strategy.

3. Partner with an EOR in the country

Partnering with an Employer of Record (EOR) service facilitates entry into Cyprus’s market without the complexities of establishing a legal entity. This method reduces liabilities and offers cost efficiency. Using an EOR ensures compliance with Cypriot labor laws, taxation, and regulations, significantly reducing legal risks and streamlining business operations, making it an effective strategy for maintaining compliant and efficient practices.

Employment Laws You Must Know Before Hiring in Cyprus

Compliance risk while hiring in Cyprus 

When hiring in Cyprus, compliance risks include misclassification of employees as contractors, non-adherence to labor laws, and incorrect tax filings. These can lead to penalties, fines, and reputational damage. Ensuring accurate worker classification and staying updated with regulatory changes are crucial for maintaining compliance.

Key Aspects of Cyprusian Labor Law:

Employment Contract: In Cyprus, employment contracts must be provided in writing or electronically within seven days of employment commencement. These contracts must detail essential elements such as employee and employer identities, work location, job description, start date, and terms for fixed-term employment, remuneration, working hours, and overtime details. 

Further information, including details on collective agreements and social security contributions, must be furnished within one month. This framework safeguards against the abuse and discrimination of fixed-term and part-time workers.

Working Hours: In Cyprus, the typical workweek comprises 40 hours spread over five days, with each day consisting of 8 hours. However, there is also the option of working a six-day week.

Overtime: Any hours worked beyond the standard 40-hour workweek in Cyprus qualify for overtime pay, with rates determined either by the Employment Contract or relevant Collective Bargaining Agreement. The maximum allowable weekly work hours stand at 48, averaging over four months.

Minimum Wage: The National Minimum Wage in Cyprus is 940 EUR monthly, except for the initial six months of employment, during which it's 885 EUR monthly.

Payroll laws in Cyprus

Cyprus, payroll cycles occur monthly, with payments due by the final working day of the month.

Employment benefits in Cyprus

Leave Policies in Cyprus

Paid Time Off:

Employees in Cyprus working a five-day week typically receive 20 working days of annual leave per year, while those on a six-day week receive 24 days. Additional leave may be specified in the contract or collective agreement. Leave accrues after 48 weeks with one employer. Unused leave can be carried over with mutual consent, capped at 40 or 48 days over two years. Payment during leave is by the employer or Central Holiday Fund.

Public Holidays:

There are 13 public holidays.

Sick Days:

Employees in Cyprus are eligible for paid sick leave starting from the fourth day of illness, funded by Social Security. A medical certificate must be provided to the Social Security Administration within 48 hours of sick leave commencement. Social insurance covers sick pay for up to 312 days at 60% of salary, with possible increases for employees supporting a spouse and children.

Maternity Leave:

Female employees in Cyprus are entitled to varying lengths of maternity leave based on the number of children they have. Maternity leave ranges from 18 weeks for the first child to 26 weeks for subsequent children, with 11 weeks being compulsory. Maternity allowance is determined by the insured's earnings and includes a basic and supplementary allowance. Application for maternity benefits must be made within 21 days of when it's needed, typically after the 25th week of pregnancy, with advanced notice and a medical certificate provided to employers.

Paternity Leave:

Fathers in Cyprus can take two consecutive weeks of paid paternity leave within 16 weeks of their child's birth. The Social Insurance Fund provides this leave at 75.20% of the employee's usual salary.

Public Health Insurance 

In Cyprus, the Ministry of Health oversees the public healthcare system, ensuring access to social insurance for all employed residents. This system encompasses various services like dental, mental, pharmaceutical, and general health care. Funding for the public sector derives from taxes, payroll, and employer contributions.

Treatment accessibility depends on income, number of dependents, and chronic illness history. EU citizens benefit from free treatment at state hospitals and clinics using their EHIC.

However, the public sector faces challenges including lengthy wait times, inter-sectoral coordination issues, and resource mismanagement. While corruption isn't widespread, it remains a concern.

Filing tax in Cyprus

Income Tax:

In Cyprus, income tax rates are progressive, with rates ranging from 20% to 35%. Tax brackets are determined by annual income, starting from 0% for earnings up to 19,500 EUR and increasing with higher income levels. This system aims to fairly distribute tax burdens based on individuals' income levels. For a detailed breakdown of Cyprus's tax structure, including specific rates and brackets, visit our comprehensive guide.

Other Tax and Social Security Contributions:

In Cyprus, employers and employees contribute to various taxes and social security funds. Employers pay contributions towards Social Insurance, the Social Cohesion Fund, Severance Fund, Training and Development, and the National Health System (GESY). Employees also contribute to Social Insurance and GESY. These contributions are calculated based on annual salary brackets and aim to fund healthcare, social support, and employee benefits.For a complete overview of the tax and social security contributions in Cyprus, please refer to our detailed guide.

Business culture in Cyprus

Business culture in Cyprus is characterized by a blend of Mediterranean warmth and professionalism, reflecting the island's strategic position at the crossroads of Europe, Asia, and Africa. Here are some key aspects of Cypriot business culture:

  •  Personal relationships and trust are crucial in the Cypriot business environment. Face-to-face meetings are preferred, and it’s common for business discussions to start with personal conversations to build rapport.
  • While interactions are friendly, a certain level of formality is maintained in business settings, especially in initial meetings. Dressing conservatively and professionally is expected.
  •  Cypriot companies tend to have a clear hierarchical structure. Decisions are typically made at the top levels of the organization, although all levels may be consulted as part of the decision-making process.
  •  Typical business hours are from 8:00 AM to 5:00 PM with a break in the afternoon, particularly during the hot summer months. It's common for businesses to close early on Friday.
  • Communication tends to be direct but diplomatic. While Cypriots are straightforward, they also value politeness and tact in business dealings.
  •  Patience is key in negotiations. Cypriots take time to make decisions, and the process may involve several rounds of discussion. Building a strong relationship can influence the outcome positively.
  • Business often occurs through networks and connections. Having a local contact or intermediary can be beneficial in navigating the business landscape and establishing credibility.

Top sectors to hire from in Cyprus

Industrial Sector:

Accounts for 17.93% of employment, showcasing a significant workforce involvement in this sector. Represents 13.47% of GDP, highlighting its importance in adding value to the Cypriot economy through manufacturing, construction, and energy.

Service Sector:

Dominates the employment landscape with 79.23% of the workforce, underlining the sector’s pivotal role in the job market. Generates 72.44% of GDP, emphasizing its critical position as the backbone of Cyprus’s economy, encompassing tourism, financial services, and real estate.

Agricultural Sector:

2.85% of the workforce is engaged in agriculture, reflecting a relatively small but vital part of the economy. Contributes 1.65% to the national GDP, indicating its modest role in economic output despite a higher employment percentage.

Top cities to hire from Cyprus


As the capital city, Nicosia is the administrative, financial, and business heart of Cyprus. It hosts numerous government offices, universities, and a vibrant business community, making it an excellent place for finding well-educated and skilled professionals, especially in fields like finance, law, and administration.


Known for its dynamic port and extensive business district, Limassol is the second-largest city in Cyprus and a significant economic hub. It's particularly strong in shipping, commerce, and tourism, attracting a diverse workforce skilled in trade, maritime activities, and services.


With its major airport, Larnaca is a key entry point to the island and has a growing service sector thanks to its logistics, tourism, and retail industries. It's also home to emerging technology startups, offering a mix of traditional and innovative hiring opportunities.


This city is renowned for its cultural and historical significance, which supports a thriving tourism industry. Paphos is ideal for hiring in the hospitality, real estate, and service sectors, with an expanding number of expatriates and international businesses setting roots there.

Hire in Cyprus  compliantly with Gloroots

Gloroots, as an Employer of Record (EOR) in Cyprus, provides a streamlined solution for the unique challenges of hiring in the country. Our platform accelerates candidate onboarding, ensuring swift and compliant operational initiation. Tailored for companies of all sizes, it simplifies payroll management, benefits administration, and tax handling, removing the need to establish a local entity. This allows businesses to focus on efficiently building their remote team in Cyprus. For more information on how Gloroots can assist with your Cypriot hiring needs, please contact us.

Frequently Asked Questions 

What are the most important factors to consider when choosing a location for hiring in a new country?

When selecting a location for hiring, consider factors such as the local talent pool, cost of labor, regulatory environment, and economic stability. Additionally, assess the logistical aspects like transportation, local infrastructure, and proximity to major business hubs.

How do you ensure compliance with local employment laws when hiring internationally?

Ensuring compliance involves understanding and adhering to the local employment regulations, including labor laws, tax obligations, and workers' rights. It is advisable to consult with local legal experts or partner with a local Employer of Record (EOR) to navigate the legal complexities effectively.

What strategies can be employed to effectively integrate a remote or international team into the company culture?

Effective strategies include regular communication, using technology to facilitate collaboration, and creating inclusive policies that consider diverse time zones and cultural differences. Organizing periodic in-person or virtual team-building activities can also help strengthen team cohesion and align remote employees with company values and goals.

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