Cyprus Market Entry

Cyprus Market Entry

Subchapters:

  • Market entry
  • Forms and conditions of operation on the market
  • Marketing and Communications
  • Issues of intellectual property protection
  • Public procurement market
  • Payment terms, payment ethics and resolution of commercial disputes
  • Visas, fees, specific conditions of travel to the territory
  • Employment of citizens from the Czech Republic
  • Fairs and events

Market entry

You can search for a Cypriot partner, for example, through an advertisement in the bulletin of the Cyprus Chamber of Commerce and Industry (CCCI) or directly in the Members Directory section on the main page. In the case of a request to find a suitable partner addressed to the embassy, ​​we recommend sending the following information at the same time:

  • brief description of the product in English
  • detailed contact information
  • information sheets, catalogs, samples, certificates, reference documents
  • the usual business conditions under which you deliver, the warranty period
  • who is your usual customer abroad, distributor – what product range does he trade with
  • who is your competitor – what foreign products can be characterized as similar or fighting for the same group of customers
  • description of any previous cooperation with CY
  • what are your ideas of supply options for CY

It is also advisable to find out the approximate transport costs in advance, i.e. try to calculate the price from the Czech Republic to CY with an estimate of the possible one-time quantity delivered to the Cypriot market. Especially during the period of gaining market share and establishing yourself in the market, this is usually the biggest challenge. Given its size, the Cypriot market has a limited absorption capacity for imported goods. Major global competitors are usually present in the market. Merchants nevertheless add a high margin to the price, without which they cannot operate shops with a relatively small volume of sales. According to cheeroutdoor.com, high transport costs also increase the price of goods. The penetration of Czech consumer goods into the Cypriot market (apart from traditional and widely known goods such as cut glass and beer) significantly complicates the ever-growing interest of Cypriot traders in cheap alternatives from Asia, especially from China. CY is from 1. May 2004 a member state of the EU and part of the internal market of the European Union. The same rules apply to Czech exporters in CY as in other EU countries.

Forms and conditions of operation on the market

Business activities on CY can be carried out by:

  • private/public trading company
  • branch
  • general partnership/limited partnership
  • European company according to Council Regulation 2157/2001

The registration rules are the same as for local entrepreneurs. In advance, it is necessary to obtain approval of the company name from the register – due to a possible conflict of names. The basis is the partnership agreement, which contains information about the company: business, share capital, number of issued shares, list of executives including their powers, company headquarters, etc. In addition to this information, it is necessary to submit a confirmation from a local lawyer (lawyer’s affidavit) that the conditions for establishing the company have been formally met. Registering a company in the company register and processing other documents through a law office takes about a month. The cost of the entire registration procedure ranges from €700 and up and depends on the size and type of company. There are not many direct investments by Czech companies on the Cypriot market. Several Czech companies have business partners on the island who, based on long-term cooperation, import products and goods from the Czech Republic (vehicles, beer, medical equipment, solar panels, etc.). However, it is evident from public sources that a number of financial groups with Czech participation and Czech companies have established themselves in CY mostly for reasons of tax optimization and the use of local corporate services. According to the available information, in 2019, 2,053 companies originating from the Czech Republic were registered on the CY. In the last years before the CoV-19 pandemic, there was a revival of mutual trade and the realization of interesting acquisitions. In 2017, for example, the Czech APS Holding founded a joint company with Hellenic Bank, which manages the portfolio of non-performing loans of this largest financial institution on CY. Since 2017, together with a Greek investor, Sazka has operated the monopoly lottery company OPAP, into which the Czech investment group Emma joined already in 2012. In 2018, LINET won an important tender for the import of hospital beds to Cypriot state hospitals and successfully established itself on the market. Here, the SOLEK company achieved success in building solar power plants. In the last year at CY there has also been interest in Czech nanotechnology.

Marketing and communication

Experienced consumer habits of Cypriot customers bring with them requirements for promotion, especially when it comes to start-up companies or the presentation of new goods. The methods of promotion do not differ from promotion in the Czech Republic, of course taking into account local customs and conditions. The scope of necessary advertising or other forms of promotion varies according to the products and it is probably advisable to leave this question to the Cypriot partner if he has experience in trading with the given commodity. In addition to traditional promotional media (television, radio, print, billboards), methods of so-called direct marketing, sending promotional materials to households, telemarketing, and social networks, especially Facebook and Instagram, have been extensively used in recent years.

It is not entirely appropriate to use political topics in marketing, such as the Cyprus issue, or even historical events related to the division of the island. It is also better to avoid religious topics.

HR and PR agencies are trusted in Cyprus, their contacts can be found on the Internet, if you have any doubts, contact the embassy.

Issues of intellectual property protection

In the field of intellectual property protection, the Copyright Act of January 1, 1994, the Patent Law of April 2, 1998, the Law on the Legal Protection of Industrial Designs of February 23, 2002 and the Trademark Law apply in the Republic of Cyprus. All national regulations are consistent with relevant European regulations and international standards. Currently, there is no known case of infringement of intellectual property rights in relation to Czech entities.

Public procurement market

The tendering and management system of public contracts in Cyprus is governed by a uniform law. Current announced tenders can be followed through e-Procurement (in the English version apply the filter “Latest CfTs”, Calls for Tenders) of the Cyprus government portal, on which all public contracts are compulsorily published. General information is available here in English, tender documentation is mainly in Greek. The system also enables company registration and sending notifications about new tenders according to selected fields. After the announcement of each public contract, there is a deadline for submitting formal questions about its conditions and formulating any reservations, which are settled by a fixed date at the latest. The deadline for submission of bids usually follows shortly thereafter. The individual deadlines are separated by a relatively short period of time, and the space for signing up to the tender is a maximum of weeks, therefore, it is recommended to have an offer and relevant documentation prepared in advance. All bids that meet the formal criteria advance to the second round, in which the cheapest bid is automatically selected as the winner. If the exporter has information about the tender being prepared, in the case of state institutions, we recommend contacting representatives of the contracting institution through an official channel, ideally with an offer to present products and services on site, even before it is announced. Within the ministries, this is the position of “Permanent Secretary”, or investment/acquisition departments subordinate to them. in the case of state institutions, we recommend contacting the representative of the contracting institution in an official way, ideally with an offer of a presentation of products and services on site, even before it is advertised. Within the ministries, this is the position of “Permanent Secretary”, or investment/acquisition departments subordinate to them. in the case of state institutions, we recommend contacting the representative of the contracting institution in an official way, ideally with an offer of a presentation of products and services on site, even before it is advertised. Within the ministries, this is the position of “Permanent Secretary”, or investment/acquisition departments subordinate to them.

Payment terms, payment ethics and resolution of commercial disputes

The most common methods of payment for goods (services) provided by a foreign supplier in Cyprus in the long term were:

  • letter of credit (90 days)
  • payment against documents (cash against documents)
  • a banker’s check, which is mainly used for smaller orders, but you can still come across it
  • cash in advance (we do not recommend!)

If the invoice is not paid, it is a good idea to find a lawyer. Anglo-Saxon law is applied in Cyprus, where the system of precedents plays an important role. The use of a local lawyer is therefore expensive but necessary. Since the court proceedings are conducted in the Greek language, the presence of an interpreter is necessary. A certified Greek translation must be available for all documentation. The amount of court costs depends on the length of the court proceedings. The position of the judge is also specific, the course of the proceedings itself is confusing for foreigners. When concluding a business contract, we therefore recommend incorporating an arbitration clause and choosing a place of arbitration outside Cyprus and the law of the Czech Republic or a third country that is closer to us as the applicable law for any dispute. Under the Cypriot legal system, the arbitrator can be anyone the interested parties agree on. You can also use the services of professional arbitrators who are members of the Professional Association of Arbitrators (The Chartered Institute of Arbitrators / Cyprus Branch). Cyprus is a party to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards.

Visas, fees, specific conditions for traveling to the territory

The Republic of Cyprus is a member country of the EU (but not of the Schengen area), and therefore free movement of persons applies to citizens of the Czech Republic in Cyprus – you can travel with a passport or ID card. Czech citizens can stay in the occupied part of Cyprus (the northern part of the country separated by the so-called green line) for a maximum of 90 days and only with a valid passport. The international airports of Larnaca and Paphos or the ports of Larnaca, Limassol, Paphos and Latsi are used to enter the Republic of Cyprus. According to the laws of the Republic of Cyprus, only arrival through these border crossings is considered legal entry to the island, and persons who enter Cyprus through one of them can travel to the northern occupied part of the island (to the so-called “Turkish Republic of Northern Cyprus”, SKTR) without restrictions. To persons who arrived on the island through other border crossings (especially Ercan airport – Greek: Tympou – in SKTR), in extreme cases, they may not be allowed into government-controlled territory. When entering Cyprus through the territory of the so-called SKTR, Czech citizens must present a passport valid for at least another 6 months from the date of arrival – a maximum stay of 90 days. It is possible for Czech citizens to travel between the two parts of Cyprus on the basis of a valid passport or identity card. If tourists come directly to northern Cyprus, they must use a passport to visit the southern part of the island. Traveling by car in Cyprus motorists can use a driver’s license issued by one of the EU member states or a valid international driver’s license during their short stays. When traveling in your own car, you must also present a valid technical license and a so-called green card. You drive on the left. Only designated places are used to cross between the two parts of the divided island. Most car rental companies do not have accident insurance for the other part of Cyprus, and the insurance purchased at the border only works as a compulsory liability. Considering the fact that the so-called Turkish Republic of Northern Cyprus is not internationally recognized by anyone (except Turkey), consular assistance to tourists staying in the northern part of the island can only be provided to a limited extent. Cyprus is a relatively safe country. Payment cards can be used almost everywhere. Public transport works relatively well in seaside resorts, in the capital and around the island, the schedule is worse. Consular assistance to tourists staying in the northern part of the island can only be provided to a limited extent. Cyprus is a relatively safe country. Payment cards can be used almost everywhere. Public transport works relatively well in seaside resorts, in the capital and around the island, the schedule is worse. Consular assistance to tourists staying in the northern part of the island can only be provided to a limited extent. Cyprus is a relatively safe country. Payment cards can be used almost everywhere. Public transport works relatively well in seaside resorts, in the capital and around the island, the schedule is worse.

Employment of citizens from the Czech Republic

Since May 1, 2004, the labor market for EU citizens has been fully liberalized, Czech citizens can work in Cyprus under the same conditions as citizens of the Republic of Cyprus. EU citizens who want to work in Cyprus must register for residence if the intended stay is longer than 3 months and the purpose of the stay is employment. The application is submitted before the expiry of the period of 4 months from the date of arrival at the Civil Registry and Migration Department (CRMD). Failure to comply with this obligation may result in a fine.

Civil Registry and Migration Department (CRMD), PO Box 25196, 1307 Nicosia, Tel.: +357 22 804486, e-mail: [email protected]

The applicant for registration (Yellow slip) must fill in the MEU1 form, apply for the allocation of a social insurance number after obtaining a job in Cyprus and apply for residence registration in person at the CRMD. The following documents must be attached:

  • a completed form (can be downloaded online or provided by any CRMD office) according to the type of residence required (employment, self-employment, study, etc.),
  • a valid passport or other identification document,
  • 2 photos
  • proof of employment issued by the employer and stamped by the Labor Office (provided by the employer).

If the application is also submitted for dependents, a certified copy of the marriage certificate, children’s birth certificates, etc. must be submitted.

Posting of workers to provide services to Cyprus: Posting must be notified to the Ministry of Labour, Welfare and Social Insurance, 7 Lord Byron Avenue, 1463 Nicosia, e-mail: [email protected]

The posting must be announced at least one day before it takes place. There is no specific form for notification. The notification must be in Greek and English, we recommend having an English translation for the employment contract. The following information must be reported:

  • the name of the transmitting company, the address of the headquarters and the legal status
  • details of the company’s legal representative acting for the company and representatives in Cyprus, if any
  • place of performance of the service (address, name, legal status, headquarters of the company where the workers will provide services)
  • posting start date
  • broadcast length
  • the nature of the activity
  • personal identification data of posted workers

The following must be available at the place of service:

  • form E 101 or E 102
  • EHIC – European Health Insurance Card
  • identification document
  • employment contract

In case the posting exceeds 3 months, it is necessary:

  • apply for a stay
  • fill out the MEU 1 form
  • prove sufficient income from employment outside the Republic of Cyprus
  • be insured (the European Health Card is sufficient)
  • submit an employment contract

Medical care

Foreigners with permanent residence in the territory of the Republic of Cyprus have the option of enrolling in the general health care system “GESY” if contributions to the system are paid for them. General health care began to function in 2019 for outpatient treatment, and during 2020 it was extended to include hospitalization, prevention and rehabilitation, and psychologists. On the GESY internet portal you can find a list of general practitioners, pediatricians and specialists who are already members of GESY and whose treatment is covered by the system. The process of registering patients in the system and with a specific general practitioner is also described here in detail. Treatment by doctors who are not part of GESY is paid in cash or through private health insurance. The examination fee ranges from 30-60 EUR.

Fairs and events

7-9 June 2022: IFX Expo International, Limassol – the largest financial B2B trade show focused on the retail FinTech industry, with the aim of connecting blockchain and IT technology providers with forex companies, banks and bank brokers.

In 2022, the annual TAXIDI, the International Tourism Exhibition in Nicosia – a trade fair in the field of tourism, attended by travel agencies, hotel service providers and transport companies focused on inbound and outbound tourism – was not held.

3-5 March 2023: EDUFAIR, Cyprus International Fair Grounds, Nicosia – the largest education fair in the country “Cyprus International Education Fair”, attended by over 10 thousand visitors every year; Czech universities offering paid study programs in English for foreign students are traditionally represented here.

March 18-20, 2022, the 16th year of the SAVENERGY exhibition is intended for those who want to discover energy-efficient solutions that can both reduce costs and save money while contributing to the protection of natural resources.

6 November 2022, Limassol: Wedding Fair (15th edition) – one of the largest fairs in Cyprus covering a wide range of products and services related to weddings and christenings.

30 April – 1 May 2022 Nicosia: Mediterranean Bar Show – The fair aims to educate local and regional B2C consumers and B2B professionals, exchange best practices, practices and hospitality culture. Raising the standards of the local and regional market.

Cyprus Market Entry