What Licenses Are Required for Doing Business in Cyprus

When starting a company in Cyprus, it is essential to obtain the appropriate business license, depending on the type of activities you plan to conduct. Licensing ensures the legal operation of your company in Cyprus, protects the interests of clients and partners, and ensures compliance with legal requirements specific to various industries.

In this article, we’ll explore which types of businesses in Cyprus require licenses, the specific requirements for different sectors, and how the licensing process works for businesses in Cyprus.

Don’t miss out on our guide: How to Register a Company in Cyprus: Step-by-Step Guide.

If you’re looking to establish a business, our legal experts in Cyprus are here to assist with registration and licensing so that you can operate seamlessly and take advantage of the benefits of the Cypriot market.

Which Types of Businesses Require Licenses in Cyprus?

Cyprus imposes strict licensing requirements for many types of activities to ensure compliance with safety and quality standards. Business licensing in Cyprus spans a wide range of sectors, including trade, financial services, insurance, tourism, real estate, and more. Below, we outline the key types of business licenses required in Cyprus:

1. Licenses for Wholesale and Retail Trade in Cyprus

Businesses involved in wholesale or retail trade in Cyprus need to secure the necessary licenses and permits to regulate their activities. The type of trade license depends on the category of goods being sold, and special permits may be required for controlled products such as alcohol, tobacco, pharmaceuticals, animal feed, veterinary medicines, pesticides, drugs, and petroleum products sold at gas stations. Certain products may require additional approvals from local authorities or ministries.

Examples of Special Licenses for Regulated Products:

• Street Trading: To sell products on the street, a street trading license must be obtained from the Municipal Council where the activity will take place. Food and beverage vendors must provide a health certificate from a district doctor. Licenses are issued for a period ranging from one to twelve months.
• Alcohol and Tobacco: A special license is needed for selling alcohol and tobacco products. Licensing is managed through the Cyprus Ministry of Commerce and Industry, and companies must adhere to strict regulations for the sale and storage of these items.
• Medications and Medical Devices: Pharmacies and stores selling medical products must obtain approval from the Ministry of Health and comply with stringent storage and inventory standards.

2. Licenses for Investment Companies

The Cyprus Securities and Exchange Commission (CySEC) regulates all investment companies, including forex brokers and asset managers. Licensing of investment companies in Cyprus follows the CIF (Cyprus Investment Firm) license requirements, which allows companies to offer investment services across Cyprus and the broader European market, in line with the Markets in Financial Instruments Directive (MiFID II).

Requirements:

• Adequate share capital for company stability.
• Verified qualifications of staff and certified auditors.
• Compliance with international reporting standards and regular financial reporting.

3. Licensing for Gaming Businesses in Cyprus

A business license is mandatory for companies engaged in gambling activities in Cyprus. The gambling sector, including online casinos and betting platforms, is tightly regulated. Companies offering such services must obtain licenses from the National Betting Authority (NBA). To acquire a license, companies must pay a registration fee and maintain the minimum capital requirements set for their license type, ensuring financial stability and player payouts.

Types of Licenses:

• Class “A” Licenses: For traditional offline betting (e.g., at betting shops).
• Class “B” Licenses: For online betting, including sports betting and casinos.
• Requirements: Data protection, adherence to responsible gaming standards, and financial transparency.

4. Licenses for Insurance Companies in Cyprus

Companies providing insurance services in Cyprus must obtain the relevant license in accordance with Cypriot law. The insurance sector is regulated by the Insurance Companies Control Service (ICCS), which ensures companies meet high standards of financial stability and oversight. Regulation in this field is aimed at protecting client interests and ensuring the financial security of insurance firms, making Cyprus an appealing jurisdiction for both local and international insurance operators.

Types of Licenses:
Licenses are categorized based on the type of insurance offered, including health insurance, property insurance, auto insurance, life insurance, and specialized insurance products like corporate or property insurance. Companies may provide one or multiple types of insurance based on their license.

Requirements:

• Reserve capital to cover insurance risks.
• Regular auditing and risk management to safeguard clients.
• Annual financial reporting and adherence to insurance reporting standards.

5. Fund Management Companies

Cyprus is a favorable jurisdiction for setting up and managing investment funds due to its regulatory benefits and support from the Cyprus Securities and Exchange Commission (CySEC). Companies managing Alternative Investment Funds (AIFs) and UCITS (Undertakings for Collective Investment in Transferable Securities) need to obtain a license.

Types of Licenses:

• AIF (Alternative Investment Funds): Aimed at specialized investments such as real estate, private companies, and derivatives. AIFs can be open-ended or closed-ended and cater to both private and institutional investors.
• UCITS: These are collective investment schemes targeting retail investors, regulated by EU standards, offering high protection levels and allowing operations throughout the EU. UCITS funds must adhere to asset diversification and risk management requirements, making them popular with retail investors.

Requirements: Adequate capital, compliance with EU regulations, and established risk management and reporting standards.

6. Tourism and Hospitality Companies

Businesses offering tourism services, such as agencies and operators, must register with the Cyprus Tourism Organization (CTO) and obtain the necessary licenses. These licenses ensure that companies meet quality and safety standards. Additionally, setting up a travel agency in the Republic of Cyprus requires obtaining a tourism license from the Ministry of Tourism.

Types of Licenses:

• Tourism Activity License for agencies and tour operators.
• Rental License: Companies offering short-term rentals (e.g., vacation rentals, car rentals) must secure a specific rental license. This applies to both agencies and individuals renting out properties through platforms or directly.

Requirements: Compliance with safety standards, insurance, and high-quality service delivery.

7. Real Estate Companies

To offer real estate services in Cyprus, companies must complete a registration and licensing process. This sector is regulated by the Council of Real Estate Agents, ensuring transparency, ethical conduct, and consumer protection. A real estate license is issued after registration in the Register of Real Estate Agents and requires annual renewal.

• Registration in the Real Estate Agents’ Register: Companies wishing to offer services such as buying, selling, renting, or managing properties must register in this official register. This applies to both corporate entities and individuals operating in the real estate sector.
• Licensing and Annual Renewal: After registration, the company receives a license certificate, which must be renewed annually.

With proper licensing, businesses in Cyprus can operate within a regulated environment that promotes trust, transparency, and growth across various sectors.

The Licensing Process in Cyprus

The process of applying for a business license in Cyprus involves several key steps:

Step 1: Assess Legal Requirements
Before starting the licensing process, it’s crucial to understand the legal requirements and standards you need to meet. For example, certain types of businesses require a minimum share capital and the preparation of reports according to international standards. Understanding these requirements will help you obtain a business license in Cyprus smoothly, without delays or rejections.

Step 2: Prepare Documentation
To apply for a license in Cyprus, a range of documents is required, including resumes and qualification certificates, financial statements, documents on the management team and shareholders (including proof of their experience and qualifications), and more. Certain licenses, such as those in the financial sector, may require additional documentation to comply with international standards (AML, KYC).

Step 3: Submit Your Application
The license application is submitted to the relevant regulatory authority, such as CySEC, CBC, or NBA. The review process can take anywhere from a few weeks to several months, depending on the complexity of the requirements and the type of license. A state fee is also required to process the application, and the amount varies according to the license type.

Step 4: Compliance Verification
After submitting the documents, the regulatory body will review the application to ensure compliance with safety standards and financial reporting controls.

Step 5: Obtain the License
Once all checks are completed, the company receives a business license in Cyprus, confirming that it meets the established requirements and standards. Holding a license enables you to operate legally and safely.

Feod Group’s legal experts in Cyprus provide professional assistance with obtaining business licenses across various sectors. Our team will help you prepare all the necessary documents, navigate the licensing process, and ensure you meet all the requirements for success.

Contact us for a consultation and learn more about how to secure a business license in Cyprus and the benefits it can bring to your company!