Money & paperwork
Sole Trader vs Ltd
Two tools in one: compare take-home pay as a sole trader versus a Cyprus Ltd, then estimate what it actually costs to set up and run a limited company.
Answer 6 questions to get a personalised recommendation: Sole Trader, Cyprus Ltd, or a Holding Structure, with estimated tax rates.
Your situation
Recommended structure
Cyprus Ltd (Private Company)
A Cyprus Ltd makes strong sense at €80,000/year. The 15% corporate rate plus 0% on dividends as a non-dom gives you an estimated effective rate of ~14%, materially lower than the sole trader rate of ~30%.
Estimated effective tax rate
Estimates assume ~20% deductible expenses. Actual rates vary. Non-dom status: Yes.
How the estimate is built
Both columns use the same taxable profit of €64,000 a year.
Sole trader
- Income tax (2026 bands)
- €11,100
- Social insurance (16.6%, capped at €68,904)
- €10,624
- GeSY (4%)
- €2,560
- Total
- €24,284
Cyprus Ltd (all profit paid as dividends)
- Corporate tax (15%)
- €9,600
- SDC on dividend (0% as a non-dom)
- €0
- GeSY on dividend (2.65%)
- €1,442
- Total
- €11,042
Sole trader social insurance is charged on profit up to the maximum insurable earnings and is not deducted from taxable income here. The Ltd column assumes no director's salary, so it has no social insurance.
Key advantages for your profile
- 15% flat corporate tax, competitive within the EU
- As a non-dom, dividend extraction is 0% tax, highly efficient
- Limited liability protects personal assets
- Easier to bring in co-founders, issue options, or raise investment
- Can accumulate retained earnings at low tax rates
- Your high % of foreign income suits a Cyprus Ltd receiving foreign-source income
Risks and complications
- Annual audit required (audited financial statements mandatory)
- Company secretarial obligations: annual returns, registered office
- Payroll setup required if paying yourself a salary
- Minimum 2 weeks to incorporate; legal/accounting fees €500–2,000/year
- Director and beneficial ownership obligations under CRS/BEPS
Recommended next steps
- 1.Engage a Cyprus lawyer to incorporate the company (€800–1,500 typical)
- 2.Open a corporate bank account (allow 3–5 weeks)
- 3.Register for corporate tax and VAT with the Tax Department
- 4.Appoint a local registered agent and company secretary
- 5.Set up payroll if you take a director's salary
- 6.File annual audited accounts and corporate tax return
Next steps
Sources
Last checked October 2026.
- Tax Department: Tax reform 2026 for individuals (Greek, PDF)
- Tax Department: Special Defence Contribution reform 2026 (Greek, PDF)
- Tax Department: Income Tax Law amendments 2026 (Greek, PDF)
- Tax Department: Guide to the 2025 tax return (Greek, PDF)
- Business in Cyprus: Social insurance registration and contributions
- Social Insurance Services: Basic insurable earnings 1981-2026
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