As an EU member where the majority of people speak very good English, Cyprus is a very attractive country for British companies wanting to operate abroad. However, although EU rules make it relatively easy for companies and individuals to set up business in Cyprus, there are a number of issues to take into account when thinking about Human Resources.
Around 95% of the population speaks English, and you’ll find most companies are happy to conduct business in this language. The Cypriot Government has an English version of its website with a lot of useful information about setting up a business in the country, but you will also need people fluent in Greek on board, as some of the information and forms are in Greek only.
Employment
It’s relatively straightforward to employ an EU national in Cyprus, but there are local labour laws, administrative rulings and precedents to take into account, so having an HR function with Cypriot expertise on board is vital. The HR laws affect issues including overseeing employees and their organisations, the minimum wage, holiday entitlement, maternity leave, trade unions, disability, equal opportunities etc. The employment of staff can be affected by many factors, such as longevity of service, social charges, collective agreements, qualification and experience, and so on.
Social Insurance
Social Insurance is compulsory for every employee in the Republic of Cyprus, and every employer has to register with the Employer’s Register of the Social Insurance Services, so you’ll need someone able to set up and administer it. The contribution is 17.9% on every employee’s insurable earnings, and it is divided to contributions paid by the employer, the employee and the State in the proportion of 6.8%, 6.8% and 4.3%, respectively.
Trade Unions
Cyprus has a relatively high level of trade union organisation – between 55% to 58% according to government statistics. There are two major trade union confederations, the PEO and the SEK, and a smaller one, the DEOK. Your HR function will include negotiations between unions and employers’ associations to determine the terms of employment, including payment levels and increases. Such agreements are usually renewed every three years. Visit the Department of Labour Relations website for more information.
Hiring
There are several considerations that are absolutely vital to the success of starting up in a completely new culture. The person in charge of your operation must have a solid understanding of the local market as well as good knowledge of your business, so they can start to build up a good workforce of local and international employees. Try to make sure your new hires reflect the local community – an office full of expats with little regional knowledge or language skills can set the whole operation up for failure.
Setting up a company in Cyprus can be a headache if you’re unfamiliar with the area, which is why most businesses use specialist organisations to act on their behalf when starting their Cyprus company formation. These companies have the experience and expertise necessary to ensure you’re set to go quickly, efficiently and legally, leaving you to do what you do best – run your business and make profits!
Image of business organisation from Flickr
