Hiring globally? Discover key employment law changes across 20+ countries happening in 2025 to ensure your team remains compliant.
Download the GuideIndependent contracting in Cyprus allows individuals to provide services to businesses without being considered employees. Independent contractors, often referred to as freelancers or self-employed individuals, are typically hired to complete specific tasks or projects rather than being integrated into the company’s workforce. They are responsible for their own taxes, social security contributions, and other statutory obligations.
Independent contracting is governed by the Civil Code and contract law, which provide the framework for agreements between contractors and clients. Unlike employees, independent contractors are not covered by employment protection laws such as those governing notice periods, termination procedures, or paid leave.
Contracts should also ensure that the contractor is not entitled to benefits such as paid leave or redundancy pay, which are reserved for employees under Cyprus labour law.
In Cyprus, the distinction between an employee and an independent contractor is based on various factors, including the level of control exercised by the hiring entity and the nature of the working relationship. Factors that indicate someone is an employee include:
If these conditions apply, the individual is more likely to be classified as an employee rather than an independent contractor.
The key differences between an employee and an independent contractor in Cyprus include:
Correct classification is essential to ensure compliance with Cypriot labour laws and avoid penalties.
There is no specific legal limit on the length of independent contractor contracts in Cyprus, as long as the contract specifies that the relationship is project-based or task-specific and does not resemble an employment relationship. Contracts can be for short-term projects or extended over multiple years, depending on the nature of the work. However, contractors should not be engaged indefinitely under conditions that resemble employment, as this could risk reclassification as an employee.
Fixed-term employment contracts in Cyprus are allowed, but if a fixed-term contract is renewed more than twice, it may automatically convert into an indefinite contract. This is to prevent employers from using repeated short-term contracts to bypass employment protections for long-term employees.
Failure to comply with these limitations can result in the worker being considered a permanent employee, with all corresponding rights and protections under Cypriot labour law.
Employers who misclassify employees as independent contractors to avoid providing statutory benefits can face significant penalties. If an individual is misclassified, they may be entitled to:
The Department of Labour or Social Insurance Department can impose fines and require the company to pay backdated social insurance contributions. Additionally, the employer may face claims through the Labour Disputes Court.
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