Starting a Business in Cyprus

Starting a Business in Cyprus

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Starting a business in Cyprus involves more than registering a company. The full process includes choosing and testing a business idea, understanding the Cyprus market, choosing a legal structure, registering the business where required, sorting tax, VAT and accounting, opening banking and payment channels, checking licences and sector rules, hiring staff or contractors, marketing and launching.

Starting a Business in Cyprus Procedure

This guide is for Cyprus residents, EU and non-EU founders, UK entrepreneurs considering Cyprus, digital nomads, remote consultants, ecommerce sellers, local service businesses, property, hospitality, tourism and professional services businesses, and overseas businesses expanding into Cyprus.

It is important to understand that “starting a business” is broader than “forming a company”. Company formation creates the legal entity, but the business also needs a practical operating plan, tax setup, banking, compliance, customers and a route to market.

Step 1: Decide whether Cyprus is the Right Place for your Business

Cyprus can be an attractive location for entrepreneurs and international businesses. It is an EU member state, has a strategic location between Europe, the Middle East and North Africa, and offers an established professional services ecosystem. English is widely used in business, and Cyprus has company-law, tax and banking infrastructure that is familiar to many international founders.

The country also has opportunities in sectors such as tourism, real estate, shipping, finance, technology, professional services, hospitality, ecommerce and international trade. For founders relocating personally, lifestyle can also be part of the appeal.

Before committing, ask practical questions. Will your customers be in Cyprus, the EU or internationally? Will the business need physical premises? Will you live in Cyprus or manage the business remotely? Will the company need employees in Cyprus? Are there sector-specific licences? Will Cyprus banking and payment processing support the business model? Does the business need Cyprus tax residence, or only a Cyprus presence?

Cyprus may be suitable where there is a genuine commercial reason to operate there. It should not be chosen only because of perceived tax advantages. A founder’s personal tax residence, immigration status and overseas obligations may also matter.

For international founders, the right structure should support the business model, customer base, management location, banking requirements and long-term plans.

Step 2: Research the Cyprus Market before Launching

Market research is important because Cyprus is a smaller market than the UK, Germany or France. Local demand, purchasing habits and seasonality can vary significantly by region.

Tourism can create strong seasonal opportunities, but it can also create cash-flow risk. A business that performs well in summer may need a plan for quieter months.

Research should cover the target customer, local versus international demand, competitor pricing, language expectations, tourist versus resident customer behaviour, online search demand, local regulations, supplier access, labour availability and seasonality.

Cyprus-specific market differences should also be considered. Nicosia may suit business, professional and government-related services. Limassol has strong international, finance, technology, shipping and expat markets. Larnaca and Paphos may suit tourism, lifestyle, property and hospitality businesses. Smaller towns may have less competition, but they may also have narrower demand.

Research methods can include competitor websites, Google reviews, social media groups, local directories, Chamber of Commerce resources, industry associations, government business portals and direct conversations with residents, expats and potential customers.

Founders should test demand before signing leases, buying stock or hiring staff. A business model that works in the UK or another EU country may not transfer directly to Cyprus without adaptation.

Step 3: Choose a Business Model that fits your Market

A business model explains how the business delivers value and makes money. In Cyprus, common models include local services, professional consulting, tourism and hospitality, real estate support services, ecommerce, import and export, digital services and SaaS, education and training, wellness, beauty and fitness, food and beverage, and B2B services for international companies.

The right model depends on the customer, cost base, seasonality and scalability. A local customer business is different from an international service business. A seasonal tourism business is different from a year-round professional service. A physical-premises business is different from an online operation. A product business has different costs and risks from a service business.

Founders should ask whether the business can make money year-round, whether margins are high enough after VAT, rent, wages and supplier costs, and whether demand is driven by residents, tourists, expats or companies.

It is also useful to consider whether the business is easy to scale, whether it requires permits or specialist staff, and whether regulated approval is needed.

Some founders begin with a low-cost service model before committing to premises, stock or employees. This can reduce risk while the business tests demand and builds early customer relationships.

Step 4: Create a practical Business Plan

A business plan should help the founder make better decisions, not just satisfy banks or investors. It should explain what the business will do, who it will serve, how it will make money and what resources it needs.

A Cyprus business plan should usually include the business concept, target customers, market research, competitor analysis, legal structure, startup costs, pricing, marketing plan, operations, staffing, tax and VAT assumptions, funding needs, risks and contingency planning.

Cyprus-specific planning points may include local versus international customers, seasonal cash flow, rent and premises costs, labour availability, supplier and import costs, VAT registration threshold, licensing requirements, banking and payment processing.

Overseas founders may need a stronger business plan for bank account opening, immigration or relocation planning, investor discussions, commercial leases and payment providers. Banks, landlords and service providers may want to understand the activity, source of funds, expected countries of trade and commercial substance.

A simple test is whether the business plan can explain how the first 10 customers will be acquired. If it cannot, the launch plan needs more work.

The plan should be specific, realistic and based on evidence rather than assumptions.

Step 5: Choose the right Legal Structure

The business structure affects liability, tax, control, ownership, banking, investor readiness, public filings and accounting costs.

StructureBest forMain benefitMain consideration
Self-employed / sole traderFreelancers, consultants, small local servicesSimpler setupPersonal responsibility and tax treatment
PartnershipTwo or more people trading togetherShared business ownershipNeed clear agreement between partners
Private limited companyTrading, international business, ecommerce, investment, growthSeparate legal entityMore admin, accounting and filings
Branch of overseas companyExisting foreign company entering CyprusDirect extension of parentParent may remain exposed to branch obligations
Social or non-profit structureCommunity, association or social projectsPurpose-ledSpecific governance and reporting needs

A limited company may make sense where there are business partners, higher risks, international trade, investors, long-term brand-building plans or a need for separate legal personality.

Self-employment may be enough where the founder is testing a small freelance activity, offering low-risk services, has no employees and has limited startup costs.

Partnerships may suit two or more people trading together, but roles, profit shares, exit terms and decision-making should be agreed clearly.

Overseas businesses may need to compare a Cyprus branch and a Cyprus subsidiary. The right choice depends on liability, tax, reporting, banking and commercial perception.

The Cyprus Companies Section lists business-entity options including companies, partnerships, business names, European companies and overseas companies.

STEP 6: Register the Business and Complete the Essential Setup

The registration process depends on the structure chosen.

For a company, the usual steps include choosing and approving a company name, preparing incorporation documents, appointing directors, secretary and shareholders, registering with the Registrar of Companies and keeping beneficial ownership details up to date.

For self-employed people or partnerships, founders should check registration requirements with the relevant authorities, register a business name where needed and register for tax and social insurance obligations.

For overseas companies, the business should consider whether a branch or subsidiary is more suitable, and whether the activity creates a permanent establishment or tax registration need.

After registration, the business should deal with tax registration, VAT assessment, bank or EMI account setup, accounting systems, licences if needed and employer registration before hiring staff.

Cyprus has official business portals covering starting a business and business-entity services. The Business in Cyprus portal provides a starting-business checklist, while the Registrar lists services for incorporation, annual returns and beneficial-owner updates.

Founders who need the detailed incorporation process can review the Cyprus company formation page.

Step 7: Understand Tax, VAT and Accounting before you Trade

Tax planning should happen before the first invoice is issued. The main tax areas include income tax or corporation tax depending on structure, VAT, social insurance, payroll taxes and employer obligations, Defence Contribution and other Cyprus-specific taxes where relevant.

VAT should be considered early. Cyprus VAT registration is compulsory where taxable supplies exceed €15,600 over the relevant 12-month period. Voluntary registration may be useful for some B2B businesses, particularly where input VAT recovery is important.

VAT can be especially relevant for ecommerce, imports, digital services, cross-border trade, EU customers, hospitality, consulting and property-related activity. VAT and tax outcomes depend on the transaction, not just the company’s country of registration.

Accounting should be set up from day one. The business should keep invoices, receipts, contracts, bank records and payroll records. Accounting software can help track income, expenses, VAT, cash flow and upcoming obligations.

Tax advice matters because Cyprus businesses may have cross-border issues. These can include personal tax residence, company tax residence, double tax treaties, cross-border services, permanent establishment risk and management and control.

Overseas founders should not assume that a Cyprus company automatically solves tax exposure in another country. The owner’s residence, directors’ location, customer base and operating model may all affect the tax position.

Step 8: Open a Business Bank Account and set up Payments

Banking is often one of the most practical hurdles, especially for non-resident founders.

Options may include a Cyprus bank, international bank, electronic money institution, merchant processor or marketplace payment account. The right choice depends on the business model, customer base, currencies and compliance profile.

Providers may request ID and proof of address, incorporation or registration documents, tax identification details, business plan, website or commercial proof, contracts, invoices or supplier agreements, UBO information, source of funds and expected countries of trade.

Payment setup will vary by business type. A local shop may need a card terminal and local bank account. An ecommerce business may need a payment gateway, merchant account and chargeback process. A consultant may need a multi-currency account and invoicing system. A tourism business may need online booking and deposit collection. A B2B business may need SEPA transfers, invoice payment and currency management.

A bank account is not guaranteed simply because the business has been registered. Founders should prepare documents early and ensure the business activity is clearly explained.

Step 9: Check Licences, Permits and Sector Rules

Some businesses can start with basic registration and tax setup. Others need permits before trading.

Businesses likely to need licences or approvals include restaurants, cafés and food businesses, alcohol sales, hotels, holiday rentals and tourism services, estate agents and property-related services, financial services, insurance services, healthcare and care services, education or childcare, construction and trades, transport and logistics, import or export of certain goods, beauty, wellness and fitness premises, events and entertainment.

Local authority issues may include premises use, planning, signage, health and safety, fire safety, waste management and food hygiene.

Online businesses should also consider consumer protection, terms and conditions, privacy notices, returns and refunds, and data protection.

Licence requirements depend on the exact activity and location. A hospitality business in Limassol, a holiday rental in Paphos, an ecommerce importer and a consulting firm may all face different rules.

Founders should check licensing before signing contracts, opening premises, taking bookings or advertising regulated services.

Step 10: Find Premises, Suppliers and Operating Resources

Premises options include a home office, coworking space, serviced office, retail shop, restaurant or café, workshop, warehouse or tourism premises.

Before signing a lease, check planning use, licence suitability, rent, deposit, service charges, utilities, internet and infrastructure, footfall, parking and deliveries, fit-out costs, lease term, exit clauses and seasonal demand.

Physical businesses in Cyprus often need more pre-launch planning than remote consulting or online services. A café, shop, salon or tourism business may need premises, permits, staff, suppliers, equipment and fit-out before launch.

Supplier planning should also be considered early. This may include local suppliers, EU suppliers, non-EU imports, customs, logistics, delivery timelines, payment terms and backup suppliers.

Equipment and systems may include a POS system, booking software, CRM, accounting software, stock management tools, website and ecommerce platform.

The aim is to build an operating model that can deliver consistently, not only launch quickly.

Step 11: Hire Staff or Work with Contractors

Hiring requires planning before the first employee starts.

The official Business in Cyprus portal states that every employer must register in the Register of Employers of the Social Insurance Services before recruiting personnel. The Gov.cy personnel hiring service also states that employers need to inform Social Security Services about the recruitment of new employees.

Employment considerations include employment contracts, pay and working hours, social insurance contributions, annual leave, health and safety, payroll, termination rules and work permits where non-EU nationals are involved.

Businesses using contractors and freelancers should use written agreements. These should define deliverables, payment terms, confidentiality and intellectual property ownership. Misclassification risk should also be considered where a contractor works like an employee in practice.

Hiring challenges in Cyprus may include skills availability, language requirements, seasonal employment and competition for staff in hospitality, technology and professional services.

Many small businesses outsource support early. This may include an accountant, bookkeeper, lawyer, marketing specialist, virtual assistant or HR and payroll provider.

Step 12: Protect your Brand, Website and Customer Data

Company registration does not automatically protect a brand. Before launch, founders should check the business name, domain, social media handles and trade marks.

Depending on where the business trades, a Cyprus, EU or international trade mark strategy may be appropriate.

Intellectual property may include the logo, website copy, product designs, software, photography, training materials and customer lists. If freelancers create work for the business, contracts should make sure the intellectual property is assigned properly.

Website essentials may include terms and conditions, privacy notice, cookie notice where relevant, returns and refunds policy for ecommerce, and clear business details.

Data protection applies if the business handles personal data of customers, staff, subscribers, leads or suppliers. Key principles include lawful basis, data minimisation, secure storage, access controls, retention periods and processor agreements.

Cyber risk should also be considered, especially for ecommerce, booking platforms, professional services and any business handling payment details or client records.

Step 13: Plan your Launch and Marketing in Cyprus

Marketing should reflect whether the business is local, tourism-led, B2B, international or online.

Possible channels include a website and SEO, Google Business Profile, local directories, social media, paid search, partnerships, referral marketing, local events, expat communities, influencer or creator partnerships, email marketing and marketplace platforms.

Local businesses may need reviews, location pages, signage, community relationships and local-language considerations. Tourism businesses may need booking platforms, seasonal campaigns, hotel partnerships, travel reviews and an early deposit strategy.

B2B and professional services businesses may rely on LinkedIn, referrals, networking, case studies and partnerships with accountants, lawyers, relocation consultants or agencies.

Founders should track enquiries, bookings, conversion rate, cost per lead, repeat customers and seasonality. A business that gets enquiries but few sales may need to improve its pricing, offer, trust signals or follow-up process.

Marketing should begin before launch. Waiting until the business is fully open can create slow early sales and unnecessary cash-flow pressure.

Step 14: Common Mistakes when Starting a Business in Cyprus

Common mistakes include treating Cyprus only as a tax choice rather than a real business location, skipping market research and assuming local demand is the same as in the UK or another EU country.

Other mistakes include signing a lease before checking licences, underestimating seasonality, not budgeting for VAT, accounting, payroll and professional advice, and ignoring banking timelines.

Founders may also choose the wrong legal structure, register a company before validating the business model, forget social insurance registration before hiring or rely on informal arrangements with co-founders or contractors.

Brand and compliance issues are also common. These include not checking trade marks before launching, mixing personal and business money, ignoring data protection and underestimating language, cultural and local relationship factors.

Starting a business in Cyprus can be attractive, but it should be approached as a practical commercial project with proper planning, not only as a registration exercise.

FAQs about starting a business in Cyprus

Can a foreigner start a business in Cyprus?

Yes, many non-Cyprus residents can start or own a business in Cyprus. However, tax, banking, immigration, right-to-work and sector rules should be considered separately.

Is starting a business in Cyprus the same as registering a company?

No. Registering a company creates the legal entity. Starting a business also involves market research, tax, VAT, banking, licences, premises, staff, suppliers, marketing and operations.

What is the easiest business to start in Cyprus?

Low-cost service businesses, consulting and remote digital services are often easier to start than businesses needing premises, stock, staff or licences.

Do I need a business plan to start in Cyprus?

Not always legally, but it is useful for funding, banking, relocation, partnerships, leases and testing whether the idea can make money.

Do I need to register for VAT in Cyprus straight away?

Not always. Registration is generally compulsory once taxable supplies exceed the €15,600 threshold over the relevant period, although voluntary or transaction-specific registration may apply.

Can I run a Cyprus business from abroad?

Operationally, some businesses can be managed remotely, but tax residence, management and control, substance, banking and local compliance should be reviewed carefully.

Do I need a Cyprus bank account to start trading?

A Cyprus bank account may be useful or expected, but some businesses use EMIs or international accounts. The right option depends on customers, currencies, payment processors and compliance requirements.

Can I start a business in Cyprus from home?

Often possible for online or service businesses, but check tenancy, planning, licensing, insurance, customer visits and data-protection issues.

What licences do I need to start a business in Cyprus?

It depends on the activity. Food, hospitality, tourism, property, finance, healthcare, transport, education and events often need specific permits or approvals.

When do I need to register as an employer in Cyprus?

Before recruiting personnel, employers must register with the Social Insurance Services Register of Employers.

Key Contacts

Timothy Hampton

Head of Corporate Services, Director

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Sacha J. Farrugia

Senior Manager - Business Development

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We are truly glad to have CSB Group as a business partner! Their expertise and careful support have made a huge impact and yielded great value. CSB Group has greatly contributed to making such a challenging year like 2020 go by pretty smoothly, with record-breaking results! We confidently recommend CSB Group to anyone looking for the finest partners!

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CSB has been managing The EveryMatrix Employee Trust since 2022. CSB have vast experience and knowledge in the Trust Management sector and other corporate-related matters. As Trustees, they have continuously and promptly assisted the Trust throughout any corporate-related process involving our wider group of companies. We look forward to continuing this collaboration in the future!

EveryMatrix Group

CSB Group consistently provide quality support across corporate, financial and legal support service requirements, delivering value at all levels. An effective and efficient team, always approachable, and go about their business in a professional manner, where the customer is considered paramount.

LEGOLAS INVEST LTD

"We have always received good service from CSB Group. Timing and quality have always met our expectations and everything is communicated in a professional and timely manner. Would definitely recommend to anyone considering."

FAIR PLAY BETS

We are impressed by CSB's continuous ambition to exceed customer’s expectations. We truly believe in long lasting partnerships, so in the past 15 years we were lucky enough to take advantage of CSB's international reach and professional services. CSB's industry experts take the administrational burden off our shoulders and let us focus on what matters - business! CSB made us both, more professional and more successful in our international commercial activities. Thank you CSB, smarter business truly starts here!

Gottfried J. Sint

Noricum Investments Ltd

"Roger and team do a great job and we are very happy with the services provided by CSB across all areas."

Jim Purcell

COO

MiFinity

I have worked with CSB for several years, and have always found them highly professional and courteous. They are always happy to help.

Bobby Virdee

GAMING MEDIA GROUP

CSB Group has been a partner to Stratus Capital Solutions ever since the structuring and set up of the company, which was done in a very efficient and professional manner, where CSB also reviewed the bigger picture and possible future requirements. Due to the excellent service and knowledge provided in the structuring of the company, we also engaged CSB for tax and accounting services besides the corporate secretary functions. We at Stratus Capital Solutions Ltd. are very pleased with the partnership with CSB Group and their excellent employees.

Armand van Houten

Founding Member of the Board

Stratus Capital Solutions Ltd

We at MIDI plc have engaged the services of CSB Group on a trusteeship basis to serve a fundamental role in our secured bond issue. Their team has always been accommodating, well-prepared and have always ensured that our requirements are met in a most timely and efficient fashion. Their services have indeed exceeded our expectations. CSB Group were identified due to their knowledge and expertise in fiduciary obligations, amongst other qualities.

MIDI PLC

In 2018 we took the decision to use CSB Group to help set up a company and apply for a B2B licence in Malta. After contacting a number of different organisations CSB stood out in terms of their pre-sales response, it was timely informative and presented in a manner which showed that they understood us and our needs. Thankfully the focus on Price, Quality and Service still continues today and the team at CSB are more like an extension to our team, than just a trusted partner or supplier.

Iforium

Thank you for making everything run perfectly smooth for us. Your team looks after us as if we were their parents and they are everything one can wish for; accurate, fast and with a vast knowledge. We are very fond of CSB Group and we are more than content.

Retired Swiss Entrepreneur

We at Staern Ltd are glad that we work with CSB Group. Experienced, dedicated and supportive specialists. People you can rely on even in very complex business challenges such as VFA Licence application. People you can trust. People who can motivate and continue to go forward even in very complex business challenges. We are very glad to work with CSB Group on our VFA Service Provider Licence.

Staern Ltd

A highly competent team of experienced professionals, dedicated to delivering exceptional corporate services with expertise and precision.

Luca Dalmasso

MERIDIANA Limited

Recientemente hemos recurrido a los servicios de CSB Group para obtener asistencia en la constitución de una nueva empresa. Descubrimos que fueron meticulosos en su atención a los detalles, rápidos en sus respuestas y que el proceso se llevó a cabo de manera extremadamente eficiente. No dudaríamos en volver a utilizar a CSB para cualquier requisito futuro.

Barry Houghton

Primero, UK

We have been working with CSB for a few months now. They have been absolutely wonderful with us, guiding us every step of the way through our company setup in Malta. We value them and will continue working with them, a big thank you!

Irina Negoita

Investments Reports Limited

Quisiera expresar mi absoluta satisfacción por mi trato con Sacha Farrugia en el proceso de apertura de mi empresa durante las últimas semanas. Me quedé realmente impresionado con su nivel de profesionalidad y servicio al cliente. Hizo todo lo posible para asegurarse de que todas mis preguntas y curiosidades fueran atendidas y comprendidas, y su nivel de conocimiento fue excelente. No tendría ningún problema en recomendar su empresa a otras personas en el futuro y continuaré utilizando sus servicios.

Phoenix Classic Charters Limited

"Very highly recommend, professional and great people to work with."

Frank Agius

Financing Director

CF Estates

Carousel Group partnered with CSB back in 2018 when we began this venture and they have guided and supported us through every step of the process. Despite how arduous and complex licensing a gaming business has become in recent years, we were lucky to have CSB in our corner to ensure success and build the foundations for a high-growth international business.

Mr. Daniel Graetzer

Founder

Carousel Group

We have recently used the services of CSB Group to assist with the formation of a new company. We found they were meticulous in their attention to detail, speedy with their responses and the process was carried out extremely efficiently. We would have no hesitation in using CSB for any future requirements.

Barry Houghton

Primero, UK

‘I approached CSB Group in late 2022 to open a discretionary family trust. CSB have the right set up and an experienced and friendly team who helped me act on the pressing investment decisions of the trust and with opening a bank account quite smoothly. While I took the decision to establish the trust with caution, now that it is up and running, I am pleased with the result.'

UK Expat Residing in Malta

Hemos utilizado los servicios de CSB Group en Malta para inscribir nuestra empresa y nuestro barco bajo la bandera de Malta, y siempre he estado completamente satisfecho con su desempeño. ¡Hacen un trabajo excelente, son siempre puntuales y ofrecen las tarifas más competitivas de toda Europa! ¡Un equipo joven e inteligente! También hemos recurrido a ellos en otras ocasiones para trabajos legales adicionales, y desde hace poco utilizo su servicio de contabilidad para cumplir con todos los requisitos del IVA y completar nuestros balances de situación. Recomiendo los servicios de CSB Group.

Paolo Orlandi

Kite Investimenti Limited of Cyclos II

Erst kürzlich haben wir die Dienste der CSB Group in Anspruch genommen, um uns bei der Gründung eines neuen Unternehmens zu unterstützen zu lassen. Dabei haben sie sehr sorgfältig und detailgenau gearbeitet und stets rasch auf unsere Fragen geantwortet. Das Verfahren wurde äußerst effizient durchgeführt. Gerne würden wir CSB bei Bedarf wieder beauftragen.

Barry Houghton

Primero, UK

We have had the good fortune of working with Andres and his team at CSB on a variety of citizenship and residency matters for our clients. CSB has given us thoughtful and thorough advice and been an invaluable partner. Despite being many time zones and thousands of miles away, the team are incredibly responsive and willing to speak at any hour of the day. We would certainly recommend them to anyone seeking best-in-class legal advice related to global citizenship and residency issues.

An independent investment office

We’ve been using CSB services for four years and they have been a great asset to our business. We’ve been very impressed with their friendliness and responsiveness and with the staff constantly producing quality work in every aspect of their business – from book keeping to tax preparation. We’re glad to have CSB as part of our team.

EBANX

'I want to applaud CSB Group, and specifically Malcolm Ferrante and Michela Pace for their endless patience, relentless dedication, speedy efficiency, and personal attention when it comes to establishing my Tax Residency in Malta in record time. The whole process was managed as promised, above and beyond my expectations. Undoubtedly highly recommended!'

Tax Residency Client

"CSB were very professional in organising and delivering internal online training to our team. They delivered the training with enthusiasm and commitment and were dedicated to addressing all queries from the team. I would recommend them to anyone who needs professional consulting work."

Annabel Bonavia

Finance Manager

Attard & Co. Industrial Ltd.

"CSB provides us with a wide range of professional services and we are equally happy with any of them. We’d recommend CSB to any company looking for a solid partner to support its Malta-based business."

ROYAL PANDA

CSB Group have been our service providers for the last few years and have assisted us in a range of services including accounting, payroll, legal and corporate services. In our experience, CSB has proved to be of great use.

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AT YOUR SERVICE

Need our assistance with Corporate Services?

CSB Group is a leading and authorised Corporate Service Provider in Malta with over 35 years experience in the commercial sphere. Get support from our specialised professionals.

Smarter business
starts here.

T: +356 2557 2557

F: +356 2557 2558

E: [email protected]