GILS Corporate law: Cyprus

CYPRUS 

(1) Forms of doing business and Establishment

1.1. What are the options for establishing a company's presence in a country (branch, representative office, subsidiary, etc.), and what are their key advantages and limitations?

Establishing a presence in Cyprus can be advantageous due to its strategic location, favourable tax regime, and business-friendly environment. Below are the common options for setting up a company's presence in Cyprus, along with their key advantages and limitations: 

Overseas Branch Office:

Advantages: 

• allows the parent company to operate under its own name in Cyprus;
• offers centralised management and control;
• generally easier and quicker to set up compared to incorporating a subsidiary. 

Limitations: 

• the parent company is fully liable for the debts and obligations of the branch;
• it may be subject to higher taxation compared to subsidiaries;
• not considered a separate legal entity from the parent company. 

Subsidiary Company: 

Advantages: 

• provides limited liability, separating the assets and liabilities of the subsidiary from those of the parent company;
• can benefit from Cyprus' favourable tax regime, including double taxation treaties;
• offers flexibility in terms of ownership structure and management. 

Limitations: 

• requires more time, paperwork, and expense to establish compared to a branch;
• may require compliance with local regulations and reporting requirements;
• requires a minimum share capital. 

Representative Office: 

Advantages: 

• allows market research, promotion, and liaison activities without engaging in commercial activities;
• no share capital requirement;
• offers a cost-effective way to establish a presence and test the market. 

Limitations:

• restricted in its activities to non-trading and non-profit generating activities;
• cannot enter into contracts or conduct business transactions;
• limited to representing the interests of the parent company. 

Limited Liability Company: 

Advantages: 

• offers limited liability protection to shareholders;
• can be owned by foreign entities or individuals;
• provides flexibility in management and ownership structure. 

Limitations: 

• requires compliance with local regulations and reporting requirements;
• subject to corporate tax on profits; may require a minimum number of shareholders and directors. 

Partnership: 

Advantages: 

• simple and flexible business structure;
• partners share profits and losses according to the partnership agreement;
• no minimum share capital requirement. 

Limitations: 

• partners are personally liable for the debts and obligations of the partnership;
• not suitable for businesses seeking limited liability protection;
• limited ability to raise capital compared to a company structure. 

1.2. What is the process for creating a legal entity or another form of presence in the country, including the laws to follow, legal entities to be considered, documents required, stages and terms for registration?  (not as a sub-question but please mention the Mandatory Capital Amounts and Their Principles) 

Creating a legal entity or establishing another form of presence in Cyprus involves several steps and legal requirements. Below is a general overview of the process: 

1. Choosing the Legal Entity Type: 

It is necessary to determine the most suitable legal structure for your business, such as a limited liability company, branch office, representative office, partnership, or other entity types. 

2. Name Reservation: 

Choose a unique name for the entity and verify its availability with the Cyprus Registrar of Companies. The name must comply with certain criteria outlined in Cyprus company law. 

3. Preparation of Documents:

One must prepare the necessary documents depending on the chosen legal entity type. This typically includes: 

• memorandum and Articles of Association for companies;
• copies of passports and proof of address for directors and shareholders;
• legalised and apostilled documents if shareholders or directors are foreign entities;
• any additional documents required by specific entity types or activities. 

4. Share Capital: 

One must determine the share capital requirement when establishing a company. Cyprus does not have a minimum capital requirement for private companies, but certain types of activities may have specific capital requirements. 

5. Register with the Registrar of Companies: 

Submit the required documents to the Cyprus Registrar of Companies. The registration process varies depending on the entity type but typically involves submitting the documents along with the applicable registration fees. 

6. Obtain Tax Identification Number (TIN): 

After registration, apply for a Tax Identification Number (TIN) for the entity with the Cyprus Tax Department. 

7. Open Bank Account: 

Open a bank account for the newly established entity. This usually requires presenting the company's incorporation documents, TIN, and identification documents of authorised signatories. 

8. Compliance and Reporting: 

Ensure compliance with ongoing reporting and regulatory requirements, including filing annual returns, financial statements, and tax returns as applicable to the entity type. The timeframes and specific requirements for registration may vary depending on the entity type and any specific circumstances of the business. 

1.3. What additional authorizations/approvals are required to create a legal entity or start operations, and how do they vary depending on the type of business (if any)? 

In addition to the registration process with the Cyprus Registrar of Companies, establishing a legal entity in Cyprus or starting operations may require additional authorizations or approvals depending on the type of business and its activities. Below are some common additional authorizations/approvals that may be required:

1. Business Licence: 

Certain types of businesses or activities may require specific licences or permits from relevant authorities in Cyprus. This could include licences for industries such as banking, insurance, pharmaceuticals, real estate, tourism, and others. 

2. Special Permits or Approvals: 

Depending on the nature of the business, special permits or approvals may be needed from regulatory bodies or government agencies. For example, businesses involved in import/export, food handling, environmental activities, or construction may require specific permits. 

3. Foreign Investment Approval: 

In some cases, foreign investment approval may be necessary for companies with non-Cypriot shareholders, particularly if the business involves certain strategic sectors or significant investment amounts. The approval process may involve the Cyprus Investment Promotion Agency (CIPA) or other relevant authorities. 

4. Professional Licences: 

Professionals such as lawyers, accountants, architects, doctors, and others may need to obtain professional licences or registrations from the relevant professional bodies in Cyprus before practising their professions. 

5. Health and Safety Compliance: 

Businesses may need to comply with health and safety regulations, which may involve obtaining approvals or certifications related to workplace safety standards, hygiene, and environmental protection. 

6. Employment Permits: 

If the business plans to hire foreign employees, it may need to obtain employment permits or visas for them from the Cyprus Department of Labour. 

7. Customs and Trade Regulations: 

Businesses engaged in international trade may need to comply with customs regulations and obtain relevant permits or approvals for importing/exporting goods.

1.4. What are the most common types of Legal Entities in your country and the differences between them in terms of taxation, liability, and management?

In Cyprus, below are the most common types of legal entities, which differ in terms of taxation, liability, and management structure, offering businesses flexibility in choosing the most suitable option based on their specific needs, objectives, and preferences. 

1. Limited Liability Company characteristics (LLC): 

• Taxation: Limited liability companies in Cyprus are subject to corporate income tax on their worldwide income at a flat rate of 12.5%. However, Cyprus offers various tax advantages for companies, including a favourable corporate tax rate, participation exemption, and double taxation treaties.
• Liability: Shareholders' liability is limited to the amount unpaid on their shares.
• Management: Managed by directors appointed by the shareholders. The company is governed by its Memorandum and Articles of Association. 

2. Branch Office characteristics: 

• Taxation: Branch offices of foreign companies in Cyprus are taxed on the profits derived from their Cyprus operations. They are subject to the same corporate tax rate as local companies.
• Liability: The branch does not have separate legal status from its parent company. Therefore, the parent company is fully liable for the debts and obligations of the branch.
• Management: Managed by the parent company, which retains control over the branch's operations. 

3. Partnership characteristics: 

• Taxation: Partnerships in Cyprus are not subject to separate taxation. Instead, profits are allocated to partners, who are taxed individually on their share of the partnership income.
• Liability: In a general partnership, partners have unlimited liability for the debts and obligations of the partnership. In a limited partnership, there are general partners with unlimited liability and limited partners with liability limited to their contributions.
• Management: Partnerships may be managed by all partners jointly or by designated managing partners. 

4. Public Limited Company (PLC) characteristics: 

• Taxation: Public limited companies are subject to the same corporate tax regime as private limited companies.
• Liability: Shareholders' liability is limited to the amount unpaid on their shares.
• Management: Managed by directors appointed by the shareholders. PLCs are subject to additional regulatory requirements compared to private limited companies. 

5. Representative Office characteristics: 

• Taxation: Representative offices are generally not subject to corporate income tax in Cyprus since they are not engaged in commercial activities. However, they may be subject to other taxes such as withholding tax on certain payments.
• Liability: Representative offices do not have separate legal status from their parent companies. Therefore, the parent company is fully liable for the activities and obligations of the representative office.
• Management: Typically engaged in non-commercial activities such as market research, promotion, and liaison, and do not engage in trading activities.

1.4.1. What are the shareholder structures of these types of legal entities? 

In Cyprus, companies with limited liability can have various shareholder structures, depending on the specific requirements and preferences of the owners. The below are some common shareholder structures for limited liability companies in Cyprus, but the specific structure adopted by a company depends on various factors such as the nature of the business, ownership preferences, investment considerations, and strategic goals. 

1. Single Shareholder (Private Limited Company): 

A single individual or entity owns 100% of the shares of the company. This structure is common for small businesses or where one person wants full control over the company's affairs. 

2. Multiple Shareholders (Private Limited Company): 

Multiple individuals or entities own shares in the company, with each shareholder holding a certain percentage of ownership. The ownership distribution can be equal among shareholders or based on the investment or contribution made by each shareholder. 

3. Holding Company/Subsidiary Structure: 

A holding company structure involves a parent company (the holding company) owning shares in one or more subsidiary companies. The holding company typically owns a majority stake in the subsidiary companies, allowing it to control their operations and strategic decisions. 

4. Joint Venture Structure: 

Two or more parties come together to form a joint venture company, with each party holding shares in proportion to their contribution or ownership interest in the joint venture. Joint ventures are common for collaborative projects or business ventures where parties pool resources and expertise. 

5. Nominee Shareholder Structure: 

In some cases, individuals or entities may hold shares in a company as nominees on behalf of the true beneficial owners. Nominee shareholders are registered as the legal owners of the shares but hold them for the benefit of the beneficial owners, who retain ultimate control and ownership rights. 

6. Venture Capital or Investor Structure: 

Companies seeking external investment from venture capitalists, angel investors, or other sources may have a shareholder structure that includes both the founding entrepreneurs and external investors. The ownership distribution may be based on the terms of the investment agreement. 

1.4.2. What is the Shareholders’ responsibility in these types of legal entities? 

Shareholders of limited liability companies in Cyprus have certain rights, responsibilities, and obligations, which are defined by Cyprus company law and the company's Memorandum and Articles of Association. 

1. Financial Contribution: 

Shareholders are responsible for contributing the agreed-upon amount of capital towards the company’s share capital. This contribution is typically made during the formation of the company and may be paid in full or in instalments as determined by the company’s Articles of Association. 

2. Exercise of Voting Rights: 

Shareholders have the right to attend general meetings of the company and to vote on matters affecting the company’s affairs. This includes decisions such as the appointment of directors, approval of financial statements, and changes to the company’s constitution. 

3. Compliance with Corporate Governance: 

Shareholders are responsible for ensuring that the company adheres to corporate governance standards and complies with applicable laws, regulations, and internal policies. This includes overseeing the conduct of the board of directors and management to ensure that they act in the best interests of the company and its shareholders. 

4. Fiduciary Duties: 

Shareholders owe fiduciary duties to the company and to other shareholders. This includes acting in good faith, exercising due care and diligence, and avoiding conflicts of interest. Shareholders should not use their position to gain an unfair advantage or to the detriment of the company or other shareholders. 

5. Financial Oversight: 

Shareholders have a role in overseeing the financial performance of the company and ensuring that appropriate financial controls are in place. They may review financial statements, audit reports, and other financial information to assess the company's financial health and performance. 

6. Appointment and Removal of Directors: 

Shareholders typically have the authority to appoint and remove directors through resolutions passed at general meetings. Shareholders may exercise this authority to ensure that the company's management reflects their interests and objectives. 

7. Decision-Making on Fundamental Changes: 

Shareholders have the right to approve fundamental changes to the company, such as amendments to the Memorandum and Articles of Association, changes to the company's share capital, mergers, and liquidation. 

1.4.3. What is the responsibility of the representatives in these types of legal entities? 

In Cyprus, limited liability companies may appoint representatives to act on their behalf in various capacities. The responsibilities of these representatives depend on their roles within the company and the scope of authority delegated to them. Below are the common types of representatives in Cyprus LLCs and their responsibilities: 

1. Directors: 

Directors are appointed by the shareholders to manage the day-today affairs of the company and make decisions on its behalf. Their responsibilities include: 

• formulating and implementing the company's strategic objectives and policies;
• ensuring compliance with legal and regulatory requirements;
• managing the company's operations, finances, and assets;
• representing the company in dealings with third parties, including signing contracts and agreements;
• acting in the best interests of the company and its shareholders. 

2. Company Secretary: 

A company secretary may be appointed to assist the directors with administrative and compliance duties. Their responsibilities typically include: 

• maintaining statutory records and registers;
• organising and attending board and shareholder meetings, preparing minutes, and ensuring compliance with procedural requirements;
• filing statutory returns and other regulatory filings with government authorities;
• advising the directors on corporate governance matters and legal compliance. 

3. Authorised Attorneys: 

Authorised attorneys are individuals designated by the company to sign documents and contracts on its behalf. Their responsibilities include: 

• signing contracts, agreements, and other legal documents in accordance with the company's policies and procedures;
• ensuring that they have the appropriate authority to sign on behalf of the company and that the documents are legally binding;
• exercising due diligence when signing documents to protect the company's interests and minimise legal risks. 

4. Legal Representatives: 

Legal representatives, such as lawyers or legal advisors, may be engaged by the company to provide legal advice and represent its interests in legal matters. Their responsibilities include: 

• providing legal advice on corporate governance, commercial transactions, regulatory compliance, and other legal issues;
• representing the company in negotiations, dispute resolution, and legal proceedings;
• drafting and reviewing contracts, agreements, and other legal documents to ensure compliance with applicable laws and regulations;
• the responsibilities of representatives in Cyprus LLCs are governed by company law, the company's Memorandum and Articles of Association, and any specific delegation of authority made by the shareholders or the board of directors. It's essential for representatives to act within the scope of their authority and in the best interests of the company, exercising due diligence and care in carrying out their duties.

1.4.4. Briefly, what are the characteristics of the other types of Legal Entities? 

1. Public Limited Company (PLC): 

• PLCs are suitable for larger businesses and can offer shares to the public.
• Minimum share capital requirements are higher compared to private limited companies.
• Shares can be freely transferred, and PLCs are subject to additional regulatory requirements. 

2. Partnership: 

• Partnerships are formed by two or more individuals or entities who agree to carry on a business together.
• Partners have unlimited liability for the debts and obligations of the partnership, except in the case of limited partnerships where some partners have limited liability.
• Profits and losses are shared among partners according to the partnership agreement. 

3. General Partnership: 

• All partners share equal responsibility and liability for the partnership's debts and obligations.
• Each partner has the authority to manage the business and make decisions on behalf of the partnership. 

4. Limited Partnership: 

• Consists of one or more general partners with unlimited liability and one or more limited partners with liability limited to their contributions.
• Limited partners typically do not participate in the management of the partnership and are only liable up to the amount they have invested. 

5. Branch Office: 

• Is an extension of a foreign company's operations in Cyprus.
• The branch does not have separate legal status from its parent company, and the parent company is fully liable for the debts and obligations of the branch.
• Branches are subject to Cyprus taxation on profits derived from Cyprus operations.

6. Representative Office: 

• Typically established for non-trading and non-profit-generating activities such as market research, promotion, and liaison.
• Representative offices do not have separate legal status from their parent companies and cannot engage in commercial activities or enter into contracts. 

1.5. What are the operating costs associated with the maintenance of a legal entity or presence in the country?

The operating costs associated with maintaining a legal entity or presence in Cyprus can vary depending on factors such as the type of entity, business activities, size of the company, and specific regulatory requirements. Here are some common operating costs to consider: 

1. Corporate Taxation: 

Cyprus has a corporate income tax rate at 12,5%, which is applied to the profits generated by the company. The tax rate is currently one of the lowest in the European Union. Additionally, Cyprus offers various tax incentives and exemptions for certain types of income, such as dividends, capital gains, and foreign-source income. 

2. Accounting and Audit Fees:

Companies in Cyprus are required to maintain proper accounting records and prepare annual financial statements in accordance with International Financial Reporting Standards (IFRS) or other applicable accounting standards. Hiring accounting and auditing services to ensure compliance with these requirements can incur costs. 

3. Legal and Regulatory Compliance: 

Companies must comply with various legal and regulatory requirements, including filing annual returns, maintaining statutory registers, and adhering to corporate governance standards. Legal and regulatory compliance may involve costs such as legal fees, regulatory filing fees, and corporate secretarial services. 

4. Registered Office and Nominee Services: 

Companies in Cyprus are required to have a registered office address where official correspondence and notices can be sent. Some companies may also opt for nominee services, where a professional service provider acts as a nominee director or shareholder on behalf of the company, which incurs additional costs. residents. The rates vary depending on the type of income. 

(2) General taxation issues 

2.1. What tax obligations are associated with doing business in the country? 

Doing business in Cyprus entails various tax obligations, including: 

1. Corporate Income Tax: The corporate income tax rate in Cyprus is 12.5%. This tax is levied on the worldwide income of Cyprus tax resident companies. 

2. Value Added Tax (VAT): VAT is applicable to the supply of goods and services in Cyprus, as well as the importation of goods. The standard VAT rate is 19%, with reduced rates of 5% and 9% for certain goods and services. 

3. Employment Taxes: Businesses must pay social insurance contributions for their employees, as well as make contributions to the national healthcare system. These contributions are deducted from employees' salaries. 

4. Withholding Taxes: Cyprus imposes withholding tax on certain types of income paid to non-residents, such as dividends, interest, and royalties. However, Cyprus has an extensive double tax treaty network that often reduces or eliminates withholding taxes on payments to residents of treaty countries. 

5. Capital Gains Tax: Capital gains tax is imposed on gains from the disposal of immovable property situated in Cyprus, as well as on gains from the disposal of shares in companies that own immovable property in Cyprus. The rate of capital gains tax varies depending on the nature of the asset and the holding period. 

6. Special Contribution for Defense: This is a tax imposed on dividends, interest, and rental income received by Cyprus tax residents. The rates vary depending on the type of income. 

2.2. What tax and customs incentives are available in a country? 

Cyprus offers various tax and customs incentives to promote economic development and attract investment. Some of these incentives include: 

1. Double Tax Treaties: Cyprus has an extensive network of double tax treaties with over 60 countries. These treaties aim to eliminate double taxation on income earned in one country by residents of another country. They often provide reduced withholding tax rates on dividends, interest, and royalties. 

2. EU Membership Benefits: As a member of the European Union, Cyprus benefits from EU directives and regulations that promote free movement of goods, services, capital, and people within the EU. This facilitates trade and investment activities. 

3. Tax Residency Rules: Cyprus offers an attractive tax residency regime, whereby individuals can become tax residents of Cyprus by spending a certain number of days in the country. As tax residents, individuals can benefit from Cyprus's favourable tax treatment, including the non-taxation of certain types of income, such as dividends and interest. 

4. Intellectual Property (IP) Regime: Cyprus has introduced a favourable IP regime, offering tax incentives for companies that hold IP rights. Qualifying IP income may benefit from an 80% exemption from corporate income tax, resulting in an effective tax rate as low as 2.5%. 

5. Shipping Industry Incentives: Cyprus provides various incentives to encourage investment in the shipping industry, including tonnage tax system, tax exemptions for ship management and ship financing companies, and VAT exemptions on the sale and leasing of ships. 

6. Investment Funds Regime: Cyprus offers a favourable tax regime for investment funds and fund managers, including tax exemptions on profits from the disposal of securities and tax credits for fund management expenses. 

7. Customs Duties Relief: Certain industries in Cyprus may benefit from customs duties relief or exemptions on the importation of raw materials, machinery, and equipment used for manufacturing or production purposes. 

2.3. What are the accounting and reporting requirements for different types of presence, and how often must they be submitted? 

In Cyprus, the accounting and reporting requirements vary depending on the type of business presence. Here's an overview: 

1. Companies Limited by Shares (Private and Public): 

• Annual Financial Statements: Companies must prepare annual financial statements in accordance with International Financial Reporting Standards (IFRS) or the Cyprus Generally Accepted Accounting Principles (GAAP). The financial statements typically include a balance sheet, income statement, cash flow statement, and notes to the financial statements.
• Annual Return: Companies are required to file an annual return with the Registrar of Companies, which includes information about the company's shareholders, directors, registered office address, and share capital.
• Annual General Meeting (AGM): Companies are generally required to hold an AGM within a certain period after the end of the financial year, during which the financial statements are presented to the shareholders for approval.
• Filing Deadline: The annual financial statements and annual return must be filed with the Registrar of Companies within 18 months from the end of the financial year.

2. Branches of Foreign Companies: 

• Similar to companies limited by shares, branches of foreign companies operating in Cyprus are required to prepare annual financial statements in accordance with IFRS or Cyprus GAAP.
• The branch must also submit an annual return to the Registrar of Companies, which includes information about the foreign company, its activities in Cyprus, and its authorised representatives in Cyprus.
• The filing deadline for the annual financial statements and annual return is the same as for companies limited by shares (i.e., within 18 months from the end of the financial year). 

3. Partnerships and Sole Proprietorships: 

• Partnership and sole proprietorship accounts must be maintained in accordance with appropriate accounting standards, either IFRS or Cyprus GAAP.
• Although there is no legal requirement to file annual financial statements with the Registrar of Companies for partnerships and sole proprietorships, they are still required for tax purposes and may need to be submitted to tax authorities. 

4. Other Entities (e.g., Limited Liability Partnerships): 

• Specific accounting and reporting requirements may apply to other types of entities, depending on their legal structure and activities. These requirements would typically be outlined in relevant legislation or regulations governing such entities.

2.4. What is the taxation of dividends for foreign investors? 

Under Cyprus's domestic tax law, dividends paid by a Cyprus company to non-resident shareholders are generally not subject to withholding tax. This means that foreign investors can receive dividends from Cyprus companies without any tax being deducted at the source. 

2.5. What strategies exist for minimising tax liability when conducting international business? 

When conducting international business from a Cyprus company, there are several strategies available to minimise tax liability. These strategies often involve leveraging Cyprus's favourable tax regime, including its extensive network of double tax treaties and beneficial tax laws.

(3) Regulatory and miscellaneous 

3.1. What are the general data protection and privacy requirements in the country, and how do they affect company operations? 

In Cyprus, data protection and privacy requirements are primarily governed by the General Data Protection Regulation (GDPR), which became enforceable across the European Union (EU) member states, including Cyprus, in May 2018. The GDPR sets out rules and principles for the processing of personal data, aiming to protect the fundamental rights and freedoms of individuals and ensure the free flow of personal data within the EU.

3.2. What labour law features should be considered when hiring local and foreign employees? 

When hiring both local and foreign employees in a Cyprus company, several labour law features should be considered to ensure compliance with local regulations and fair treatment of employees. Here are some key aspects to consider: 

1. Employment Contracts: Cyprus labour law requires that all employees, both local and foreign, have a written employment contract specifying the terms and conditions of employment. The contract should include details such as job duties, salary, working hours, holiday entitlement, termination procedures, and any other relevant employment terms. 

2. Minimum Employment Standards: Cyprus has established minimum standards for employment, including minimum wage rates, maximum working hours, rest breaks, annual leave entitlements, and maternity/paternity leave provisions. Employers must ensure compliance with these standards for both local and foreign employees. 

3. Work Permits and Visas: Employers hiring foreign nationals in Cyprus must ensure that they have the necessary work permits and visas to legally work in the country. Different types of work permits may be required depending on factors such as the duration of employment, the nature of the work, and the nationality of the employee. 

4. Equal Treatment and Non-Discrimination: Cyprus labour law prohibits discrimination in employment on the basis of factors such as race, gender, age, disability, religion, or sexual orientation. Employers must ensure equal treatment of all employees, regardless of their nationality or background. 

5.Health and Safety Regulations: Employers have a legal obligation to provide a safe and healthy working environment for their employees. This includes implementing health and safety policies, conducting risk assessments, providing training, and ensuring compliance with relevant health and safety regulations. 

6. Social Security Contributions: Both employers and employees in Cyprus are required to make social security contributions, which 6..fund various social insurance benefits such as pensions, healthcare, unemployment benefits, and maternity/paternity benefits. Employers must ensure that they deduct and remit the correct amount of social security contributions for both local and foreign employees. 

7. Termination of Employment: Cyprus labour law governs the procedures and requirements for terminating employment contracts, including notice periods, severance pay, and the grounds for dismissal. Employers must adhere to these legal requirements when terminating the employment of both local and foreign employees. 

8. Trade Union Rights: Employees in Cyprus have the right to join trade unions and engage in collective bargaining. Employers must respect employees' rights to organise and collectively negotiate terms and conditions of employment.

3.3. What are the requirements for currency regulation and currency control? 

In Cyprus, currency regulation and currency control are primarily governed by the Central Bank of Cyprus (CBC) and various regulations issued by the European Central Bank (ECB) and the European Union (EU). Cyprus, as a member of the Eurozone, adheres to the regulations and policies set forth by the ECB regarding the euro currency.

3.4. What corporate law features should be considered when planning mergers, acquisitions, and company restructuring in the country? 

Mergers, acquisitions, and company restructuring in Cyprus are primarily governed by the Companies Law, Cap. 113, which sets out the procedures and requirements for such transactions. Additionally, other relevant legislation, such as the Competition Law, may apply, especially in the case of mergers and acquisitions that couldpotentially raise competition concerns.

3.5. What are the most efficient mechanics for dispute resolution?

In Cyprus, several mechanisms are available for resolving disputes efficiently, depending on the nature of the dispute, the parties involved, and their preferences. Here are some of the most common and efficient mechanisms for dispute resolution in Cyprus: 

1. Negotiation and Mediation: These methods are often preferred for their flexibility, confidentiality, and potential for preserving business relationships. 

2. Arbitration: Arbitration offers a more formal and structured process than negotiation and mediation and is often used for commercial disputes. 

3. Court Litigation: While court litigation may be more adversarial and time-consuming than alternative methods, it provides a formal legal process and access to judicial remedies. 

4. Expert Determination: Expert determination involves appointing an independent expert to resolve a specific issue or dispute based on their expertise in a particular subject matter. This method is often used for technical or specialised disputes where the parties agree to be bound by the expert's decision. 

5. Dispute Resolution Clauses: Including dispute resolution clauses in contracts can help parties anticipate and manage disputes more effectively by specifying the method and procedures for resolving disputes. Common clauses may require negotiation, mediation, arbitration, or a combination of these methods before resorting to court litigation. 

6. ADR Centers and Institutions: Cyprus has several alternative dispute resolution (ADR) centres and institutions that offer mediation, arbitration, and other ADR services. These centres provide facilities, administrative support, and qualified mediators or arbitrators to assist parties in resolving their disputes efficiently. 

7. Online Dispute Resolution (ODR): With advancements in technology, online platforms and tools are increasingly used for resolving disputes, especially in cross-border transactions. ODR platforms provide a convenient and cost-effective means for parties to negotiate, mediate, or arbitrate disputes online. 

 

Author:

Nasos A. Kyriakides.