Cyprus: Cyprus Chapter Of Digest Of Commercial Laws Of The World

Last Updated: 21 March 2016
Article by Achilleas Malliotis

Most Read Contributor in Cyprus, December 2017


§ 11:1 Description of system of law

The modern law of the Republic of Cyprus has its origins in a wide variety of different legal systems reflecting the island's turbulent historical past prior to its gaining independence in 1960.

When the Franks conquered Cyprus in 1192, they brought with them a feudal system of law which was not codified but based on custom. The Franks discovered that a system of law already existed on the island and this was based on Greco-Roman customary law which had been developed by the Byzantine Emperor Justinian. The Franks adopted the existing law into their own feudal laws and developed a system of laws called Assizes.

The Ottoman Turks, who conquered the island in the late 16th century, brought with them the Ottoman Laws and, in particular, the Ottoman Penal Code, Civil Code and Land Code which covered most of the land and penal laws. Family matters were dealt with by Islamic law with respect to the Muslim population of the island while the ecclesiastical courts of the Greek Orthodox Church had supreme authority over the Christian Greek population of the island.

The British, who effectively controlled Cyprus from the late 19th century, introduced English law to the island and, in particular, common law rules and principles and rules of equity, as well as a number of statutes which were in force in England at the time.

When Cyprus became independent in 1960, the Constitution of the new Republic provided that the laws previously applicable should remain in force until repealed or amended by new laws of the Republic. Since independence, myriad laws have been enacted, but the common law still plays an important part in the administration of justice on the island, in particular in relation to commercial matters.

Under Article 1 of the Constitution of Cyprus, the new state is an independent and sovereign republic, with a presidential system of government. Although not explicitly stated, the Constitution adheres to a relatively rigorous separation of powers with respect to the authority of the executive, legislative, and judicial branches of government.

§ 11:2 Constitutional law

The Constitution of the Republic of Cyprus is the product of the London and Zurich Agreements. In order to grant independence to Cyprus from British colonial rule, on 11 February 1959, representatives from Greece and Turkey met in Zurich and reached an agreement for the granting of independence and self-determination to the people of Cyprus. On 19 February 1959, the Prime Ministers of the Hellenic Republic, the Turkish Republic, the United Kingdom of Great Britain and Northern Ireland and the leaders of the Greek-Cypriot and Turkish-Cypriot communities initialed the documents comprising the Zurich agreement.

On the basis of the above Agreements, a constitutional commission was appointed to draft the Constitution of Cyprus, composed of representatives of the two communities and of the Greek and Turkish governments. The outcome was the declaration of an independent Cyprus Republic on 16 August 1960 and the creation of a constitution which embodied the various provisions of the Zurich Agreement, certain aspects of the 1950 Greek Constitution and most of the provisions of the European Convention on Human Rights with respect to fundamental rights and civil liberties.

The Constitution of Cyprus cannot be said to be a true reflection of the sovereign will of the people of Cyprus. It is rather a "granted" constitution and the product of negotiation and compromise between the previous colonial ruler and the governments of the two "motherlands" of the two resident ethnic communities.

The Constitution of Cyprus is also a "rigid" constitution because a number of basic articles are considered to be of fundamental importance and cannot be deleted or amended under any circumstances by the unicameral legislature. Amendments to the remaining articles require a two-thirds majority from representatives of both communities in the House of Representatives.

The Constitution does not fully respect the democratic principle of majority rule since it effectively gives the minority Turkish-Cypriot community and the majority Greek-Cypriot community equal rights, despite the disparity in their numbers. The Turkish-Cypriot com- munity is overrepresented in all the organs of central government with respect to its demographic weight. In a number of matters, such as defense and the budget, it has an effective veto which may be exercised by the Vice-President of the Republic, who must be a member of the Turkish-Cypriot community.

Following the invasion of Cyprus by the armed forces of Turkey in 1974 and the occupation of the northern part of the island by the Turks, which continues to the present day, the Constitution of the Republic of Cyprus is only enforced "de facto" in the southern free part of the Republic. The partition of the island led to the forced separation of the two communities into two ethnically cleansed regions, a "Turkish" north and a "Greek" south. The partition of the island has meant that many provisions of the Constitution which require the participation of members of the Turkish Cypriot community cannot be enforced in the free territory of the Republic.

The accession of the Republic of Cyprus to the European Union (EU) on 1 May 2004 and the ongoing accession negotiations between Turkey and the European Union may assist in the discovery of a lasting and peaceful settlement of the political problem on the island and in the eventual re-unification of Cyprus. A settlement will almost certainly necessitate the adoption of a new Constitution to replace the 1960 constitution.

§ 11:3 Statutory law

Under the Constitution, the legislative power of the Republic is exercised by the House of Representatives. All laws must be passed in the House of Representatives by a simple majority vote of all the members present. Laws passed by the legislature come into force on the date they are published in the Official Gazette of the Republic, unless other provision is made in the law itself.

Not all statutes are of equal force to each other. Statutes that are passed by the legislature in order to ratify an international treaty, convention or agreement concluded under a decision of the Council of Ministers (the organ vested by the Constitution with the exercise of executive power) have superior force over any other domestic law. However, the supreme law is the Constitution and all statutes and laws passed by the House of Representatives must be consistent with its provisions.


§ 11:4 Definition of trader

The term "trader" can generally be understood to indicate a person or entity that carries on some type of commercial business or enterprise. The nature of the business typically involves the sale of goods, the provision of services, or both. The term "trader" is not, however, commonly used or defined under Cyprus commercial law. By way of example, the Sale of Goods Laws 1994–1999 use the terms "buyer" and "seller" respectively to refer to a person who purchases or who agrees to purchase goods and a person who sells or who agrees to sell goods.

§ 11:5 Registration of traders

The type of business a trader carries out in the territory of the Republic of Cyprus determines the nature of the legal and regulatory framework under which the business will be conducted. Certain areas of business, such as banking and telecommunications, are extensively regulated. For example, any trader that wishes to conduct banking activities in Cyprus must first obtain a license from the Central Bank of Cyprus and meet certain requirements set out in the Banking Activities Law of 1997 as amended. Similarly, a trader who wishes to conduct activities in the telecommunications market should first consult the Office of the Commissioner of Electronic Communications and Postal Regulator to ascertain whether a license is required from the Regulator before commencing his business.

There are a number of registration requirements for different forms of business organization. The Registrar of Companies and Official Receiver is the government authority entrusted with the registration of all business entities (either foreign or domestic) that carry on business in the territory of Cyprus. For example, partnerships and corporations must register by _ling certain documents with the Registrar, which are accessible to the public, pertaining to, among other things, the entity's name, place of business, ownership and management. This information needs to be updated on a timely basis whenever changes occur. Sole traders or sole proprietors must have their business name approved and registered by the Registrar.

Traders may also be required to register with the local authority or municipality in which their place of business is situated. For example, all traders must be registered with and obtain a professional license from their respective municipality which is renewable annually. This is in effect a form of direct taxation and an important source of revenue for the local authorities.

Traders also must be registered, for tax purposes, with the Inland Revenue Department and the Value-Added Tax (VAT) Department of the Ministry of Finance. Specifically traders must pay on an annual basis corporation tax levied on their annual profits to the Inland Revenue Department. VAT, being a form of retail or sales tax, is charged by all traders with annual turnover in excess of ¬15,600 and included in the prices of the taxable goods and services provided by them. Traders must collect the VAT on the products or services they sell and then remit the money collected to the VAT Department. Furthermore, traders must pay social insurance for themselves and for their employees through payroll deductions to the Department of Social Insurance of the Ministry of Labor and Social Insurance.

§ 11:6 Other requirements of traders

There are a number of statutes and regulations that have been put in place for the purpose of consumer protection. For example, the Sale of Goods Laws of 1994–1999 implies a number of conditions in contracts for sale of goods, including conditions that the goods in question should be of an acceptable quality, should be fit for the purpose for which they are being purchased, should correspond to their sale description and that the buyer shall enjoy the goods free of any encumbrances with respect to title. Other important consumer protection laws include laws that deal with issues such as onerous terms in consumer contracts, timeshare leasing contracts, distance selling contracts and consumer credit contracts.

There are a number of laws and regulations of an industry specific nature designed to protect consumers from loss or unfair treatment (e.g. concerning the travel industry, the insurance industry, et cetera). There are also myriad other laws and regulations which impose certain minimum standards or requirements, in particular relating to foodstuffs and pharmaceutical products, as well as product labeling requirements. These laws and regulations are all in line with European norms and it is advisable to carefully research them before undertaking the sale or distribution of products in Cyprus.


§ 11:7 In general

Foreign trade and access to international markets are of the utmost importance to Cyprus due to the small size of its domestic market and the open nature of its economy. As a result, foreign trade has contributed significantly to the economic growth of the island. In 2014, the value of Cyprus's foreign trade was approximately EUR 6,588 million.

Cyprus's main imports are raw materials, consumer goods, transport equipment, capital goods, fuels and lubricants. More than 70% of these imports originate from the EU. Other significant trading partners include the Russian Federation, the United States, China, Japan, Taiwan, South Korea, Israel, and the neighboring Arab countries.

Cyprus's principal exports are manufactured goods and (processed or raw) agricultural products. Exports of manufactured goods include pharmaceuticals, clothing, cement, tobacco products, paper products, plastics, and furniture. Exports of agricultural products include cheese, wines, fruit and vegetable juices, citrus fruit and potatoes. The EU is the most important market for Cyprus's exports, accounting for 42% of total exports in 2014. Other important import markets are the Arab countries, countries of Eastern Europe, the Russian Federation, Israel, and the United States.

§ 11:8 Regulations and restrictions

The main body of legislation that currently deals with aspects of foreign trade is the Customs Code Law of 2004. Under the Law, the importation and exportation of certain goods is prohibited or restricted.

Restrictions usually refer to the need for securing permits or licenses or inspections from relevant government authorities. The aim of these restrictions and prohibitions is to safeguard social ethics, public order and security, public health, the health of animals and plant life and the island's cultural heritage. The following is a non-exhaustive list of items or goods whose importation is prohibited:

  1. Goods not bearing the mark "CE," where this is required;
  2. Narcotic drugs and other controlled substances;
  3. Obscene matters and objects (e.g. contained in DVDs, CDs, cassettes, films, publications, etc.);
  4. Flick-knives and double-edged knives;
  5. Counterfeit or pirated goods which infringe copyright and intellectual property rights;
  6. Nuclear, chemical, toxic and biological weapons and related substances;
  7. Counterfeit currency;
  8. Handguns and rifles, apart from those used for recreational purposes, explosive military devices and launchers, automatic guns, ammunition and other items described in Appendix 1 of the Firearms Law (Law 113(I) of 2004);
  9. Items used for illegal hunting and trapping of wild birds and prey; and
  10. Goods originating from countries under an embargo imposed by the United Nations Security Council or by the European Union.

The following is a non-exhaustive list of items or goods whose importation is restricted and requires a permit prior to their importation into Cyprus:

  1. Hunting rifles, air-rifles, sporting pistols, and archery accessories;
  2. Cinematograph films;
  3. Communications transceivers (other than walkie-talkies, mobile phones and pagers);
  4. Explosives and similar substances;
  5. Flowers and plants;
  6. Biocides;
  7. Gold bullion, gold and silver coins, uncut diamonds and precious metals;
  8. Handcuffs;
  9. Meat, fish, cheese and honey products; and/or
  10. Wild fauna and flora.

The following is a non-exhaustive list of items whose exportation is prohibited:

  1. All items whose importation is prohibited; and/or
  2. Items of military use mentioned in Defence (Exportation of Goods) Order of 1999.

The following items require an export license and therefore their exportation is restricted:

  1. Antiquities;
  2. Materials that may be used for the production of weapons of mass destruction; and
  3. Wild fauna or flora threatened with extinction.

§ 11:9 Taxation of foreign trade

As of 1 May 2004, the date on which the island joined the EU, Cyprus applies the EU's Common Customs Tariff on agricultural and industrial products originating from non-EU countries. Due to its accession to the EU, Cyprus has eliminated any remaining tariffs or quotas which may have applied to EU imports prior to accession.

The application of favorable preferential tariff measures on goods imported from third countries provided for in bilateral trade agreements between the EU and these countries depends on whether the prerequisites of the rules of origin that are provided for in these agreements or in the corresponding implementing provisions of the European Union's Customs Code are met. The non-preferential origin of goods is related to the application of the Common Customs Tariff and the application of EU trade policy measures.

To continue reading this article, please click here.

Previously published by Thomson Reuters

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:
  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.
  • Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.
    If you do not want us to provide your name and email address you may opt out by clicking here
    If you do not wish to receive any future announcements of products and services offered by Mondaq you may opt out by clicking here

    Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

    Use of

    You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


    Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

    The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


    Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

    • To allow you to personalize the Mondaq websites you are visiting.
    • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
    • To produce demographic feedback for our information providers who provide information free for your use.

    Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

    Information Collection and Use

    We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

    We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

    Mondaq News Alerts

    In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


    A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

    Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

    Log Files

    We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


    This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

    Surveys & Contests

    From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


    If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


    From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

    *** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


    This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

    Correcting/Updating Personal Information

    If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

    Notification of Changes

    If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

    How to contact Mondaq

    You can contact us with comments or queries at

    If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.

    By clicking Register you state you have read and agree to our Terms and Conditions