Cyprus: Cyprus Business Headlines

Last Updated: 5 November 2007
Most Read Contributor in Cyprus, December 2017

One Stop Shop" For Foreign Investors

A new government service has been established by the Ministry of Commerce, Industry and Tourism to encourage investment and new business ventures by facilitating the completion of registration formalities for new companies.

The new service operates as a "One Stop Shop", hosting services from all the government departments involved in setting up a new business in Cyprus.

Officials from the Department of the Registrar of Companies will be available, with the authority to approve a company name, check all corporate documents and forward them for the immediate registration of the new company within two to five working days.

Representatives of the VAT Department will register the new company for VAT purposes, and provide a registration number and any other necessary information on VAT.

The Labour Department will also have staff on hand to provide assistance with employment of both local and foreign staff, and to effect registration in the Social Insurance Scheme.

The Immigration Department will issue residence permits and work permits for directors, managers and staff from third countries, as well as any permits required by EU citizens.

The Inland Revenue Department will provide Tax Identification Numbers and advice on Cyprus tax.

In addition to the above, officials from the Ministry of Commerce, Industry and Tourism will be on hand to provide general advice and assistance to anyone wishing to invest in Cyprus. They will provide information and advice on grants and incentives, and help to co-coordinate the granting of any necessary permits and licenses.

Article by Maria kyriacou

Continued progress towards eurozone

The Cyprus House of Representatives has approved Cyprus's entry into the Eurozone on 1 January 2008 and has passed the necessary legislation to amend the law on the Central Bank to satisfy EU requirements and to establish the legal framework for the transition to the euro.

The enactment of the Adoption of the Euro Law of 2007 marks a significant step in progress towards the euro. It provides the legislative framework for conversion of Cyprus pounds into euros, including the detailed conversion process, dual pricing, dual circulation and measures to combat profiteering.

The exchange rate (to six significant figures) at which the Cyprus pound will be converted into euro will be set in July 2007. There has been speculation that the rate adopted will represent an effective devaluation of the Cyprus pound, but the government has consistently maintained that there will be no change from the current rate.

From 1 August, in preparation for the changeover date of 1 January 2008, prices will be displayed in Cyprus pounds and euro. Dual display of prices will be mandatory unless an exemption is granted on the grounds that it is technically unfeasible or disproportionately expensive. Exceptions will be made for sums lower that 1 cent; digital price displays; bus tickets and tickets issued electronically including airline and ferry tickets and parking meters. Dual display of prices will continue until six months after the changeover.

The Euro Law provides that all balances with banks and co-op credit societies will be converted into euros without charge. Public and private debt will be re-denominated in euro.

For one month after the changeover date (the parallel circulation period) Cyprus pound notes and coinage will continue to be legal tender but change will be given in euro. Cheques issued in Cyprus pounds issued after 1 January 2008 will be invalid.

The Euro Law sets out the arrangements for exchange of banknotes, coinage, revenue and postage stamps after the changeover date. It also contains detailed provisions amending other laws to reflect the introduction of the euro (for example, to convert fines and penalties and companies’ share capital – see below). Public authorities such as the Land Registry will be obliged to publish tariffs of charges for their services within three months of the conversion rate being set.

A "euro Observatory" will be set up in each district to protect consumers against profiteering in connection with the introduction of the euro. Any person infringing the law faces an administrative fine of up to CYP 100,000 or €170,000.

Cyprus’s application has been unanimously approved by the Eurogroup Finance Ministers and the approval of the relevant Heads of Government is widely expected to be a formality. Barring unforeseen developments Cyprus will therefore adopt the euro as its currency on 1 January 2008.

Cyprus is already familiar with the new currency due to its tourist industry and its ties with Greece, which adopted the euro in 2002. Eurozone entry, and particularly the establishment of a Single European Payment Area in which international transactions in euro can be made as simply as domestic transactions, will bring considerable benefits for business.

Article by Kyriacos Georgiades

Conversion of share capital following adoption of the euro

The Euro Law does not include any provision for the share capital of existing companies, which is generally expressed in Cyprus pounds, to be automatically converted to euro. Instead, all companies whose share capital is denominated in Cyprus pounds will be required to pass a resolution in a general meeting to change their share capital and amend their memorandum and articles of association. Notice of

the change must be filed with the Registrar of Companies, who will not charge any fee for registration.

Although this ought to be no more than a formality, care will have to be taken to comply with the detailed provisions of the Cyprus Companies Law which, for example, requires a special resolution for such purposes.

Until companies have filed the necessary documents to amend their share capital the Registrar of Companies will not accept any other documents from them for registration. Furthermore, if the conversion has not taken place within one year from the adoption date, the Registrar will accept the resolution only with a court order authorising late registration of the conversion of capital.

We shall be writing to clients of our companies management service with detailed recommendations for action but if you are likely to be affected and require separate advice, please contact us.

Article by Kyriacos Georgiades

The markets in financial instruments directive ("mifid")

Cyprus has introduced draft legislation to implement Directive 2004/39/EC of the European Parliament and of the Council on Markets in Financial Instruments and Directive 2000/12/EC of the European Parliament. Together, these establish a comprehensive regulatory framework for the execution of transactions on behalf of investors by stock markets, alternative trading systems and investment firms, with the objective of protecting investors, developing a single market in investment services across the EU, and promoting fair and transparent integrated financial markets.

As part of the process, a "single passport" for investment firms, banks and stock markets has been created which enables such institutions to offer their services on a cross-border basis throughout Europe on the basis of home-country authorisations, granted on the basis of uniform prerequisites in all Member States.

The draft law, which also incorporates other relevant EC Directives, will replace the existing Investment Firms Law of 2002 (Law 148(I)/2002). It is expected to be adopted by 1 November 2007.

Article by Elias Neocleous

Implementation of the takeover bids directive

Cyprus has enacted legislation transposing the European Takeover Bids Directive (Directive 2004/25/EC) into domestic law.

This newsletter is provided to clients and friends of Andreas Neocleous & Co as a periodic update on business developments in Cyprus. It is not intended to give a definitive statement of the law and readers should take appropriate professional advice before taking any action.

The new Law on Public Takeovers applies to public takeover bids for companies whose registered office is in the Republic of Cyprus and which are admitted to trading on a locally regulated market. Some of its provisions will also apply to companies whose registered office is outside Cyprus, provided certain conditions are met.

A key feature of the new law is the provision of a set of general principles governing public takeover bids, such as equal treatment of shareholders and shareholder protection. In addition, the law sets out the procedures to be followed before and after the announcement of the public takeover bid, the mechanics of a public takeover bid (such as the way in which information will be disseminated), restrictions on the offeror company after the announcement of the bid and the circumstances under which the initial public takeover bid can be revoked. The law also includes new "squeeze out" and "sell out" provisions.

Article by Elias Neocleous

Social insurance contributions for third country (non-eu) nationals employed by international business companies

Liability for payment of social insurance contributions in Cyprus is governed by the Social Insurance Laws, which require everyone who is in employment in Cyprus (including the self-employed) to pay a percentage of their gross income to the Department of Social Insurance.

The Law sets out certain exempt categories of employment. These include persons who are not habitually resident in Cyprus and whose employer is not habitually resident in Cyprus and has no place of business there. Liability depends on whether or not the relevant employee and the relevant employer are habitually resident in Cyprus. International companies that have no activities in Cyprus are not habitually resident, but if they have employees who are habitually resident in Cyprus there may be a liability to Social Insurance.

Since the beginning of 2007 the Civil Registry and Migration Department of the Ministry of Interior, which is responsible for the issue of residence permits, has required third country nationals to produce evidence of payment of Social Insurance Fund contributions in order to renew their residence permit. It had not previously required any such proof of payment.

Following representations from the international business community, the government is reviewing its

policy and has given assurances that, at least until the review is complete, residence permits will continue to be renewed without evidence of payment of social insurance contributions

Article by Nicholas Ktenas

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”

Related Video
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