Cyprus: Corporate/Commercial Law

From the 15th March 2024, a new set of legal provisions started to apply whenever a Cyprus Company is converted from a Cyprus company to one of the companies of the Member States of the European Union or when a company from a Member State of the European Union is converted to a Cyprus company. This is due to the amendment of the Companies Law (No.3) of 2024 (Law 26(I)/2024) (the “Amendment Law”) that transposed into domestic law the provisions of Directive (EU) 2019/2121 (the “Mobility Directive”) that amended Directive (EU) 2017/1132 as regards cross-border conversions.

Companies in Cyprus, like elsewhere, may encounter financial or structural difficulties that make it impossible to continue operating. In such cases, the law provides mechanisms to bring the life of a company to an end in an orderly and fair manner.

Imagine operating a company, only to find without any warning that the company’s bank accounts have been blocked. The immediate consequence is one of acute disruption and uncertainty. You learn that a winding-up petition has been filed against the company, triggering restrictions that effectively prevent it from carrying out ordinary financial transactions. At that point, a pressing question arises: how is the business expected to continue operating under such constraints?