Latest updates

Tax benefits for foreign nationals
A G Paphitis & Co
  • Private Client & Offshore Services
  • Cyprus
  • 18 July 2019

Cyprus offers a number of tax incentives to high-net-worth individuals. For example, foreign nationals who earn €100,000 per annum from employment in Cyprus are eligible for a 50% tax exemption on their income irrespective of the status of their tax residency or domicile. Further, Cyprus is party to more than 65 tax treaties, which allows it to charge zero or minimal withholding tax rates on incomes such as pensions, royalties, dividends and interest received from abroad.

Who has locus standi to bring derivative actions in Cyprus?
Elias Neocleous & Co LLC
  • Litigation
  • Cyprus
  • 16 July 2019

In order for a derivative action to be raised, there must be evidence of fraud and of wrongdoers controlling a company to the extent that the company cannot be made a plaintiff in a lawsuit. Recent case law has confirmed that when shares in a company are held on trust by a nominee shareholder, only they are entitled to raise an action on the company's behalf. In practice, this means that a company's beneficial owner has no locus standi to claim their rights.

Admissibility of digital evidence in court
Elias Neocleous & Co LLC
  • Litigation
  • Cyprus
  • 02 July 2019

The rapid development of technology and the use of digital devices have resulted in a significant transition from the creation of physical to digital data. Consequently, the role of digital forensics in fighting crime is becoming ever more important and it is critical for law firms and courts to develop a well-thought-out strategy for such investigations. This article aims to demystify this subject and define high-level criteria that can be used to identify the needs and admissibility of digital evidence in court.

Response to EU Anti-tax Avoidance Directive
Elias Neocleous & Co LLC
  • Corporate Tax
  • Cyprus
  • 14 June 2019

The House of Representatives recently approved legislation implementing the EU Anti-tax Avoidance Directive in Cyprus with the aim of improving the resilience of the internal market against cross-border tax avoidance practices. The new legislation has once again demonstrated the government's commitment to supporting international efforts to tackle tax avoidance practices.

New policy on registering vessels in Cyprus Register of Ships
Elias Neocleous & Co LLC
  • Shipping & Transport
  • Cyprus
  • 12 June 2019

The Deputy Ministry of Shipping recently updated its policy on the eligibility of ships to be registered under the Cyprus flag. The policy stipulates additional requirements beyond those set out in the Merchant Shipping Registration of Ships, Sales and Mortgages Law and should therefore be read in conjunction with the relevant legal provisions.

Court clarifies application of Article VI of New York Convention
George Z Georgiou & Associates LLC
  • Arbitration & ADR
  • Cyprus
  • 30 May 2019

In a recent Limassol District Court case, the applicants applied for the recognition and enforcement of an arbitral award issued by the Arbitration Institute of the Stockholm Chamber of Commerce. The case is one of the first examples of the judicial interpretation and application of Article VI of the New York Convention by the Cypriot courts and serves as a useful guide to the proper procedure to be followed by parties when invoking said article.

Court applies international collision regulations and considers subrogation
Elias Neocleous & Co LLC
  • Shipping & Transport
  • Cyprus
  • 22 May 2019

The admiralty jurisdiction of the Supreme Court recently ruled in a case concerning a marine accident which occurred when the bow of a sailing boat rammed the starboard side of a speedboat. It was highly disputed whether the sailing boat had been simultaneously using open sails and its engine. In reaching its conclusion, the court considered the evidence and the Rules of the Convention on the International Regulations for Preventing Collisions at Sea.

Importance of certainty in agreements: can there be room for an agreement to agree?
Solsidus Law
  • Company & Commercial
  • Cyprus
  • 20 May 2019

The Contracts Law provides the legal framework for establishing legally valid and enforceable agreements in Cyprus. However, in real-life commercial situations, parties may not always achieve the certainty required to ensure that an agreement or contract term is valid and enforceable. The pressure associated with reaching an agreement often causes parties to defer important contract terms in order to close a deal at the expense of certainty and, ultimately, enforceability.

Supreme Court examines appeal against decision by Land Registry director
  • Real Estate
  • Cyprus
  • 17 May 2019

The Supreme Court recently issued its decision on the appeal of a district court interim decision concerning an application to present oral evidence as part of an application against a decision by the director of the Land Registry. The applicants had filed their application against the director's decision to grant a right of way to the respondent to the detriment of their immovable property.

Cross-border recognition of insolvency proceedings
AG Erotocritou LLC
  • Insolvency & Restructuring
  • Cyprus
  • 10 May 2019

As a result of the numerous cross-border structures involving Cyprus, the need to recognise foreign insolvency proceedings in Cyprus is becoming more common. While the framework for recognising cross-border insolvencies originating outside the European Union remains largely untested in Cyprus, case law shows the Cyprus courts' willingness to follow the principles of common law in line with current commercial realities.

New form introduced for safety management and port facility security requirements
Elias Neocleous & Co LLC
  • Shipping & Transport
  • Cyprus
  • 01 May 2019

The Deputy Ministry of Shipping recently announced its decision to replace the International Safety Management Code Form and the International Ship and Port Facility Security Code Form with a new consolidated form in an effort to reduce paperwork and avoid the duplication of information. All interested entities are requested to use the new form to declare the particulars of companies or ships under the code and to comply with relevant circulars.

Can a driver be responsible for the death of a passenger with heart problems?
Elias Neocleous & Co LLC
  • Litigation
  • Cyprus
  • 30 April 2019

The Supreme Court recently examined the issue of causality arising from a road traffic accident. The first-instance court had found the defendant guilty of causing death by want of precaution or carelessness and of driving a motor vehicle under the influence of fatigue. The Supreme Court rejected the subsequent appeal and confirmed that, despite having taken a simplistic approach, the first-instance court had reached the correct conclusion by applying common sense and experience.

General Healthcare System contributions
  • Healthcare & Life Sciences
  • Cyprus
  • 10 April 2019

As of 1 March 2019, employees, pensioners, state officials and income earners in Cyprus must contribute 1.7% of their income to the General Health System, while self-employed individuals must contribute 2.55% of their income. Private employers must also make General Health System contributions of 1.85% on emoluments made to employees, while the state must make an additional contribution of 1.65% of the incomes of employees, self-employed individuals, pensioners and government officials.

District court rejects public policy argument against recognition of arbitral award
George Z Georgiou & Associates LLC
  • Arbitration & ADR
  • Cyprus
  • 04 April 2019

A recent Limassol District Court decision serves as a useful reminder that the courts will rarely resort to public policy grounds for refusing the recognition of arbitral awards unless presented with cogent evidence. In addition, the courts are prepared to demonstrate the necessary flexibility dictated by modern commercial practices in examining the imperative requirements of Article IV of the New York Convention in a manner which will not hamper the convention's underlying objectives.

Amendment of Judicial Practice Code
Elias Neocleous & Co LLC
  • Litigation
  • Cyprus
  • 19 March 2019

The Judicial Practice Code was recently amended to provide that no judge, whether sitting alone or as a member of a panel of judges of an adjudicating court, can hear a case in which a party is represented by a lawyer who is a family member of the judge or works in the same firm or office as a family member of the judge. The recent media focus in Cyprus on the alleged impartiality of certain judges was the impetus behind the changes.

New simplified strike-off procedure comes into force
Solsidus Law
  • Company & Commercial
  • Cyprus
  • 18 March 2019

The provisions on the striking off of Cypriot companies set out in the Companies Law were recently amended to introduce a simplified process to reinstate a company which is struck off as a result of failure to file mandatory documents or to pay the annual levy to the registrar. The simplified process aims to enable companies that are struck off due to irregularity to be reinstated within two years, without having to resort to the courts

Examinership and limits to its application
AG Erotocritou LLC
  • Insolvency & Restructuring
  • Cyprus
  • 08 March 2019

The examinership framework – which was introduced to the Companies Law in 2015 – offers an effective mechanism for restructuring financially distressed companies. However, judging from relevant case law, it appears that an application for examinership must be pursued promptly when the financial distress arises and not when the need for a moratorium becomes apparent.

Estate and gift taxes in Cyprus – planning is needed
A G Paphitis & Co
  • Private Client & Offshore Services
  • Cyprus
  • 07 March 2019

When property interests are given away during life or at death, taxes are imposed on their transfer. Such taxes are known as estate and gift taxes. The simplicity of Cyprus's tax system, especially with regard to estate and gift taxes, is one of the major attractions for the many high-net-worth individuals and companies that choose Cyprus as their place of business or residence.

Supreme Court declares legislation extending paternity leave and benefits to unmarried fathers unconstitutional
George Z Georgiou & Associates LLC
  • Employment & Benefits
  • Cyprus
  • 06 March 2019

In late 2018 the House of Representatives introduced amendments which granted paternity leave and benefits to unmarried working fathers. However, the government referred the amending laws to the Supreme Court, claiming that they would add unbudgeted costs to its budget and therefore violate the Constitution. The Supreme Court recently accepted the government's position and declared the amendments unconstitutional.

International Safety Management Code – instructions for recognised organisations
Elias Neocleous & Co LLC
  • Shipping & Transport
  • Cyprus
  • 06 March 2019

The Cyprus Flag Administration recently imposed additional requirements on the development, implementation and certification of safety management systems over and above those which have been set out in the International Safety Management Code since 1998. The consolidated edition of the additional requirements replaces a previous version published in 2006 and recognised organisations are required to implement its terms and conditions immediately.