The Legal 500

The island now has the most modern and favourable trust regime in Europe

The long-awaited reform of the Cyprus International Trusts Law – a much-needed initiative – finally became reality last month with the passing of the International Trust (Amending) Law of 2011 by the House of Representatives.

In March 2012, the Parliament of Cyprus enacted the long awaited International Trust (Amending) law of 2012 effecting various structural changes to the International Trust law of 1992.

The amendments were necessary to adapt the Cyprus law on International Trusts, to the current needs of international investors and at the same time strengthening the role of Cyprus as a trust jurisdiction.

- Kinanis LLC

May 2012 - Corporate Division of Kinanis LLC

Cyprus
Panayiotis Neocleous, Costas Stamatiou and Alexia Solomou - Andreas Neocleous & Co LLC

Reform of the Cyprus International Trusts Law of 1992

The long-awaited reform of the Cyprus International Trusts Law, a much-needed initiative, has finally become reality with the passing by the House of Representatives of the International Trust (Amending) Law of 2011.

What Regulates M & A?

When it joined the EU in 2004, Cyprus came under the obligation to align its legislation with Directive 2004/25/EC of the European Parliament and of the Council of 21 April 2004 on takeover bids (“the Takeover Directive”). 

A trust can be defined as a legal mechanism which provides the flexibility to its creator (the settlor) to deal with his financial affairs during his lifetime and/or later on, in respect to his successors.

Cyprus is situated at the crossroads of three continents; Europe, Asia and Africa. This strategic geographic location, together with its excellent infrastructure, the strong probusiness attitude of the Cyprus people, the highly skilled human resources and the comprehensive double tax treaty network, have established Cyprus as a reputable International Financial Centre and an excellent place to establish tax efficient set ups.

Re-domiciliation, within the scope of the Cypriot Companies law Cap.113, as amended (“the Law”), can be defined as the procedure of transferring a Cypriot company’s registered office from the Republic of Cyprus (“the Republic”) to a new country or jurisdiction and vice versa. In both cases the company will continue existing in the new jurisdiction.

By Elias Neocleous

The Cyprus legal order reflects the cosmopolitan nature of the island and the diversity of influences on its history. Elements of Ottoman law and continental European law can still be found, particularly in its succession and constitutional law.

INTRODUCTION

COMMERCIAL ENVIRONMENT

FOREIGN INVESTMENT

BUSINESS ENTITIES

TAXATION

DOUBLE TAXATION TREATIES

Limitation periods in Cyprus are set out in the Limitation of Actions Law, Cap 15 ("Limitations Law"), which dates back to the time when Cyprus was a British colony. The principal time limits range from two to 15 years, depending on the nature of the claim. In relation to causes of action not expressly provided for by the Limitations Law or not expressly exempted, the limitation period is six years from the date when the cause of action accrued.

Since 1995 Transparency International has published an annual Corruption Perception Index, assessing and comparing the perceived level of corruption in the public sector. The 2011 index ranks countries on a scale from 10 (very clean) to 0 (highly corrupt). Cyprus succeeded in maintaining its position as one of the countries least plagued by corruption, achieving thirtieth place out of 183 countries worldwide.

Cyprus’s basic law on trusts, the Trustee Law of 1955, closely resembles the English Trustee Act 1925. Like many laws of the colonial era, it continues in force under the Constitutional provision that preindependence laws should remain in force in the Republic until repealed or amended by its own laws.

Exploration - EXPLOITATION of oil and gas in the exclusive economic zone (EEZ) of the Republic of Cyprus

Merger of Alpha Bank and EFG Eurobank

The Presidency of the Council of the European Union rotates among its member states every six months.

Directive 144-2007-01 issued by the Cyprus Securities and Exchange Commission (CYSEC) allows Cyprus Investment Firms to outsource portfolio management services carried out on behalf of retail clients to a service provider located outside the EU, as long as the service provider is authorised or registered in its home country to provide that service and subject to appropriate prudential supervision, and there is an appropriate cooperation agreement in place between the supervisory body concerned and CYSEC.

Directors exercise extensive powers in the management of their companies, influencing their company’s conduct, by virtue of their involvement in the decision making process.

Under Cyprus law, the directors are considered to stand in a fiduciary relationship, with their company, and are subject to specific duties, stemming from their relationship.

Cyprus, has adopted the Anglo-Saxon legal system which allows most of English cases to be cited in Cypriot Courts. Under certain conditions, the cases are treated as binding, but in most instances they are used as guidelines.

Since independence, Cyprus has maintained its legal system based on the Common Law, as followed in the English speaking world.

In a very recent decision, a Cyprus District Court rejected an application for the recognition and enforcement in the Republic of Cyprus of an arbitral award issued by the Austrian Arbitral Center due to the failure of the applicant to produce the original arbitral agreement or a certified true copy of same.

Global Overview

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Austria...

INTRODUCTION

COMMERCIAL ENVIRONMENT

FOREIGN INVESTMENT

BUSINESS ENTITIES

TAXATION

DOUBLE TAXATION TREATIES

The Partnership and Business Names (Amendment) Law, Law 54(I) of 2011 introduces new provisions to the Partnership and Business Names Law, Cap. 116 to facilitate the reorganisation and merger of partnerships and extends the favourable tax treatment of qualifying corporate reorganisations to partnerships.

In May 2011 the Department of Merchant Shipping notified its decision to authorise the use of nautical publications (eg, sailing directions, lists of lights, notices to mariners, tide tables and other publications necessary for their intended voyage)

The Central Bank of Cyprus has announced that all its licensing functions, including the licensing of banks, payment institutions, electronic money institutions and international collective investment schemes, have been consolidated under a single section, the Licensing Section.

The passage of vessels through Cyprus territorial waters has recently been regulated by the enactment of The Regulation of the Innocent Passage of Ships in the Territorial Sea Law of 2011 (Law 28(I)/2011), which entered into force on 18 March 2011.

Published by Global Legal Group

1 Recent Developments in European Product Liability – Ian Dodds-Smith & Alison Brown,
Arnold & Porter (UK) LLP __
2 The EU General Products Safety Regime – John Meltzer & Rod Freeman, Hogan Lovells International LLP...

The government of the Czech Republic has recently presented a new draft Civil Code, which forms the main component of the upcoming recodification of private law. The Chamber of Deputies is expected to complete its consideration of the draft before the end of the year. State institutions and the general and professional public will then have a period of one year to prepare for the changes before the new Civil Code takes effect. If all goes to plan, the new  Civil Code should become effective as of 1 January 2013.

Shareholders’ Contributions to Russian LLCs and JSCs now exempted: The role of Cyprus in enhancing the financial position of distressed Russian companies.

As its name indicates, Russian Federal Law No 409-FZ dated 28 December 2010 "On Making Amendments to Certain Legislative Acts of the Russian Federation in Respect of Regulation of Dividend Payouts (Profit Distribution)" is principally concerned with dividends paid by companies. However, one of its provisions creates attractive opportunities for financing Russian limited liability companies (OOOs) and joint-stock companies (AOs) on a tax-free basis.

Thoughts on the question whether the born-to-be European private company could potentially compete with a private limited liability company under Cyprus law

a summary and practical guidance on its impact on contractual obligations concluded by Cyprus companies

In this issue: (1) The new double tax agreement between Cyprus and Russia moves closer to ratification (2) Cyprus- Slovenia double taxation agreement (3) Cyprus- Kuwait double taxation agreement (4) Cyprus– Denmark double taxation agreement (5) Notifications under the Merchant Shipping (Fees and Taxing Provisions) Law of 2010 (6) Further suspension of limitation periods (7) News about our firm (8) Recent publications

Following the visit of Russian President Medvedev to Cyprus and the signing of the Protocol to the double taxation agreement on behalf of the governments of both countries, it is expected that the amended treaty will be ratified by the Parliaments of the two countries and will become effective from 1 January 2011.

In Cyprus, mergers are regulated by the Control of Concentrations Between Enterprises Law of 1999 (‘the Merger Law’) as amended. This law was enacted to regulate and promote the competitive market in Cyprus, and to bring Cyprus into line with the merger regime in the EU. The Law is implemented alongside the P rotection of Competition Law 13(I) of 2008, which replaces the old 1989 competition law and harmonises Cyprus competition law with the acquis communautaire.

The first months of 2010 have shown signs of recovery of the international real economy in many countries, but nevertheless financial stability in the international financial environment remains vulnerable.

The purpose of this short article, is to shed a little light on everyday legal matters in Cyprus.

Кипрская компания - Регистрация и администрация -Практические вопросы

С её предпочтительной налоговой системой, поддержанной с многочисленными соглашениями об избежании двойного налогообложения, и со стабильной, легко управляемой правовой системой, основанной на английском Общем Праве, Кипрская Компания стала ценным средством в международном налоговом планировании. Она стала инструментом, который  часто используют международные инвесторы, чтобы самым эффективным образом осуществлять свои инвестиционные возможности.

- Kinanis LLC

"Arbitration constitutes an alternative dispute resolution method…It constitutes a characteristic supplement of every modern legal system. The method survives without judicial means. Only in specified instances may [judicial means] be used against an arbitration award. In our internal legal system, these rules, as well as the wider rules on arbitration, are stipulated within specialised legislation namely, the Arbitration Law, Cap.4

Appointment to the European Economic Chamber of Trade, Commerce and Industry   -   Thinking of buying property in Northern Cyprus? - Think again!   -   New regulatory regime for fiduciary service providers

Law 12(I)/2006 (the Law) is the relevant legislation governing public procurement contracts in the Republic of Cyprus. The Law, which transposes EU Procurement Directives 17/2004 and 18/2004 into Cyprus’s legal system, provides for the coordination of procedures for the award of public works contracts, public supply contracts, public service contracts and related matters

What forms of business entities are relevant to the typical franchisor? Before proceeding with the conclusion of an Agreement with a Franchisor a decision must be taken as to what form the franchisee will take, there are several options, these being namely as a sole trader, a partnership or a limited company. We would advise, depending on the particular circumstances that generally s limited company is the better form for the franchisee to take.

THE INTERNATIONAL COMPARATIVE LEGAL GUIDE TO: Corporate Recovery and Insolvency 2009

Country Q&A Cyprus -  In Cyprus there is a well-established insurance industry, with all types of risk accepted. All insurance business, except for the Social Insurance Scheme which is operated by the state, is written in the private sector.

The European Commission has given its approval under EU state aid rules of the Cyprus government’s proposal to reduce the tax burden on companies engaged in international maritime transport by introducing a special tax regime for them.

JANUARY 2010 Newsletter

The only requirement for a valid arbitration agreement and subsequently a valid arbitration procedure in Cyprus is the arbitration clause to be in written form. The Cyprus domestic Arbitration Law Cap. 4 which regulates domestic arbitrations provides that the agreement to refer any present or future disputes to arbitration is irrevocable unless the Court decides otherwise.

A practical insight to cross-border Mergers and Acquisitions

A practical insight to cross-border Product Liability work

A practical insight to cross-border Corporate Recovery & Insolvency

Country Q&A: Cyprus

Law 12(I)/2006 (the Law) is the relevant legislation governing public procurement contracts in the Republic of Cyprus. The Law, which transposes EU Procurement Directives 17/2004 and 18/2004 into Cyprus’s legal system, provides for the coordination of procedures for the award of public works contracts, public supply contracts, public service contracts and related matters.

12.04.2009 - “The future of Cyprus as an International Business Centre” Elias Neocleous offers his views on the way forward for Cyprus. IMH has organized and held a conference on 9 April 2009 at the Hilton Park hotel in Nicosia with subject “The future of Cyprus as an International Business Centre”.

By Yiannos Georgiades 

By Rebecca E. Howarth

As a buyer, you should be aware of the protection that is available to you in the event of the late delivery of the immovable property you have purchased and also some of the things you need to avoid including in your contract.

by Yiannos G. Georgiades

The Transparency Requirements Law, Law 190(I)/2007 took effect on 1 January 2008. It transposes into domestic legislation the European Parliament and Council Directive 2004/109/EC on transparency requirements of listed transferable securities, and in part the European Commission Directive 2007/14/EC, which sets out detailed rules for the implementation of certain provisions of Directive 2004/109/EC.

practical insight to cross-border Product Liability work

This article provides a short account of the Cyprus Republic (“Cyprus”) legislative guidelines (hereinafter the “guidelines”) in connection to publicity and/or the release of information and/or inside information when securities and/or financial instruments are offered to the public and/or admitted to trading on a regulated market. It should be noted that the present merely serves as an indicative supplement to the existing legal framework set below and it should be read closely together with the same. Terms and/or definitions herein employed, except otherwise stated are in accordance with the context of Cyprus legislation.

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In a recent decision, a Cypriot district court rejected an application for the recognition and enforcement of an arbitral award issued by the Austrian Arbitral Centre due to the applicant's failure to produce the original arbitral agreement or a certified true copy of the arbitral agreement.Read more...

This is a Q&A article regarding the merger control issues in Cyprus and is reproduced with the kind permission of Law Business Research.  The article covers areas such as legislation and jurisdiction, notification and clearance timetable, remedies, involvement of others parties, future developments and more. Read more ...

Q&A article covering security and priorities; rescue and insolvency procedures; liability and transactions; international cases and proposed reforms.  Read more...

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

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.

Legislation

1   What legislation is applicable to bankruptcies and reorganisations?

Personal bankruptcy is governed by the Bankruptcy Law, Cap 5 and the Bankruptcy Rules, Cap 6. Corporate insolvencies and reorganisations are governed by the Companies Law, Cap 113.  Section 203 of the Companies Law provides two methods of winding up, namely:

• compulsory windingup by the court; and
• voluntary windingup, which may be either a members' windingup or a creditors' windingup.

Sections 198 to 201 of the Companies Law set out procedures for compromises with members and creditors, either within or outside insolvency, and for mergers and divisions of public companies.

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Although the Financial Collateral Arrangements Law ( No 43(I) of 2004 ( hereinafter referred to as the "Law" for the purposes of this article) was passed nearly two years ago, in March of 2004 and came into force on May 1st 2004 (the date of Cyprus accession in the European Union) its consequences and implications may still not be fully appreciated.

The European Union, in a continuous effort to reduce road traffic congestion and enhance multimodal transport, encourages and helps finance modal shifts from road freight transport to rail, waterway and short sea transport. The Marco Polo programme was established through EC Regulation 1382/2003 to promote this.

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Cyprus is an island of 9,251 square kilometres in the Eastern Mediterranean at the crossroads of Europe, Asia, the Middle East and Africa. It has a population of about 760,000 of whom 80 per cent are Greek Cypriots, 18 per cent Turkish Cypriots and Turks and the remaining 2 per cent foreign residents and workers. The official languages are Greek and Turkish, and English is also widely used, especially in business.