Cyprus

MARILOU PAVLOU CHRISTODOULIDES LLC (MPC Legal) ADVOCATES & LEGAL CONSULTANTS ARTICLE ON 19th EU SANCTIONS PACKAGE Sanctions adopted following Russia’s military aggression against Ukraine. The European Union (EU) continues to adopt further packages of economic sanctions against Russia due to the continuance of its military aggression against Ukraine, the latest of which is summarised below. The relevant legal framework is EU Regulation 269/2014 concerning restrictive measures in respect of actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine (“Regulation 269”) and EU Regulation 833/2014 concerning restrictive measures in view of Russia's actions destabilising the situation in Ukraine (“Regulation 833”) (hereinafter collectively referred to as the “EU Sanctions”). Note: The position is constantly evolving. Additional sanctions may be introduced in the coming days, and these will be the subject of future articles. This information is: of a general nature only and is not intended to address the specific circumstances of any particular individual or entity; not necessarily comprehensive, complete, or up to date; not professional or legal advice (if you need specific advice, you may consult us). 19th SANCTIONS PACKAGE The 19th EU Sanctions package (“This Package”) was released on 23/10/2025 and was adopted by the European Union in response to Russia’s ongoing war against Ukraine. The major amendments are as follows: Article 5(ad) of EU Regulation 833/2014 is amended as follows: (a)paragraph 1 is replaced by the following: It shall be prohibited to directly or indirectly engage in any transaction with a legal person, entity or body established outside of the Union that: is a credit or financial institution or an entity providing crypto-asset services or payment services that provides such services to legal persons, entities and bodies listed in this Regulation or Regulation (EU) No 269/2014 or is otherwise significantly frustrating the purpose of the prohibitions in those Regulations, as listed in Part A of Annex XLV to this Regulation; is a credit or financial institution or an entity providing crypto-asset services or payment services that supports Russia’s war of aggression against Ukraine, including by processing transactions or providing export financing for trade operations that frustrate the purpose of this Regulation, as listed in Part B of Annex XLV to this Regulation; is not a credit or financial institution or an entity providing crypto-asset services or payment services and is significantly frustrating the purpose of the prohibitions set out in Articles 3m, 3n and 3s of this Regulation, as listed in Part C of Annex XLV to this Regulation.’ 2.It shall be prohibited to engage, directly or indirectly, in any transaction with a legal person, entity or body established outside Russia as listed in Annex XLIV. Annex XLIV shall include the legal persons, entities or bodies established outside Russia that use the SPFS of the Central Bank of Russia or equivalent specialised financial messaging services set up by the Central Bank of Russia or the Russian State, or any systems of the Central Bank of Russia and any systems provided by any other Russian entity that include a financial messaging functionality, including the Fast Payment System (SBP) and Mir. 3.The prohibition in paragraph 2 shall not apply until 25 April 2026 to the execution of contracts concluded before 24 October 2025 with the legal persons listed in Annex XLIV by Council Regulation (EU) 2025/2033, or of ancillary contracts necessary for the execution of such contracts. 4.The prohibition in paragraph 2 shall not apply to the reception of payments due by a legal person, entity or body listed in Annex XLIV by 24 October 2025 pursuant to contracts performed before 25 April 2026.; Decision (CSFP) 2025/2032 regarding the 19th Sanctions package, expands the transaction ban that applies to legal persons, entities or bodies that are connecting to the system for transfer of financial messages (‘SPFS’) of the Central Bank of the Russian Federation (‘Central Bank of Russia’) or equivalent specialised financial messaging services set up by the Central Bank of Russia, to other payment services, such as the Russian National Payment Card System (in Russian, ‘Mir’) or the Fast Payments System (‘SBP’), set up by the Central Bank of Russia or by other Russian entities. It also adds exemptions for transactions that are necessary for the functioning of diplomatic and consular representations of the Union and of the Member States in third countries and for transactions made by nationals of a Member State who are residents of a third country, for transactions that are necessary for existing contracts and the reception of payments, and for Member States’ ethnic minorities in Russia. Annex XLIV to Regulation (EU) No 833/2014 is replaced by the following: ‘ANNEX XLIV List of legal persons, entities and bodies referred to in Article 5ac Name of the legal person, entity or body       Entry into force Bank BelVEB                                   25 February 2025 Belgazprombank                       25 February 2025 VTB Bank (PJSC) Shangai Branch 25 February 2025 CJSC Alfa-Bank (Belarus)           2 December 2025 OJSC Sber Bank (Belarus)           2 December 2025 VTB Bank (Belarus)                       2 December 2025 VTB Bank (Kazakhstan)           2 December 2025 In Part A of Annex XLV to Regulation (EU) No 833/2014, the following entities are added: Name of the legal person, entity or body         Entry into force ‘Payeer                                                             25 November 2025 CJSB JSCB Tolubay                                       12 November 2025 OJSC Eurasian Savings Bank                        12 November 2025 CJSC Dushanbe City Bank                             12 November 2025 CJSC Spitamen Bank (Tajikistan)                   12 November 2025 OJSC Commerce Bank of Tajikistan              12 November 2025’. In Part C of Annex XLV to Regulation (EU) No 833/2014, the following entities are added: Name of the legal person, entity or body       Entry into force ‘Blackford Corporation Limited                       12 November 2025 Fuel and Oil Dynamics FZE                           12 November 2025   With regards to the other measures introduced by the 19th Sanctions Package a brief description for each sector is indicated below: Energy ban on imports of Russian liquefied natural gas (LNG) into the EU, starting January 2027 for long-term contracts, and within six months for short-term contracts, and tightens the existing transaction ban on two major Russian state-owned oil producers (Rosneft and Gazprom Neft) the 19th package includes the listing of Litasco Middle East DMCC, Lukoil’s prominent shadow fleet enabler based in the United Arab Emirates An additional 117 vessels have been made subject to a port access ban and a ban on the provision of a broad range of services related to maritime transport, bringing the total number of designated vessels to 557 (19th package targets non-EU tankers - part of the shadow fleet circumventing the oil price cap mechanism Financial Listing of stablecoin A7A5 (crypto-asset), following the evidenced Russia’s increasing use of crypto in circumventing sanctions eight banks and oil traders from Tajikistan, Kyrgyzstan, the UAE and Hong Kong that circumvent EU sanctions are subject to a transaction ban five additional Russian banks – Istina, Zemsky Bank, Commercial Bank Absolut Bank, MTS Bank, and Alfa-Bank – are targeted using the same measure four banks from Belarus and Kazakhstan are also put under a transaction ban, due to their connections to Russian financial messaging and payment systems Russian Diplomats When travelling across the Schengen area beyond their country of accreditation, Russian diplomats will be obliged to inform in advance the relevant EU member state. EU member states may impose an authorisation requirement on Russian diplomats for traveling to their territories, based on visas or residence permits issued by another state Children EU is reinforcing accountability of those involved in activities of forced adoption of Ukranian children by listing 11 additional individuals Military targeting businesspersons and entities forming part of the Russian military-industrial complex, and operators from UAE and China producing or supplying military and dual-use goods to Russia Trade 45 new entities directly supporting Russia’s military and industrial complex by, inter alia, enabling the circumvention of export restrictions on computer numerical control (CNC) machine tools, microelectronics, unmanned aerial vehicles (UAVs) and other advanced technology items are subject to export restrictions Services Prior authorization for provision of services to the Russian government is mandatory (e.g. offering of AI services, high-performance computing services and commercial space-based services to Russian entities, including the Russian government) This Package prohibits European operators from providing services directly related to tourism activities in Russia Next Steps MPC Legal monitors developments within the EU closely and expects that additional rounds of sanctions may be imposed as events unfold. _______   Authors   Marilou Pavlou Christodoulides | Partner   Stella Kagia | Senior Associate

The Capital Markets team of Elias Neocleous & Co LLC has successfully advised on the sale of existing shares by Rangeglow Limited, a Cyprus-based entity, in connection with the initial public offering (IPO) of Cris-Tim Family Holding on the Regulated Market, Premium Category of the Bucharest Stock Exchange raising RON 454.35 million. Clifford Chance Badea advised the issuer on the IPO and its historic listing  formed part of Cris-Tim Family Holding’s broader development process and marked a significant milestone in the group’s growth, as it successfully transitioned into a publicly listed company. The IPO attracted exceptionally strong investor demand, achieving a subscription rate of approximately 197%. Following the listing, Cris-Tim Family Holding attained a market capitalisation of approximately RON 1.5 billion. This successful offering underscores the strength of the company’s market position and represents an important step in its continued expansion. Elias Neocleous & Co LLC remains committed to delivering exceptional legal services and strategic advice, guiding clients through complex capital markets transactions with expertise and precision. For further details, please contact  Demetris Roti.

With a well-established non-domicile regime and the recent alignment of its immigration rules with the EU Blue Card Directive, Cyprus already stands out as one of the most attractive EU jurisdictions for highly skilled professionals. Furthermore, the February 2025 tax reform proposals, though not yet enacted, signal a commitment to enhancing an already competitive environment, introducing measures aimed at extending non-dom benefits, broadening residency eligibility, and refining personal income taxation. Together, these developments underscore Cyprus’s unique positioning at the intersection of low-tax living and full EU mobility. For tech founders, asset managers, and internationally mobile professionals, Cyprus offers a framework that is both robust today and set to become even more compelling. The upgraded non-dom regime Cyprus’s non-domicile regime, launched in 2016, has become a leading incentive for high-net-worth individuals, international professionals, and entrepreneurs seeking tax efficiency within a European Union jurisdiction. The framework operates under the combined application of the Income Tax Law 118(I)/2002 (IT Law), the Special Defence Contribution Law 117(I)/2002 (SDC Law), and the Wills and Succession Law Cap 195 (W&S Law), all as amended. The 2025 proposed reforms retain the strategic advantage of the rules and introduce certain improvements. The benefits for non-doms remain substantial: exemption from Special Defence Contribution (SDC) on dividends, interest, and foreign rental income no capital gains tax on securities (with the exception of Cyprus-based real estate) no wealth, gift, or inheritance tax income over €100,000 remains eligible for the 50% exemption for 10 years Employment income attractiveness is now being enhanced; the tax-free threshold increases to €20,500. New personal deductions for families, mortgage interest, and green investments provide further tax planning opportunities, especially for those building a life in Cyprus. Moreover, the proposed reforms allow indefinite extension of non-dom status, subject to an annual fee. This replaces the previous 17-year cap, offering long-term fiscal planning security. This evolution of the non-dom regime ensures Cyprus remains a long-term base for wealth preservation and a safe haven in an increasingly competitive EU tax environment. Redefining tax residency rules Cyprus currently offers two main residency routes: the 183-day rule, based on physical presence the 60-day rule, allowing tax residency with a shorter stay if you have economic ties and no other residency Under the 2025 proposals, the 60-day rule is expanded to include individuals whose centre of business interests lies in Cyprus, even if their physical presence is minimal. This change shifts the emphasis toward economic substance over physical relocation; a major win for remote professionals and international entrepreneurs. This makes Cyprus particularly attractive to: digital nomads managing global ventures startup founders looking to anchor operations in an EU jurisdiction executives coordinating group structures from abroad In essence, the redefined rules break the traditional link between tax residency and constant presence, giving entrepreneurs far more flexibility in how they manage their time and tax exposure. To benefit, applicants must still demonstrate business operations or key economic decision-making located in Cyprus, and ongoing compliance with IT and SDC law through filings and declarations. This change modernises Cyprus’s tax framework, aligning it with a global workforce increasingly untethered from fixed locations. EU Blue Card: your mobility pass As of 7 July 2025, Cyprus has implemented the EU Blue Card, aligning its immigration framework with Directive (EU) 2021/1883. This harmonised permit offers third-country nationals a clear route into the EU job market. Combined with the tax advantages Cyprus offers, it’s a compelling package. Eligibility requires: a university degree or three years’ recent experience in a relevant field a binding offer of employment in ICT, pharma R&D, or shipping (excluding seafaring roles) a minimum gross annual salary of €43,632 Benefits of the Blue Card include: the right to live and work in Cyprus equal treatment with nationals in employment, education, and social security family reunification short-term travel within the EU (90 days) mobility to another EU Member State after 12 months of residence in Cyprus This allows skilled professionals to not only secure a favourable tax base but also leverage EU-wide mobility for business or career growth. Combined with the non-dom regime, the Blue Card transforms Cyprus into a regional gateway—one where talent can establish, grow, and scale cross-border ambitions with minimal friction. Strategic outlook for professionals The combination of a more flexible residency framework, an extended non-dom regime, and a fully functional Blue Card system puts Cyprus in a league of its own. Subject to the official adoption of the proposed reform: non-dom status can now be maintained indefinitely with a fee, offering certainty rare in EU tax law residency via economic interest frees professionals from the need to physically relocate new deductions support family life, real estate investment, and green upgrades—aligning tax incentives with personal priorities the corporate tax rate may increase to 15%, but strategic advantages remain via extended loss carryforward (from 5 to 10 years) and continued support for IP Box, Notional Interest Deduction, and Tonnage Tax regimes Whether you’re relocating as a professional or scaling a business through Cyprus-based entities, these changes empower you to structure your affairs with predictability, compliance, and efficiency. Final thoughts & future outlook Cyprus’s 2025 reforms are more than just technical updates—they represent a broader vision for economic competitiveness. By expanding access, rewarding substance, and aligning incentives with modern lifestyles, Cyprus offers a model worth watching. For professionals seeking an EU base without punitive tax consequences, or for businesses aiming to attract and retain top global talent, the updated framework presents an increasingly compelling proposition. The true potential lies in combining available instruments: Blue Card access, non-dom optimisation, and carefully structured long-term planning. With the legal and fiscal tools firmly in place, the jurisdiction enables strategic decision-making that balances compliance, opportunity, and resilience across shifting international environments. For tailored legal guidance on non-dom planning, EU Blue Card applications, or cross-border structuring, contact our team at Chrysses Demetriades & Co LLC.

In a long-anticipated move aligning Cyprus with European Foreign Investment Control standards, the Law on the Establishment of a Framework for Screening Foreign Direct Investments of 2025 [Law 194(I)/2025] has been published in the Official Gazette and will enter into force on 2 April 2026. The new regime introduces a structured screening process for foreign direct investments (FDI), in line with Regulation (EU) 2019/452, targeting transactions that may raise concerns for national security or public order in strategic and sensitive sectors. Under the new framework, non-EU/EEA/Swiss investors and third-country undertakings must notify and obtain prior approval from the Ministry of Finance before completing certain investments in strategic undertakings. The obligation to notify applies where an investment crosses defined legal thresholds, which include both transaction value and the level of control or influence acquired over the target enterprise, whether directly or indirectly. The competent authority may impose conditions, prohibit, unwind, or otherwise restrict transactions deemed to pose a risk to security or public order.  Failure to comply with the notification and approval requirements may lead to financial or other sanctions. For investors, financial institutions and corporates, FDI screening will become a key consideration in transactional planning, particularly in cross-border deals and joint ventures involving sensitive sectors, often in parallel with Merger Control compliance. Early legal assessment will be essential to determine whether a transaction falls within the scope of the framework and to ensure timely compliance with regulatory requirements. For further information or tailored guidance, please contact Polyvios Panayides ([email protected]) at Chrysses Demetriades & Co LLC.