Patrikios Legal > Limassol, Cyprus > Firm Profile

Patrikios Legal > Firm Profile

Patrikios Pavlou & Associates LLC is a leading, highly recommended and multi-awarded law firm based in Cyprus. With more than 60 years of experience in the local and international legal market, the firm is renowned for its involvement in some of the largest cross-border transactions and complex litigation and arbitration matters and for its exceptional client service in Cyprus and abroad.

Located in Limassol, one of the most attractive international business centres and rapidly developing cities in Europe, the firm is committed to providing its clients with top professional legal services, covering the full range of their business activities. A team of over 30 qualified professional associates and legal consultants advise multinational corporations, banks, financial institutions and HNWIs on their high-profile and complex matters in multiple practice areas:

• Dispute resolution & ADR
• Corporate, commercial and M&A
• Banking and finance
• Restructuring and insolvency
• Capital markets
• International tax planning
• Real estate, trusts and asset protection
• Ship registration and ship finance

Through a multi-disciplinary approach in delivering our services, together with our dedication to cross-border work, and our ongoing commitment to building long-lasting relationships, Patrikios Pavlou & Associates LLC has managed to establish a strong presence in the international legal market.   The firm’s international profile comprises of strong alliances with reputable worldwide law firms, particularly in Europe, Asia, USA and the rest of the CIS countries, as well as membership of various professional organisations globally, enhancing further the team’s ability to swiftly and efficiently respond to its clients’ ever-changing requests.

Patrikios Pavlou & Associates LLC offers comprehensive corporate services through Pagecorp Group, a group of companies associated through common ownership. With almost 30 years’ experience, the Group comprises of lawyers, legal consultants, company administrators, accountants and secretarial staff, who advise major organizations, start-ups and entrepreneurs on International Tax Planning, Cyprus International Trusts, Foreign Investment and Citizenship, and Accounting and Financial reporting, in order to establish their business in a low tax, transparent and regulated environment.

Since 1963, Patrikios Pavlou & Associates LLC has been acting for leading organizations and individuals with persistent commitment to excellence. Our determination is reinforced through our extended partnerships with companies around the globe that share the same philosophy, culture and values: invest for the future. We are confident that through strong belief in our core values and responsible actions, we will continue to provide top quality legal services with diligence, integrity and professionalism.

Interviews

Spotlights

DISPUTE RESOLUTION

Our Top Tier Dispute Resolution practice is the largest and most experienced department of the firm. As one of the leading departments in Cyprus, it is renowned for delivering exceptional service to clients. Senior & Managing Partner, Stavros Pavlou is an Elite Leading Individual in Cyprus and praised for his “very deep knowledge of the law”.

With a 56-year experience in the local and international legal market, the team successfully handles cases in conventional and alternative forms of litigation, including arbitration of international and domestic disputes, and mediation. The department’s transnational capabilities are substantial since lawyers have arbitrated commercial disputes in arbitration courts on a global level, including the London Court of International Arbitration, the Stockholm Arbitration Court, the Austrian Arbitration Centre, etc.

Headed by four partners, the dispute resolution team handles a wide range of claims and disputes, both locally and internationally, in respect of general civil, corporate and criminal litigation as well as administrative recourses to the Supreme Court of Cyprus including:

• Corporate and shareholders’ disputes
• Banking and finance disputes
• Negligence, incl. medical malpractice
• Bankruptcy, insolvency and receivership
• Landlord and tenant disputes
• Employment disputes
• Matrimonial law
• Defamation, libel and slander claims
• Breach of contracts
• Personal injury claims
• Road traffic accidents
• Insurance claims
• Admiralty claims

A sample of recent cases and projects handled includes the following:

• Representing companies which own an oil refinery in the Russian Federation, in shareholders’ disputes for the amount of USD 200 million for alleged breaches of shareholders’ agreement, misrepresentation and fraud.
• Handling over 50 cases, with an approximate total aggregate amount of USD 3 billion, relating to the registration, recognition and enforcement of Russian judgments and arbitral awards obtained by one of the leading and largest banks of Russia against various companies and individuals.
• For four and a half years, we have been representing a leading Russian bank in significant arbitration proceedings before a Cypriot tribunal, in a USD 40 million claim relating to the performance of certain bank guarantees; the Final Award has recently been received in the favour of our client pursuant to which the multimillion-claim of the claimants is dismissed.
• Representing high-net worth individuals in a multi-million dispute arising out of a joint venture for the construction of residential properties in Moscow.
• Advising before the London Court of International Arbitration (LCIA) on the enforcement of a Sale and Purchase Agreement for the sale of issued share capital through complex corporate structures (claim amount USD 800 million).
• Representing one of Cyprus’s biggest banks in relation to a recent amendment on Immovable Property (Transfer and Mortgage) Law No. 9/1965. We promoted applications/appeals with the District Courts, requesting that several provisions of article 44 of the Law, as amended, are unconstitutional; the Court agreed and declared certain articles of the Law unconstitutional, as breaching articles 23 and 26 of the Constitution.
• Advising India’s largest real estate construction company, which is also a key player in real estate investments, on matters relating to the enforcement and execution of an LCIA Arbitration Award; worth approximately GBP 350 million.
• Representing a major Russian financial institution on the recovery of over USD 1.5 billion in assets, by a leading Russian group of companies, through liquidation and other out of Court enforcement measures in order to ensure asset recoveries for debt repayment.
• Representing a large Russian bank in litigation proceedings in Cyprus, initiated against the bank and third parties (amount USD 119 million) on the basis of alleged breaches of contractual obligations by third parties for which, allegedly, the bank is responsible in tort under Russian law, as being their ultimate mother company.

CORPORATE & M&A

The corporate and M&A team at Patrikios Pavlou & Associates LLC is ranked in the top tier for Cyprus for providing professional, high-quality consultancy services to clients. The team effectively handles complicated cross-border transactions, including mergers and acquisitions, and assists large groups of companies and prestigious international law firms on Cyprus corporate law issues.

Clients of the corporate and M&A department include public and private companies and major international groups of companies operating in various industry sectors such as oil & gas, energy, metals production, automobile and engineering, IT, construction, financial services, aviation, transport and other.

Headed by three partners, the corporate team provides professional legal advice and guidance to clients in the following areas:

• Company formation and company administration
• Partnership formation and dissolution
• Corporate management, with full domiciliation services
• Corporate reorganization, reconstruction, restructuring and optimization of business structures
• Company liquidation and winding up
• Shareholder agreements and corporate governance
• Loan, agency and distributorship agreements
• Lease and hire-purchase agreements
• Share sale and purchase agreements
• Local and cross border mergers, acquisitions and amalgamations
• Joint ventures and cross border transactions
• International tax planning
• Legal and corporate due diligence
• Corporate finance, with a particular focus on takeovers, restructurings, mergers and acquisitions
• Trust Settlement and trust administration

A sample of recent cases and projects handled includes the following:

• Advising one of the world’s largest providers of products and services to the energy industry on its proposed acquisition (value of USD 975 million) of a Cyprus holding company and its subsidiaries.
• Engaged for the 4th consecutive year by a major corporate shareholder, wishing to sell a further 25% stake in a Cyprus holding company; the project involved several complicated share transfers and sale of loans in the form of shareholder financings (value EUR 420 million).
• Provided a complex legal memorandum to a major media and advertising services provider on the liquidation of one of its member companies, a Cyprus investment management company, which was also involved in litigation proceedings in the Supreme Court of the State of New York, USA.
• Providing detailed analysis of corporate governance matters in relation to two Cyprus holding companies, part of a very complicated legal structure with ultimate beneficial owners of various nationalities, BVI shareholders, shares held on trust by funds and Russian subsidiaries involved in the production and sale of steel, pipes and gas tanks.
• Advising a major Russian bank in relation to a complicated reorganization of an international corporate group operating in the oilfield sector, including Russian, Jersey and Cyprus companies.
• Engaged by a high calibre Greek entrepreneur to provide detailed legal assistance with the setting up of a Cyprus company involved in the online travel industry. Furthermore, we comprehensively assisted with all company incorporation procedures and we also provided serviced office space to accommodate his initial operational needs.
• Acted as the legal advisor to one of the largest Russian companies offering railway infrastructure construction services, on whether the entry into a particular pledge agreement, which constituted part to a larger financing transaction, would potentially be in breach of the Cyprus Companies Law provisions relating to the prohibition of the cross holding of shares.
• Having gained extensive expertise, we have successfully handled and completed numerous re-domiciliation procedures from Jersey, Panama and the BVI to Cyprus.
• Extensively reviewed and advised on the proposed website documentation such as sales paths, e-mail templates and the travel insurance policy relating to the provision of insurance by one of the world’s leading insurance companies.

BANKING AND FINANCE

The Banking and Finance team at Patrikios Pavlou & Associates LLC is ranked in the top tier for Cyprus, duly acknowledged for delivering outstanding legal services to its clients. With extensive experience in the legal market and the international culture, the lawyers and legal consultants of the Firm successfully handle challenging cross-border corporate finance transactions and banking projects.

The Firm’s clients include public and private companies, large multinational corporations that have their regional hub in Cyprus, entrepreneurs as well as a host of individual clients from Cyprus and abroad. In the banking and finance sector, the Firm provides ongoing advice to a large number of local and international banks and financial institutions.

Over the last years, Patrikios Pavlou & Associates LLC has been receiving increasing banking and finance work and thus, the department has expanded to meet the clients’ requests effectively and timely. Headed by three partners, the team provides professional legal advice and guidance to clients in the following areas:

• Corporate finance
• Structured finance
• Project finance
• Acquisition finance
• Equity and debt finance
• Ship finance
• Equity investment
• Restructurings and reorganisations
• Derivative and securities lending transactions
• Repurchase agreements [REPOs]
• General banking
• Recovery of loans
• Lease and hire-purchase agreements
• Letters of credit and bank guarantees
• Offerings and listings in international stock exchanges

A sample of recent cases and projects handled includes the following:

• • Advised for 6 consecutive years, a major Russian Bank on several facility agreements, amounting up to USD 7 billion to an international chemical group.
  • Advising a leading global investment banking, securities and investment management firm in relation to a number of issues concerning the Financial Collateral Arrangement Law and providing a legal opinion on financial collateral assistance matters arising out of certain Master Confirmations for pre-paid share forward transactions for shares issued by the largest international crude oil tanker company worldwide.
  • Advising one of the largest banks in Russia on a financing project of over USD 1 billion regarding a trade and exhibition centre in Moscow, Russian Federation.
  • Advising a leading Switzerland-based multinational financial services group in relation to the entry into a collar transaction with a Cyprus company (value of EUR 200 million) with regards to shares in an integrated global energy company based in Spain.
  • Advising a major Russian bank in relation to a EUR 700 million facility agreement for the largest scale high-tech project in the Russian mining industry.
  • Engaged by an Asian development bank to advice from a Cyprus law perspective on the provision of a loan amounting USD 4.1 million for a construction of petroleum facilities in Tajikistan.
  • Advising on the financing of a 75-metre yacht amounting USD 50 million provided by a large Swiss Bank.

• Represented one of the world’s most preeminent financial service firms in relation to a cross currency swap transaction, supplementing an ISDA Master Agreement, with one of the biggest investment firms in Cyprus.
• Providing legal advice to a German global banking and financial services company on the transfer of a Cypriot secured property it held by way of Cyprus pledges in respect of two facility agreements of USD 265 million to a new security agent.
• Advising a major Russian bank on the financing aspect of a major restructuring of the largest industrial construction group in Russia in order to fund the purchase price of the deal in the aggregate amount of approximately EUR ½ billion.
• Advised the corporate and investment banking division of the leading financial institution of the US in relation to a transaction of the amendment and restatement of a USD 250 million facility agreement due to the change of the custodian of shares of a DIFC entity.

Press Releases

Highly ranked legal firm and legal practitioners and excellent client service – Chambers & Partners 2023

10th July 2023 We are excited to announce that our law firm has, once again, been highly ranked by Chambers & Partners Europe guide.

Limassol Bar Association Conference on Sanctions

10th July 2023 The Limassol Bar Association seminar on sanctions is in full swing, featuring our Senior & Managing Partner,

Introducing the new employee’s work-life balance law

10th July 2023 Our Senior Associate, Nikoleta Christofidi has written a compelling article introducing the new Employee’s Work-Life Balance Law and amendments to the law governing Paid Annual Leave.

Insolvency Litigation – Lexology Getting The Deal Through – Cyprus

15th June 2023 Nasia Papakonstantinou and Yvoni Lambrianou contribute the Cyprus Chapter in LexGTDT’s Insolvency Litigation Guide. The guide’s 2022 edition enables jurisdictional compar

The Complex Commercial Litigation Review

15th June 2023 The 5th Edition of the Complex Commercial Litigation Review is now live.

Sanctions Overview: A practical approach

15th June 2023 Patrikios Pavlou & Associates LLC, is proud to have had the opportunity to attend the Cyprus Fiduciary Association’s conference where we were fortunate enough to hear from Mr. Stavros Pavlou and Stella Strati as speakers.

Highly ranked legal firm and legal practitioners and excellent client service – Chambers & Partners 2023

15th June 2023 We are excited to announce that our law firm has, once again, been highly ranked by Chambers & Partners Europe guide.

Staff Retreat! #60yearsPatrikiosPavlou

15th June 2023 We had the privilege of celebrating our #lawfirm‘s 60 years of success with a special weekend for OUR PEOPLE as a start for this year’s events and celebrations marking this huge milestone.

Celebrating Our Partners’ Recognition by Legal 500: A Testament to Legal Excellence

15th June 2023 We are excited to announce that our partners have been recognized by Legal 500, a prestigious legal directory known for identifying top legal professionals.

Mr. Stavros Pavlou Appointed as Regional Representative Asia General of IBA’s Litigation Committee

15th June 2023 Last week, our Senior & Managing Partner, Mr. Stavros Pavlou, FCIArb, Bsc (Econ), Barrister, TEP attended the prestigious International Bar Association Mid-Year Leadership Meetings in Helsinki, Finland.

Legal Horizons: Global Connections and Excellence

15th June 2023 What a whirlwind month it has been for our firm!  Our team of lawyers has been on the move, attending not just one or two,

Limassol Bar Association Conference on Sanctions

15th June 2023 The Limassol Bar Association seminar on sanctions is in full swing, featuring our Senior & Managing Partner, 

Women Issue of In Business Magazine

15th June 2023 our partner, Stella Strati, has been featured in the Women Issue of In Business Magazine.

Angelos Onisiforou and Stylianos Trillides have been promoted to Partners

7th March 2023 We are thrilled to announce that our firm promoted Angelos Onisiforou and Stylianos Trillides to Partners, with effect from 1 January 2023.

Leading legal experts in Europe, Middle East & Africa

23rd April 2021

A TOP TIER law firm by The Legal 500! Again!

23rd April 2021 The Legal 500, EMEA 2021 edition once again recommends our law firm as a TOP TIER firm in Dispute Resolution and Tax and ranks our Banking & Finance, Commercial, Corporate and M&A, and Real Estate and Construction practice areas amongst the best in the Cyprus legal market.

Cyprus Bar Association exams: Trainee Lawyer Nicholas Yiasemis FIRST nationally

23rd April 2021 We are extremely proud of our trainee lawyer Nicholas Yiasemis for having successfully passed all his Cyprus Bar Association examinations with a very high score. He is the top of his class, ranked FIRST nationally! We wish him every success in his new journey in the legal profession!

Highly Ranked in Chambers & Partners Global

3rd March 2021 Our “widely respected team” is once more highly ranked in the Global edition by Chambers & Partners, one of the world’s leading providers of ratings and recommendation of legal firms.

Stavros Pavlou registered as a DIFC practitioner

7th January 2021 We are very proud that, following the registration of our firm with the DIFC Courts in Dubai, now our Senior & Managing Partner, Mr Stavros Pavlou, has been registered as a DIFC practitioner, and obtained full Rights of Audience before the DIFC Courts.  From the available records, Mr Pavlou is the first Cypriot lawyer to be registered as a practitioner with this very busy International Commercial Court.We are very proud that, following the registration of our firm with the DIFC Courts in Dubai, now our Senior & Managing Partner, Mr Stavros Pavlou, has been registered as a DIFC practitioner, and obtained full Rights of Audience before the DIFC Courts.  From the available records, Mr Pavlou is the first Cypriot lawyer to be registered as a practitioner with this very busy International Commercial Court.

Our lawyers have been appointed in Committees of the Cyprus Bar Association

7th January 2021 With professional skills to provide top quality legal services and a range of backgrounds and interests, eight lawyers of our team have been selected among many candidates and appointed in various committees of the Cyprus Bar Association and the Limassol Bar Association.With professional skills to provide top quality legal services and a range of backgrounds and interests, eight lawyers of our team have been selected among many candidates and appointed in various committees of the Cyprus Bar Association and the Limassol Bar Association.

Katerina Philippidou and Theodoros Symeonides have been promoted to Partners

7th January 2021 Reflecting our firm’s commitment to investing in the future and the depth of our team’s talent, Patrikios Pavlou & Associates LLC promoted Katerina Philippidou and Theodoros Symeonides to Partners, with effect from 1 January 2021.Reflecting our firm’s commitment to investing in the future and the depth of our team’s talent, Patrikios Pavlou & Associates LLC promoted Katerina Philippidou and Theodoros Symeonides to Partners, with effect from 1 January 2021.

Cyprus and the “new normal”, reasons to invest

22nd May 2020 As the world is seeking ways to achieve the new normal in their daily lives and business activities, Cyprus is also confidently restarting its economy as the country has been praised as one of the countries to successfully manage the COVID-19 epidemic.

Podcast ‘Alternative Dispute Resolution: The Road to the Future’

22nd May 2020 Our Senior & Managing Partner, Stavros Pavlou, FCIArb gave a podcast interview to LegalMatters, and provided a clear and structured opinion on the steps that Cyprus should follow with regards to Dispute Resolution. He analysed the reasons why he believes that the current Court system of administration of justice in Cyprus is at a dead-end, and that the only immediately available escape route is to embrace Alternative Dispute Resolution and implement a new Arbitration Law.

Transforming General Meetings: Covid-19 and other viruses

29th April 2020 Cyprus companies are faced with the challenge of finding the new normal in a changing climate, along with the need to facilitate the running of their business. The introduction of strict measures imposed on human social conduct all over the world due to the Covid-19 outbreak, including lockdowns, restrictions on travel, public gatherings and social interactions, are serious obstacles for companies that need to uphold their obligations with regards to general meetings.

Leading legal experts in Europe, Middle East & Africa

29th April 2020 Our “strategic” Senior and Managing Partner, Stavros Pavlou, is a Leading Lawyer in the Dispute Resolution and Tax areas, recommended for being “a chess master who maps a strategy several steps ahead” and for finding a way to cut through complexity. He is also highly recommended as a primary contact in Corporate, Commercial and M&A, Banking and Finance and Real Estate & Construction.

A MULTI-TOP TIER law firm for The Legal 500 once more

29th April 2020 We are very proud that The Legal 500, EMEA 2020 edition once again recommends our law firm as a TOP TIER firm in Dispute Resolution and Tax and ranks our Banking & Finance, Commercial, Corporate and M&A, and Real Estate and Construction practice areas amongst the best in the Cyprus legal market.

Top Tier in Dispute Resolution

6th March 2020 We are thrilled that Chambers & Partners Global, one of the world’s leading legal directories, recommends our Firm as a Top Tier firm in Dispute Resolution for its capability of “acting on complex, high-value international and Cypriot disputes involving construction companies, financial institutions and private clients” and its “strength covering debt recovery, international arbitration and fraud claims”.

CAMS certificate – Milto Charalambous

18th February 2020 Our Assistant Compliance Officer, Milto Charalambous, has successfully completed the CAMS (Anti-Money Laundering Specialist) certificate. She now has the core competencies and essential knowledge in the Anti-Money Laundering field.

Angeliki Epaminonda has been promoted to Partner

21st January 2020 Congratulations to Angeliki Epaminonda for her promotion to Partner! Angeliki joined our firm for her legal training in 2009, and she has since proven to be a highly committed individual. She stood out for her professionalism, dedication and integrity, and exceptional legal skills. Angeliki’s promotion strengthens our commitment to diversity, as 6 in 8 partners at Patrikios Pavlou & Associates LLC are women...

Highly Regarded Lawyers – IFLR1000 Financial & Corporate

13th November 2019 We are excited that IFLR 1000, the only international legal directory dedicated to financial and corporate transactional work, has ranked our firm among the top law firms in Cyprus in this field and recommends our law firm as a “strong Financial and Corporate firm with strong cross-border capabilities”.

Certified Continuing Professional Development Center

18th April 2019

Patrikios Pavlou & Associates LLC has been certified by the Cyprus Bar Association as a Continuing Professional Development Training Centre.

Internal Lawyers Seminar

6th April 2018

Our firm organized an exciting retreat weekend for the legal team that aimed in encouraging the lawyers to enforce internal ties, discuss internal matters, develop their skills further and have fun with the colleagues. The retreat weekend took place on the 24th and 25th February 2018 in Elysium Hotel in Paphos.

A comparison of Cyprus and BVI corporate structures in the light of recent global tax reforms

22nd March 2018

The recent revelations in the Panama and Paradise Papers illustrated the need for companies to make a shift towards more responsible fiscal behaviour and tax responsibilities. International guidelines such as the OECD guidelines and the 4th EU AML Directive clarify that evasive fiscal practices will be disclosed. This article analyses the implications on some of the most established corporate structure vehicles, British Virgin Islands (BVI) business companies and Cyprus companies, by outlining their key characteristics and evaluating how each jurisdiction is adhering to stricter international compliance standards.

Cyprus VAT on Land – Updates by the Tax Department

13th March 2018

In November 2017, the Cyprus parliament voted an important amendment to the Cyprus VAT Legislation, which amends the main VAT Law N.95(I)/2000 concerning taxation of building land, in order to align it with the provisions of EU VAT Directive 2006/112/EC. The amendment has entered into force on 2 January 2018.

Prometheus Award for Mr Stavros Pavlou

13th February 2018

On Monday 11th December 2017, our Senior and Managing Partner, Mr Stavros Pavlou was awarded the Prometheus prize in Moscow for his invaluable contribution towards the protection of Russian business interests in Cyprus and abroad. 

Double Tax Treaty for between Cyprus and Saudi Arabia

11th January 2018

The Cyprus Ministry of Finance has announced that Cyprus has entered into a double tax agreement with Saudi Arabia for the avoidance of double taxation (‘DTT’), which aims to prevent tax evasion. 

Key Speakers at the Cyprus Fiduciary Association seminar

20th December 2017

Once again, The Cyprus Fiduciary Association (CFA) selected our law firm to present another specialised and highly demanded seminar, the “Advanced Directors’ Workshop”, which took place on 30th November and 1st December 2017 in Nicosia and Limassol respectively.

Contributing to local and international conferences and seminars

26th October 2017

The Cyprus Fiduciary Association (CFA) organised a valuable and practical seminar titled “Rights of Settlor and Beneficiaries under a Trust” on 28 and 29 September 2017 in Nicosia and Limassol respectively.

Successful representation at the 2nd English-Cypriot Law Day conference and developing further the A

5th October 2017

The Cyprus Bar Association and the English Bar Council successfully organised the 2nd EnglishCypriot Law Day conference, which was held in Limassol, Cyprus on the 8th September 2017.... As a leading law firm, Patrikios Pavlou & Associates LLC was one of the main contributors to the event. 

ILA Conference Cyprus

11th August 2017

The Cypriot, French and Hellenic branches of the International Law Association (ILA) organised a successful conference on International Arbitration in Larnaca, Cyprus on 30th June and 1st July 2017.

Top-Tier Law Firm & Leading Lawyers recognitions from one of the world’s leading legal directories

26th April 2017

Legal 500, the world’s legal guide to the leading law firms and outstanding lawyers in over 100 jurisdictions, has recently released tiered rankings for the EMEA region for 2017. We are extremely proud that our law Firm is placed in the TOP tier rankings for Cyprus.

Sustainable success through leading rankings, new membership and continuous development

7th April 2017

We are very proud that Patrikios Pavlou & Associates LLC is ranked once more as a leading law firm in Cyprus by Chambers & Partners Global.

Cyprus introduces rules to implement Country by Country reporting requirements

13th February 2017

The Cyprus Minister of Finance issued a Decree on 30 December 2016, introducing a mandatory Country by Country (CBC) reporting requirement for multinational enterprise groups generating consolidated annual turnover exceeding €750m (MNE Group). 

citizenship by investment programmes

7th February 2017 The Cypriot passport ranks among the strongest in the world, as holders are able to travel to 146 countries without a visa, Cyprus Business Mail reports on 29th December 2016...

Delivering a proficient seminar on The Duties & Liabilities of Trustees

15th November 2016 The Cyprus Fiduciary Association (CFA) organised an interesting, two-day seminar on “The Duties and Liabilities of Trustees” which took place on 19th and 20th October 2016, at St Raphael Hotel Limassol and the Filoxenia Conference Center Nicosia, respectively.

Legal Developments

QUESTIONNAIR

12th April 2024 Legislation 1. What domestic legislation enables economic, financial and trade sanctions to be implemented in your jurisdiction?

Crypto Assets Service Providers MiCA is around the corner!

15th June 2023 On the 4th June 2018 the Republic of Cyprus along with 21 other Member States and Norway agreed to sign a Declaration creating a European Blockchain Partnership for the specific purpose of establishing a European Blockchain Services Infrastructure.

The Downfall of FTX: Brief and comment

15th June 2023 n the wake of the collapse of FTX, which was ranked as the world’s third-largest cryptocurrency exchange just days before declaring bankruptcy[1],

Sanctions Compliance Services

15th June 2023 During the last year, sanctions and restrictive measures have been imposed against a number of financial institutions, entities and individuals.

Corporate Tax 2023

15th June 2023

1. Types of Business Entities, Their Residence and Basic Tax Treatment

1.1    Corporate Structures and Tax Treatment

Businesses in Cyprus generally adopt a corporate form. The most common type of corporate form is that of a private (or public) limited liability company with shares. A Cyprus company is fiscally opaque for tax purposes; therefore, it is taxed as a separate legal entity.Pursuant to Cyprus law, a company is a legal person with separate legal personality, distinct from its members and its directors. Thus, its shareholders are not personally liable for the obligations of the company and the liability of the shareholders is limited to the share capital contributed. The existence of the company does not depend on the existence or continuation of its members.Additionally, a Cyprus company may be limited by guarantee. Usually, companies limited by guarantee are incorporated as non-profit organisations in order to pursue charitable purposes.

1.2    Transparent Entities

Cyprus law allows for the establishment of general and limited partnerships. A partnership is not treated as a separate taxable person. It is a transparent entity and the tax is imposed on the partners and not on the partnership. Partnerships are widely used in joint venture projects and in smaller (usually family-owned) enterprises.

.1.3    Determining Residence of Incorporated Businesses

The test used in Cyprus for determining the residence of incorporated businesses and transparent entities is the so-called management and control test. Cyprus income tax legislation does not include a clear provision on how an entity becomes a Cyprus tax resident. General practice looks at the management and control thereof.

The minimum requirements for an entity to be considered a Cyprus tax resident are quite general and include:

• the place of residence of the majority of the directors;
• the place where the meetings of the board of directors are held; and
• the place where the general policy of the entity is formulated.

1.4    Tax Rates

Tax Rates Paid by Incorporated Businesses, the corporation tax rate is 12.5%. Business profits of Cyprus tax resident companies, adjusted in relation to allowances and exemptions, are subject to a flat tax rate of 12.5%.

Individual Tax

RatesIncome for individuals is subject to progressive tax rates. The first EUR19,500 is tax-free, the next EUR8,500 is subject to a tax rate of 20%, the next EUR8,300 is taxed at 25%, the next EUR23,500 at 30% and any amount above EUR60,000 at 35%. A number of deductions and personal allowances are available.

Businesses owned directly by individuals are subject to the individual tax rates. The same applies to businesses owned through transparent entities.

2. Key General Features of the Tax Regime Applicable to Incorporated Businesses

2.1 Calculation for Taxable Profits

Business profits of a Cyprus company, adjusted for various dis allowances and exemptions, are subject to tax at 12.5%. Cyprus tax residents are taxed on their worldwide Profits are taxed on an accrual basis and the International Financial Reporting Standards are followed. Generally, expenses wholly and exclusively incurred by a company in the production of tax- able income are allowable. Private expenses, expenses not matched to taxable income or not validated through proper supporting documentation, provisions (depreciation, amortization, impairment, obsolete stock), expenses linked to non-taxable assets, and exchange differences are considered as non-deductible expenses. However, capital allowances, balancing allowance calculated on the disposal of a non-current asset, notional interest deduction, and notional loss in related-party transactions are also deductible.

2.2    Special Incentives for Technology Investments

The current Cyprus IP tax regime is applicable as of 1 July 2016. This follows the nexus approach – according to which, a direct link between qualifying income and own qualifying expenses is essential for the IP to qualify. The level of the qualifying profits is positively correlated to the extent that R&D activities are performed by the same entity. Under the previous IP box regime that applied in Cyprus, an overall 80% deduction on profits was granted. Under the current IP tax rules, 80% of the overall income derived from the qualifying intangible asset is treated as a deductible expense. A qualifying intangible asset is defined as an asset that, as a result of R&D activities, has been acquired, developed or exploited by a person within the course of carrying out their business. Such assets specifically include:

• patents;
• computer software; and
• other IP that is legally protected and comprises:
  • utility models;
  • IP assets that provide protection to plants and genetic material or orphan drug destinations, as well as extensions of protection for patents; or
  • non-obvious, useful and novel IP assets (which are certified as such by an appropriate authority) where the person utilizing such does not generate annual gross revenues in excess of EUR7.5 million from all intangible assets (or EUR50 million for groups).

Qualifying intangible assets specifically exclude trade marks, business names, brand image rights and other IP rights used for the marketing of products and services. Persons that may benefit from the Cyprus IP tax regime include Cyprus tax-resident taxpayers, tax-resident permanent establishments (PEs) of non-tax resident persons, and foreign PEs that are subject to tax in Cyprus.

2.3    Other Special Incentives

In addition to the Cyprus IP tax regime explained in 2.2 Special Incentives for Technology Investments, there are a number of special incentives that apply generally – as well as to particular industries – in Cyprus. Cyprus Holding Companies Cyprus represents an attractive jurisdiction in which to set up a holding company. Specifically, dividend income received by a Cyprus holding company is generally exempt from any income tax in Cyprus (subject to the hybrid instrument exception explained in 9.6 Proposals for Dealing With Hybrid Instruments) and from  Special Defence Contribution (SDC) (subject to the passive dividend rule explained in 6.3 Tax on Dividends From Foreign Subsidiaries). Also, no withholding tax applies to any outgoing dividend or other profit distributions or interest, irrespective of the existence of a double-tax treaty (DTT). Furthermore, profits from the sale of shares are tax-exempt. In general, no restrictions on foreign share ownership exist and, as a result, a foreign investor is allowed to be the sole shareholder of a Cyprus company. Tonnage Tax System Cyprus tax-resident ship-owners or ship management companies that qualify under the relevant legislation with regard to qualifying ships (as defined therein) engaged in qualifying shipping activities (as defined therein) can fall under the Tonnage Tax System (TTS). The TTS refers to flat given rates of tax based on the net tonnage of the ship – ie, no requirement for a computation of tax-adjusted profits exists. It is also important to note that there is no tax levied on the disposal of qualifying ships and that dividends distributed out of companies under the TTS are not subject to SDC. Incentives to Individuals Special incentives are also provided to individuals. In 2022, a tax incentive was introduced that provides that a natural person employed for the first time in Cyprus (as of 1 January 2022) enjoys a tax exemption of 50% for a period of 17 years provided they have previously not been resident in Cyprus for a period of at least ten consecutive years and earn more than EUR550,000 per Furthermore, individuals who first take up employment in Cyprus after 26 July 2022, with annual emoluments lower than EUR55,000, will be eligible for a 20% or EUR8,550 exemption (whichever is lower) for a maximum period of seven years. An individual must have been employed abroad for at least three consecutive years prior to the commencement of employment in Cyprus in order to claim this exemption, which can be claimed from the year after taking up employment in Cyprus. Non-doms Also, individuals who are not tax-resident in Cyprus or individuals who are tax-resident but non-domiciled in Cyprus are not subject to SDC on dividends, interest or rents.

2.4    Basic Rules on Loss Relief

On a company level, tax-adjusted losses can  be carried forward and be set off against tax- adjusted profits for the next five years. Losses cannot be carried back.

On a group level (subject to the existence of certain criteria and the formation of a tax group), group members may surrender losses from one loss-making member to another profitable one. A direct or indirect holding of at least 75% for the entire tax year is necessary for a company to be considered as forming part of a tax group. As of 2015, the interception of companies established in the EU – or in countries that either have a DDT with Cyprus or have signed the OECD terms for exchange of information – can be taken into consideration for the calculation of an indirect holding. Furthermore, group relief is available between companies established in EU member states, provided that the EU subsidiary has exhausted all means of surrendering or carrying forward the losses in its own state.

2.5    Imposed Limits on Deduction of Interest

The Cyprus Income Tax Law provides that any interest relating to (or that is deemed to relate to) the cost of acquiring a private motor vehicle irrespective of whether it is used in the business – or the cost of acquiring any other asset not used in the business is not deductible for a period of seven years. The Commissioner of Taxation has taken the position that shares are not an asset used in the business and, as such, any interest on loans to acquire shares is not deductible for a seven-year period. This position is justified on the grounds that any income from the holding of shares (ie, dividends and capital gains) is exempt from corporation tax. As of 1 January 2012, the above-mentioned pro- vision does not apply in cases where new shares are acquired directly or indirectly in a wholly owned subsidiary – provided that this subsidiary does not own any assets that are not used in the business. If this subsidiary owns assets that are not used in the business, the restriction of interest will only correspond to the percentage of assets not used in the business. Also, from 1 January 2020, Cyprus tax legislation contains an interest limitation rule (ILR) that limits the otherwise deductible-exceeding borrowing costs of the Cyprus taxpayer/Cyprus group to 30% of adjusted taxable profit (taxable EBITDA). The ILR contains an annual EUR3 million safe harbour threshold.

2.6    Basic Rules on Consolidated Tax Grouping

No rules for tax grouping exist, apart from the basic rules for group tax relief described in 2.4 Basic Rules on Loss Relief.

2.7    Capital Gains Taxation

In Cyprus, no capital gains tax exists, apart from the taxation of gains from the disposal of immovable property situated in Cyprus. The profits from the sale of shares are exempt from any taxation. Capital gains tax applies only to direct and indirect disposals of real estate situated in Cyprus. The applicable rate is 20% and is applied on gains from the disposal of immovable property or gains from the disposal of shares that directly or indirectly own immovable property situated  in Cyprus.

2.8    Other Taxes Payable by an Incorporated Business

A stamp duty fee may be payable by an incorporated business on a transaction. Stamp duty is payable on any document that concerns any property located in Cyprus or on matters to be executed in Cyprus. For contracts with a value between EUR5,001 and EUR170,000, the current rate of stamp duty is EUR1.50% for each EUR1,000 or part thereof. For contracts with a value of more than EUR170,000, the current rate of stamp duty is EUR2 for every EUR1,000 or part thereof, with a ceiling of EUR20,000. This maximum amount is payable on any document or on any transaction that has several documents; in such case, the parties may choose which of the transaction documents is the main document and only that main transaction document will be subject to  the full stamp duty. The other transaction documents may be stamped as secondary documents, in the amount of EUR2 each – provided they are dated the same day (or very close) as the main transaction document. A number of instruments carry a fixed stamped duty, as per the provisions of the Cyprus Stamp Duty Law.

2.9    Incorporated Businesses and Notable Taxes

Value Added Tax: Incorporated businesses may be subject to  VAT. The standard rate of VAT is 19%; however, reduced rates of 5% and 9% apply to certain supplies. Special Defence Contribution: SDC is payable on passive income – namely, rents, dividends, and passive interest income – by Cyprus tax-resident companies and individuals who are both tax residents and domiciled in Cyprus. Dividends received by individuals (resident and domiciled in Cyprus) are subject to an SDC rate of 17%. Dividends received by Cyprus tax-resi- dent companies are not subject to SDC (subject to specific exceptions mentioned in 6.3 Taxation on Dividends from Foreign Subsidiaries). The SDC rate on interest for both natural and legal persons is 30%. Rent received by companies and by tax-resident and domiciled individuals is subject to SDC at the effective rate of 2.25% (3% on gross rents less 25%).  

3. Division of Tax Base Between Corporations and Non-corporate Businesses

3.1 Closely Held Local  Businesses

Closely held local businesses usually operate in corporate form – namely, as private limited liability companies with the main reason for this is the lower corporate tax rate compared with the tax rates applicable to individuals or the tax treatment of partnerships.

3.2 Individual Rates and Corporate Rates

The corporate and individual tax rates are included in 1.4 Tax Rates. No particular rules exist to prevent individual professionals from earning income at corporate rates. Such professionals have the right to incorporate legal entities and conduct their business through such. If income is earned through such companies, it is taxed at the corporate tax rate. If the individual conducts business in their name, such individual is taxed at individual rates. For specific professions (eg, advocates and doctors), an authorization from the relevant regulator (eg, the Legal Council) is required prior to the incorporation of a special purpose company (such as a lawyers’ limited company).

3.3    Accumulating Earnings for Investment Purposes

Currently, there are no rules to prevent a Cyprus company from accumulating earnings – provided that the beneficial owner of the same is not a Cyprus tax resident or is a Cyprus tax resident but non-domiciled. If the beneficial owner is a Cyprus tax resident and domiciled, the deemed distribution rules will come into effect, which provide that 70% of the accounting profits after the deduction of tax must be distributed two years from the end of the year in which the profits were earned. On such a deemed distribution, 17% SDC and 2.65% national health contributions must be withheld and paid to the tax authorities.

3.4    Sales of Shares by Individuals in Closely Held Corporations

The gain on the sale of shares is exempt from any taxation in Cyprus. Dividends received by individuals (resident and domiciled in Cyprus) are not subject to income tax but are subject to an SDC rate of 17%. A physical person who is a Cyprus tax resident but non-domiciled in Cyprus is exempt from the obligation to pay SDC. This also applies to individuals who are foreign tax residents.

3.5    Sales of Shares by Individuals in Publicly Traded Corporations

See 3.4 Sales of Shares by Individuals in Closely Held Corporations.  

4. Key Features of Taxation of Inbound Investments

4.1    Withholding Taxes

Cyprus does not apply any withholding tax on dividends or interest paid to non-residents (or  to Cyprus tax residents who are non-domiciled). Regarding the payment of royalties to a non- Cyprus tax resident, a maximum 10% withholding tax applies on the gross amount of such payment if the royalty rights were used in Cyprus (5% in relation to films). Also, in relation to dividends, interest and royalties paid to entities incorporated in another EU member state, the provisions of the relevant EU Directives apply. Furthermore, the gross income derived by an individual who is not tax-resident in Cyprus  from the exercise in Cyprus of any profession  or public entertainment is subject to a maximum withholding tax of 10% (reduced by any DTT favourable rate). The obligation to withhold the tax lies on the Cyprus tax-resident person that has invited the non-resident professional/ entertainer. The maximum withholding tax for services regarding the exploration, extraction or exploitation of the continental shelf – as well as the establishment and use of pipelines and other installations on the ground, seabed and/or the surface of the sea – is 5%. Also, no withholding tax applies on any out going dividend or other profit distributions or interest, irrespective of the existence of a DTT. Furthermore, profits arising from the disposal of titles (shares) are tax-exempt. Non-Cyprus tax residents or non-domiciled Cyprus tax residents who are shareholders of a Cyprus company are not subject to any SDC.

4.2    Primary Tax Treaty Countries

Cyprus enjoys a wide network of DTTs, as it has entered into such with more than 60 countries. The majority of these treaties follow the OECD Model Tax Convention on Income and on Capital (the “OECD Model”) – with the exception of the DTT with the USA, which follows the most recent model of US agreements. Foreign investors usu- ally use Cyprus companies to make investments in local corporate stock or debts.

4.3    Use of Treaty Country Entities by Non-treaty Country Residents

The author is not aware of any cases in which the local tax authorities have challenged the use of treaty-country entities by residents of non-treaty countries.

4.4    Transfer Pricing Issues

The only transfer pricing rules that were applicable in Cyprus up to 2022 related to intragroup financing activities. However, on 30 June 2022, the Cyprus Parliament amended Section 33 of the Cyprus Income Tax Law and introduced new transfer pricing legislation. The new rules are effective as of 01 January 2022 and cover all types of transactions between related parties in excess of EUR750,000 per category of transaction. The types of transaction include sale and purchase of goods, provision and receipt of services, any IP-related transaction, financing transactions, as well as other transactions between related parties. In relation to the definition of the connection between related parties, the 25% relationship test has been introduced. Moreover, transfer pricing documentation compliance requirements have been introduced in relation to Cyprus tax-resident persons and/or PEs of non-Cyprus tax-resident entities located in Cyprus that are engaging in local or cross- border transactions. Such transfer pricing documentation must be prepared on an annual basis, prior to the income tax return submission for the relevant tax year, and it must include the Master File, the Local File and the Summary Information Table. The new transfer pricing rules have also introduced advanced pricing agreement procedures.

4.5    Related-Party Limited Risk Distribution Arrangements

Tax authorities do challenge related-party transactions in general. As already mentioned in 4.4. Transfer Pricing Issues, Cyprus has recently re-enforced its transfer pricing regulations by introducing the requirement for performing transfer pricing studies for all related-party transactions.

4.6    Comparing Local Transfer Pricing Rules and/or Enforcement and OECD Standards

As mentioned in 4.4 Transfer Pricing Issues, Cyprus introduced new transfer pricing rules in 2022. Such rules, which are effective as of 2 January 2022, do not vary from OECD standards. Transactions between related companies are obliged to follow the arm’s-length principle as set out in the OECD Transfer Pricing Guidelines.

4.7    International Transfer Pricing Disputes

Transfer pricing rules have been adopted since 2017 (and updated in 2022) and, given that this is something relatively new in Cyprus, the author is not aware of any disputes resolved by local authorities. However, due to the fact that extensive reform of the applicable transfer pricing rules in Cyprus took place in 2022, the local tax authorities are expected to be more aggressive on transfer pricing matters from now on.  

5. Key Features of Taxation of Non- local Corporations

5.1    Compensating Adjustments When Transfer Pricing Claims Are Settled

The Cyprus tax authorities do not have any experience of mutual agreement procedures (MAPs) under a transfer pricing arrangement. Therefore, if an adjustment is made from a foreign tax authority, the corresponding adjustment will not be allowed/made for Cyprus tax purposes. The reason for this is the absence of a relevant regulatory framework.

5.2    Taxation Differences Between Local Branches and Local Subsidiaries of Non- local Corporations

The taxation of local branches of foreign corporations is no different to that of local subsidiaries of foreign corporations.

5.3    Capital Gains of Non-residents

There is no capital gains tax applicable in Cyprus in relation to profits from the sale of shares. Profits from the disposal of titles are exempt from any tax in Cyprus. Titles are defined as shares, bonds, debentures, founders’ shares, and other titles of companies or other legal persons incorporated in Cyprus or abroad (and rights thereon).

5.4    Change of Control Provisions

Any disposal to related parties should be executed on an arm’s-length basis. Moreover, Cyprus introduced exit taxation rules in 2020, within the wider implementation of the EU Anti-Tax Avoidance Directive (ATAD). The relevant provisions stipulate that corporate taxpayers that move assets or their tax residency out of Cyprus will be subject to tax at an amount equal to the market value of the transferred assets at the time of exit – minus their value for tax purposes – in any of the following circumstances:

• a Cyprus tax-resident company transfers assets from its head office in Cyprus to its PE in another member state or in a third country so that Cyprus does not have the right to tax the transferred assets owing to the transfer;
• a non-Cyprus tax-resident company with a PE in Cyprus transfers assets from its Cyprus PE to its head office or another PE in another member state or third country so that Cyprus does not have the right to tax the transferred assets owing to the transfer;
• a Cyprus tax-resident company transfers its tax residence from Cyprus to another member state or to a third country, apart from those assets that remain effectively connect- ed to a PE in Cyprus; and
• a non-Cyprus tax-resident company with a PE in Cyprus transfers the business carried out by its PE from Cyprus to another member state or to a third country so that Cyprus does not have the right to tax the transferred assets owing to the transfer.

5.5    Formulas Used to Determine Income of Foreign-Owned Local Affiliates

The tax treatment of a foreign-owned local affiliate is the same as that of any other Cyprus company. No separate rules or formulas exist to determine their income. As will be discussed, Cyprus companies are taxed on their worldwide income and any foreign tax incurred is credited against the equivalent Cyprus tax on the foreign income.

5.6    Deductions for Payments by Local Affiliates

The general principle pursuant to the Cyprus Income Tax Law is that for an expense to be allowed as a deduction, it must have been incurred wholly and exclusively for the production of taxable income for the specific taxpayer – something that needs to be supported by the relevant documentation. Therefore, any expenses paid by Cyprus companies on behalf of foreign affiliates will be treated as non-tax-deductible expenses. In addition, the Cyprus tax authorities could assess that a deemed receivable exists in the Cyprus company’s books from the foreign affiliate, represented by the value of the expenses paid on which they will seek to impose and tax deemed interest at market interest rates.

5.7    Constraints on Related-Party Borrowing

Pursuant to Section 33 of the Cyprus Income Tax Law, all transactions between related parties must – for tax purposes – be carried out on an arm’s-length basis (ie, at fair values and on reasonable commercial terms). This is described as the “arm’s-length principle”. More specifically, under the arm’s-length principle, where conditions are made or imposed upon the commercial or financial relations between two businesses that differ from those that would have been made between independent parties, any profits that would have accrued to one of the parties had the two businesses been independent – but have not so accrued – may be included in the profits of that business and taxed accordingly. These provisions also apply to any transactions between related parties. Pursuant to the new transfer pricing rules introduced in 2022 (see 4.4 Transfer Pricing Issues),a transfer pricing study is required for all transactions between related entities in excess of EUR750,000 per category of transaction. The 25% relationship test has been introduced to define the concept of related parties.

6. Key Features of Taxation of Foreign Income of Local Corporations

6.1    Foreign Income of Local Corporations

Local corporations are taxed on their worldwide income. However, any foreign tax incurred is credited against the equivalent Cyprus tax on the foreign income. The tax credit in respect of the foreign tax cannot exceed the equivalent Cyprus tax in any circumstances. Credit is always granted to Cyprus tax residents on foreign tax incurred on foreign income, irrespective of the existence of a DTT.

6.2    Non-deductible Local Expenses

As mentioned in 6.1 Foreign Income of Local Corporations, Cyprus tax-resident companies are taxed on their worldwide taxable income, as Cyprus taxation is based on the management and control of the company and not on the source of the income. If an income is exempt (eg, dividends under conditions, sale or disposal of shares), any direct expenses associated with the specific activity are not allowed for tax purposes. Also, any indirect expenses should be allocated to each activity of the Cyprus company and be part of such activity. If the activity will generate exempt income, then the corresponding allocation of the indirect expenses will not be treated as tax- allowable.

6.3    Taxation on Dividends From Foreign Subsidiaries

Dividends received by Cyprus companies from foreign subsidiaries are not subject to corporation tax in Cyprus. Nevertheless, an exception applies in that dividends received from a foreign company will be subject to corporation tax if paid out from hybrid instruments. Moreover, dividends received by Cyprus tax- resident companies from foreign entities are not subject to SDC, unless the passive dividend rule applies. According to this rule, SDC is applicable if:

• the company distributing the dividend engages directly or indirectly in more than 50% of activities leading to investment income; and
• the foreign tax burden on the income of the paying company is substantially lower (less than 6.25%) than the Cyprus tax

SDC does not apply to dividends received by a Cyprus company from a local company, subject to the four-year non-exemption rule. However, a dividend indirectly paid after four years from the end of the year in which the profits were generated is subject to SDC.

6.4    Use of Intangibles by Non-local Subsidiaries

Intangibles developed by local corporations can be used by non-local subsidiaries in their business, provided that such intangibles are licensed to the non-local subsidiaries on an arm’s-length basis. Withholding taxes apply (10%) if the intangible is used in Cyprus by the non-local subsidiaries.

6.5    Taxation of Income of Non-local Subsidiaries Under Controlled Foreign Corporation-Type Rules

The controlled foreign companies (CFC)  rule is applicable in Cyprus as of 1 January 2019. The application of this rule results in the re-attribution of the income of a low-taxed controlled non-Cyprus subsidiary to its parent company in order to avoid revenue diversion to a jurisdiction with a more favorable tax regime. The CFC rules apply to Cyprus tax-resident companies and non-Cyprus tax-resident companies with a Cyprus PE. A CFC is defined as a low-taxed non-Cyprus tax-resident company or PE in which the:

• Cyprus taxpayer, alone or together with its associated enterprises, holds a direct or indirect interest of more than 50%; and
• the actual corporate tax paid on the profits of the company or PE is lower than 50% of the tax that would be paid in Cyprus.

The non-distributed income of a CFC that results from non-genuine arrangements is added to the taxable income of the Cyprus tax-resident controlling company. The CFC rule is not applicable when the company or the foreign PE has either:

• accounting profits of no more than EUR750,000 and non-trading income of no more than EUR75,000; or
• accounting profits of no more than 10% of its operating costs for the tax period.

In any case, the Cyprus controlling entity can claim credit for any foreign tax imposed on the CFC profits that are included in its tax base.

6.6    Rules Related to the Substance of Non-local Affiliates

No rules related to the substance of non-local affiliates apply in Cyprus.

6.7    Taxation on Gain on the Sale of Shares in Non-local Affiliates

As mentioned in 5.3 Capital Gains of Non-residents, the definition of titles under Cyprus law includes shares, bonds, debentures, founders’ shares and other titles of companies or other legal persons incorporated in Cyprus or abroad (and rights thereon). Therefore, the gains on the sale of shares in non-local affiliates will be exempt from any taxes in Cyprus. 7. Anti-avoidance

7.1    Overarching Anti-avoidance Provisions

A general anti-abuse rule (GAAR) has applied since 1 January 2019 and was introduced as part of the general implementation of the ATAD. This rule provides that non-genuine arrangements – the main purpose of which is to procure a tax advantage – are ignored. Such arrangements are considered to be “non-genuine” as their mere existence does not reflect valid commercial reasons or economic reality.

8. Audit Cycles

8.1    Regular Routine Audit Cycle

Cyprus companies are obliged to submit an annual tax declaration, which is prepared based on audited financial statements. Such financial statements should be audited and signed by a Cyprus-qualified and licensed auditor. Currently, the deadline for the submission of such declaration is 15 months from the end of the relevant tax year. A tax year is the same as a calendar year – namely, for the tax year of 2022, the annual tax declaration must be submitted by 31 March 2024.

9. BEPS

9.1    Recommended Changes The commitment of Cyprus to follow the recommendations of the OECD/G20 Base Erosion and Profit Shifting Project (BEPS) is evident, given that it has already implemented various changes in line with the BEPS Actions. As per BEPS Action 2: Neutralizing the Effects of Hybrid Mismatch Arrangements, Cyprus has introduced hybrid mismatch rules (see 9.6 Proposals for Dealing With Hybrid Instruments for further details). Furthermore, by implementing both the BEPS recommendations and the ATAD, Cyprus has introduced the CFC rule and the ILR. Pursuant to BEPS Action 5: Harmful Tax Practices, Cyprus has abolished the old IP box regime. It has also introduced new rules regarding tax benefits granted towards genuine IP activity, as per the nexus approach. In order to prevent the granting of treaty benefits in inappropriate circumstances, Cyprus has opted for the principal purpose test (see 9.9 Anti-avoidance Rules for more details). Moreover, in light of the BEPS recommendations to prevent artificial avoidance of PE status, Cyprus has transposed all relevant new definitions into its legislation, including definitions of commissionaire and similar arrangements. Cyprus has also introduced transfer pricing rules, legislated country-by-country (CbC) reporting and signed the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (the “Multilateral Instrument”, or MLI). 9.2    Government Attitudes The general attitude of Cyprus is to effectuate the BEPS recommendations by improving transparency but at the same time maintain the competitiveness of the Cyprus tax regime by providing various incentives to Cyprus tax residents (both domiciled and non-domiciled). It is likely that both Pillar 1 (reallocation of profits) and Pillar 2 (global minimum tax) will come into effect in Cyprus. There are already discussions regarding increasing the corporate tax rate to 15% within the framework of a wider tax reform. At the same time, the government intends to provide further incentives to attract inward investment. By way of an example, in October 2021, the government of Cyprus presented an action plan that aims to encourage foreign companies and highly skilled personnel to relocate to Cyprus. The implementation of this new strategy commenced in 2022. In summary, the key reforms announced include the introduction of a digital nomad visa for third- country nationals wishing to live in Cyprus yet work for companies operating from abroad. On 3 March 2022, the Cyprus Council of Ministers increased the ceiling for people to benefit from this digital nomad visa scheme to 500 resident permits. Further key reforms include:

• the provision of tax exemptions to highly skilled foreign employees (see 2.3 Other Special Incentives);
• the provision of incentives for highly skilled foreign employees to apply for naturalization after five years of residence and work in Cyprus; and
• the establishment of a Business Facilitation Unit that will operate as the focal point of contact for:
  • companies with foreign interests wishing to relocate to Cyprus; and
  • businesses operating in specific areas of economic activity (eg, hi-tech or innovation companies, pharmaceutical and shipping companies, and companies operating in the field of bio genetics and biotechnology).

9.3    Profile of International Tax During the winter of 2022–23, there has been an ongoing discussion in relation to the possible tax reform of the Cyprus tax system. The Cyprus Ministry of Finance has recently asked stake- holders for an official consultation. One of the proposed changes is the increase of the corporate tax rate from 12.5% to 15%. This is in line with the international tax discussions. Nevertheless, for the purpose of maintaining the competitiveness of the Cyprus tax regime, the Cyprus government intends to adopt other measures to mitigate and counteract the proposed increase of the corporate tax rate. This is not likely to influence any of the BEPS recommendations, given that Cyprus has introduced numerous changes aiming to incorporate such recommendations in the local tax legislation. 9.4 Competitive Tax Policy Objective Cyprus is viewed as having a competitive tax system that offers a number of incentives and advantages. The benefits of the Cyprus tax regime include:

• an absence of restrictions on foreign share ownership;
• lack of withholding taxes on dividends or interest;
• the sale of shares and other titles is exempt from tax;
• one of the lowest corporate tax rates in the EU;
• a number of tax exemptions for non-Cyprus tax residents (or non-domiciled).

Moreover, in October 2021, the Cyprus government announced an action plan designed to attract foreign companies to operate from – or expand their activities in – the country (see 9.2 Government Attitudes). However, as has been analysed in 9.1 Recommended Changes, Cyprus has shown its commitment to follow the BEPS recommendations and remain OECD-compliant. The implementation of the BEPS recommendations on a local level has so far been balanced against the various advantages provided by the Cyprus tax system. Such implementation has, in fact, contributed to the proper development of the Cyprus tax regime by enhancing transparency. 9.5    Features of the Competitive Tax System As outlined in 9.4 Competitive Tax Policy Objective, Cyprus has a competitive tax system offering various incentives to local and foreign investors. The more vulnerable areas of the Cyprus tax regime (such as the old IP box regime) have been abolished or modernized. Also, a wide reform of the Cyprus tax system is now being discussed – pursuant to which, the corporate tax rate will be revised to 15%. However, at the same time, other applicable taxes (such as SDC) might be reduced or abolished. The aim of the Cyprus government is to promote the creation of substance and transparency while simultaneously providing incentives to foreign business to relocate their headquarters in Cyprus. There are limited approved state aid schemes in Cyprus. However, such schemes cannot be considered constraints on the tax system, given that the majority of them aim to enhance productivity in specific areas (eg, rural tourism and hi-tech and innovative enterprises). 9.6    Proposals for Dealing With Hybrid Instruments As mentioned in 9.1 Recommended Changes, Cyprus has had legislation dealing with hybrid instruments in place since 2016. Specifically, an exception applies in that dividends received from a foreign company will be subject to corporation tax if paid out from hybrid instruments. Furthermore, as of January 2020, hybrid mismatch rules apply that aim to tackle the usual tax effects of hybrid mismatches, including a double deduction or a deduction with no inclusion. These new provisions apply only where there is sufficient connection between the parties. This includes mismatches that arise between:

• a taxpayer and its associated enterprises;
• associated enterprises;
• a head office and a PE;
• two or more PEs of the same entity; and
• mismatches resulting from a structured arrangement involving a taxpayer.

The reverse hybrid entity rule is also effective as of 1 January 2022. 9.7    Territorial Tax Regime Cyprus does not have a territorial tax system. All companies that are tax residents in Cyprus are taxed on income accrued or derived from all sources in Cyprus and abroad. Cyprus always grants credit to Cyprus tax residents on foreign tax suffered on foreign income, irrespective of the existence of a DTT. Effectively, a comparison is made between the Cyprus equivalent tax on the foreign-sourced income and the foreign tax incurred – with credit granted being the lower  of the two. In any case, the ILR was introduced in 2019 as part of the wider implementation of the ATAD. The aim of the ILR is to limit the provision of financing facilities to companies (which are based in high-tax jurisdictions) in low-tax jurisdictions through subsidiaries belonging to the same group. The ILR requires that the excess borrowing cost (EBC) that is greater than 30% of taxable income before EBITDA is not deductible for income tax purposes. As such, it limits the otherwise deductible EBCs to 30% of taxable EBITDA. However, the ECB is deducted up to a deminimis threshold of EUR3 million per fiscal year. Standalone entities (not part of a group) are excluded from the ILR. In any case, grand- fathering has been provided for loans concluded before 17 June 2016. Moreover, a group equity “escape” or “carve- out” is provided. If the Cyprus resident company is part of a consolidated group for financial reporting purposes, the taxpayer may be given the right to fully deduct its EBCs – provided that the ratio of its equity over its total assets is equal to (or even up to 2% lower or higher than) the equivalent ratio of the group. 9.8    Controlled Foreign Corporation Proposals As already mentioned in 9.7 Territorial Tax Regime, Cyprus does not have a territorial tax regime. However, it has implemented the CFC rule, as part of the wider implementation of the ATAD. The CFC rule has been explained in 6.5 Taxation of Income of Non-local Subsidiaries under Controlled Foreign Corporation-Type Rules. This CFC rule applies as from 1 January 2019 to both Cyprus tax resident companies and non- Cyprus tax resident companies having a PE in Cyprus, and results in the re-attribution of the income of a low-taxed controlled non-Cyprus subsidiary to its parent company in order to avoid revenue diversion to a jurisdiction with a more favourable tax regime. 9.9    Anti-avoidance Rules As previously mentioned in 7.1 Overarching Anti-avoidance Provisions, a GAAR is applicable in Cyprus as of 1 January 2019. Also, further to the signing of the MLI, Cyprus has opted for the principal purpose test. Such test is incorporated in the latest double taxation conventions (DTCs) entered into by Cyprus. Specifically, the DTT between Cyprus and the Netherlands signed on 1 June 2021 provides that a benefit under the relevant DTC shall not be granted if it is reasonable to conclude – having regard to all relevant facts and circumstances – that obtaining the benefit was one of the principal purposes of any arrangement or transaction that resulted directly or indirectly in such. The only DTC entered into by Cyprus that includes the limitation of benefits test is the one with the USA. These rules do not have any impact on inbound and outbound investors operating through Cyprus entities, owing to the fact that various incentives and benefits offered by the Cyprus tax system apply irrespective of the existence of any DTC. 9.10     Transfer Pricing Changes New transfer pricing rules were introduced in 2022 and are applicable as of 01 January 2022 (as explained in 4.4 Transfer Pricing Issues). Such rules include the requirement for related parties to maintain documentation files in relation to intra-group transactions. This requirement applies if the value of transactions with related parties are more than EUR750,00 per year per type of activity and if the Cyprus tax- resident entity is the ultimate parent or surrogate parent entity of an MNE group falling under the scope of CbC reporting. Furthermore, the new rules provide the chance to apply for advance pricing arrangements. In general, pursuant to the new transfer pricing legislation, all related-party transactions in excess of EUR750,000 are subject to transfer pricing rules. 9.11     Transparency and Country-by- Country Reporting In general, Cyprus has implemented a number of OECD and BEPS recommendations to promote transparency. As per the BEPS Action 13: Final Report, Cyprus has implemented CbC reporting by amending the applicable tax legislation pursuant to the Assessment and Collection of Taxes Law (Exchange of Information in the context of the Multilateral Competent Authority Agreement for the exchange of Country-by-Country reports) Decree of 2017. Generally, the OECD guidance on the implementation of CbC reporting issued from time to time is used to interpret the Cyprus CbC reporting legislation for the purposes of ensuring a consistent and standard approach to CbC reporting. CbC reporting requirements apply in Cyprus as of 1 January 2016. However, in the event of conflict, the Cyprus CbC reporting legislation takes precedence. 9.12     Taxation of Digital Economy Businesses Cyprus has not implemented any reforms addressing the taxation of digital businesses; however, this matter has been under discussion at EU level. Since March 2018, the EU Commission has proposed the adoption of new rules on the imposition of a digital service tax (DST) in order to tax digital business activities in a fairer and more growth-friendly way between all EU members. The general principle is that profits generated in a territory – even without the businesses’ physical presence there – are to be taxed in the EU member state within which companies engage in such digital activities. There are several thresholds proposed on revenues and what will be taxable where it is envisaged that profit attribution will consider the market values of profits from user data and services connecting users online, as well as other more “traditional” online digital services (such as subscriptions to streaming services). In general, a DST is expected to apply on revenues created from activities where users are an important part of the creation of value. Also, a second proposal affecting indirect taxation is the application of interim tax on certain revenues arising from digital activities that currently elude current/traditional tax frameworks. This is expected to include revenues from selling online advertising space, intermediary activities, and sales of data. Certain EU member states have already implemented the above-mentioned proposals and it is expected that other EU countries will follow. 9.13     Digital Taxation A consultation regarding the adoption of digital taxation in Cyprus was initiated in August 2019, although the DST itself has yet to be adopted.  It is expected that digital taxation in Cyprus will be enacted (along with the introduction of other developments) as part of a much wider tax reform, aimed at further simplifying the taxation of individuals and entities in Cyprus. 9.14     Taxation of Offshore IP As mentioned in 4.1 Withholding Taxes, the payment of royalties to a non-Cyprus tax resident is subject to a maximum 10% withholding tax on the gross amount of such payment if the royalty rights were used in Cyprus. Patrikios Pavlou & Associates LLC is one of the largest law firms in Cyprus, where it is highly recommended for its professional legal services and exceptional client service. With nearly 60 years of experience in the local and international legal market, the firm is renowned for its involvement in some of the largest cross-border transactions, as well as in complex litigation and arbitration matters. The highly qualified team is experienced in offering legal advice in any sphere; however, the firm’s tax department offers advice in establishing and implementing robust tax planning structures and assists with all Cyprus-related tax matters. In association with Pagemark Ltd (a member company of the affiliated Pagecorp Group), Patrikios Pavlou & Associates LLC advises on tax treatment of specific transactions/agreements and the calculation of provisional tax, as well as the preparation and submission of tax forms. The firm’s international profile comprises strong alliances with reputable law firms (particularly in Europe, Russia, Asia and the USA), memberships in various global organisations, and a worldwide loyal clientele.

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Large-Scale Real Estate Developments in Cyprus

15th June 2023 Patrikios Pavlou & Associates LLC is a top-tier full service law firm based in Cyprus with significant expertise in the local and international legal market.

Sanctions relating to vessels

15th June 2023 When advising on sanctions, the lawyer providing the relevant advice should be extra careful to cover all angles of the specific transaction.

Crowdfunding Service Providers – Cyprus update

15th June 2023 As access to funding via traditional routes becomes increasingly challenging and expensive, crowdfunding is gaining notable popularity.

Revised Cyprus Permanent Residence Permit Criteria – Investor Visa

15th June 2023 The Cyprus Minister of Interior has revised, pursuant to the provisions of Regulation 6(2) of the Aliens and Immigration Regulations, the criteria and processes for the issuing of Permanent Residence Permits to individuals investing in Cyprus under the relevant scheme, with effect as from the 2^nd of May 2023.

Project Finance 2023 by International Comparative Legal Guide

15th June 2023 Our partners Stella Strati and Stylianos Trillides have written a comprehensive article on the project finance landscape in Cyprus! 

Tax incentives for relocation to Cyprus – Updated

15th June 2023

As of 26 July 2022, by the enactment of the Income Tax Law (Amending)(No.6), a new tax incentive scheme has been incorporated in the Cyprus Income Tax Law (Law 118(I)/2002 as amended) (the “Law”), in an attempt to attract talented professionals from all over the world, in Cyprus.

Private Client – Lexology Getting The Deal Through – Cyprus

7th March 2023 Stella Strati and Nikoleta Christofidi contribute the Cyprus chapter to GTDT’s Private Client Guide.

Insolvency Litigation – Lexology Getting The Deal Through – Cyprus

7th March 2023 Nasia Papakonstantinou and Yvoni Lambrianou contribute the Cyprus Chapter in LexGTDT’s Insolvency Litigation Guide.

The Complex Commercial Litigation Review

7th March 2023 The 5th Edition of the Complex Commercial Litigation Review is now live.

Crypto Assets Service Providers MiCA is around the corner!

7th March 2023 On the 4th June 2018 the Republic of Cyprus along with 21 other Member States and Norway agreed to sign a Declaration creating a European Blockchain Partnership for the specific purpose of establishing a European Blockchain Services Infrastructure. The ambition and underlying purpose of this European Blockchain Partnership, was to support the delivery of cross-border digital public services, enhance the security and privacy of this sector and (although not expressly stated) to prevent any potential calamities in the financial-blockchain sector.

ICLG Project Finance 2022

11th May 2022 ICLG’s Project Finance 2022 is now available online!

The Real Estate Review 2022

4th April 2022 The 11th edition of The Real Estate Law Review provides an invaluable overview of how key markets across the globe operate and how they react to major world events.

Lending & Taking Security in Cyprus

4th April 2022 A Q&A guide to lending and taking security in Cyprus. The Q&A gives a high level overview of the lending market, forms of security over assets, special purpose vehicles in secured lending, quasi-security, guarantees, and loan agreements. It covers creation and registration requirements for security interests; problem assets over which security is difficult to grant; risk areas for lenders; structuring the priority of debt; debt trading and transfer mechanisms; agent and trust concepts; enforcement of security interests and borrower insolvency; cross-border issues on loans; taxes; and proposals for reform.

Chambers Global Guide to Corporate Tax – Cyprus 2022

28th March 2022 The Corporate Tax 2022 guide covers 46 jurisdictions. The guide provides the latest legal information on types of business entities, special incentives, consolidated tax grouping, individual and corporate tax rates, withholding taxes, tax treaties, transfer pricing, and more.

The Inward Investment and International Taxation Review

14th February 2022 A useful guide to the tax rules in the jurisdictions where clients conduct their businesses. Each chapter aims to provide topical and current insights from leading experts on the tax issues and opportunities in their respective jurisdictions. While specific tax advice is always essential, it is also necessary to have a broad understanding of the nature of the potential issues and advantages.

The Complex Commercial Litigation Law Review

27th December 2021 “Litigation requires an incredible amount of preparation, research and skill.. The purpose of The Complex Commercial Litigation Law Review is to provide an understanding of the different approaches various jurisdictions take to important cross-border issues.

The era of environmentally & socially conscious entities: ESG in Cyprus

2nd December 2021 Today’s world calls for businesses which are not merely entities serving an economic purpose, but conscious beings whose decisions shape the world we live in. The 2021 26th United Nations Climate Change Conference, COP26, gathered together world leaders and delegates who were tasked with, inter alia, producing solutions to reverse climate change. Launched as a movement initiative in the United States, ESG, which stands for Environmental, Social, and Governance (“ESG”) was a focal point of COP26 aiming to provide direction for the corporate world in establishing ESG guidelines.

Project Finance 2022 – Cyprus – LexGTDT

5th November 2021

International Arbitration 2021 – Cyprus – Chambers Practice Guides

5th November 2021

 1. General

 1.1 Prevalence of Arbitration

Arbitration is usually used in Cyprus for construction disputes, shareholder disputes, banking disputes between debtors and co-op institutions, and commercial disputes. Despite the fact that international arbitration has become increasingly popular over the last few years, litigation is clearly the most favoured method of resolving disputes in Cyprus. However, there is a growing trend to resort to arbitration, given the inefficiency of the court system to resolve disputes quickly.

Enforcement of Judgments – Chambers Global Guides

5th November 2021 The new Enforcement of Judgments guide features 29 jurisdictions. The guide provides the latest legal information on the identification of another party’s asset position, the costs and time involved in the enforcement of domestic and foreign judgments, challenges to enforcement, and the process of enforcing arbitral awards.

Alternative Investment Funds – ICLG – 2021

5th November 2021 The new edition of ICLG’s Alternative Investment Funds 2021 covers regulatory frameworks, fund structures, investments, reforms and taxation. Angeliki Epaminonda and Angelos Onisiforou contribute the Cyprus Chapter.

Will the “Black Swan” fly over to Cyprus?

4th November 2021 As widely reported, on 4 October 2021, the Judicial Committee of the Privy Council issued its much anticipated decision in Broad Idea International Limited v. Convoy Collateral [2021] UKPC 24. With its judgement, the Privy Council effectively upheld the Black Swan jurisdiction, which is derived from the BVI judgement in the case Black Swan Investment ISA v Harvest View Ltd (BVIHCV 2009/399) (unreported) 23 March 2010 and is expected to have drastic effects in broadening the traditionally conceived limits of the powers of common law Courts to issue freezing injunctions in aid of international creditors.

BEING A DIGITAL NOMAD IN CYPRUS

4th November 2021 The outspread of the covid-19 pandemic left people worldwide with no other choice but to find ways to adjust to the new normal. While two years ago the concept of being a digital nomad could sound to most of us, more like a concept coming out from a science fiction film, it is not implausible to say that covid-19 has put “flesh on the bones” of this concept. But what does the term “digital nomad” mean?

Family Offices: Current Challenges and Trends

23rd April 2021 The outbreak of the COVID-19 pandemic has affected not only public health and the well being of humanity, but also a number of economies, businesses and industries worldwide. Family offices have not remained unaffected; not only by Coronavirus but also by the ever-shifting global economic environment. New trends that have arisen during the COVID era, including remote working and the demand for greater connectivity, as well as novel strategic and operational risks, are forcing family offices to rethink the way they have been traditionally doing business.

The number of arbitrators and a preliminary award in a multi-party arbitration in Cyprus

23rd April 2021 One of the main issues in the constitution of an arbitral tribunal is the number of arbitrators. Most of the times, either the arbitration agreement itself or the default rule of the national laws or the applicable institutional rules provide the number of arbitrators. Nevertheless, the constitution of the arbitral tribunal became one of the greatest challenges in a recent Cypriot arbitration involving multiple parties because the parties had not expressly agreed on the number of arbitrators.

Litigation and Enforcement in Cyprus: An Overview

23rd April 2021 A Q&A guide to dispute resolution law in Cyprus.

Arbitration Procedures and practice in Cyprus: Overview

3rd March 2021 A Q&A guide to arbitration law and practice in Cyprus.

The Complex Commercial Litigation Review

3rd February 2021 Cyprus is a common law jurisdiction country and its justice system is based on the adversarial model. Most of Cypriot law has been modelled after the English Common Law and Equity, the basic principles of which are directly applied by Cyprus courts, under Section 29 of the Courts of Justice Law.

Lending & Taking Security in Cyprus: overview

3rd February 2021 A Q&A guide to lending and taking security in Cyprus. The Q&A gives a high level overview of the lending market, forms of security over assets, special purpose vehicles in secured lending, quasi-security, guarantees, and loan agreements. It covers creation and registration requirements for security interests; problem assets over which security is difficult to grant; risk areas for lenders; structuring the priority of debt; debt trading and transfer mechanisms; agent and trust concepts; enforcement of security interests and borrower insolvency; cross-border issues on loans; taxes; and proposals for reform. https://uk.practicallaw.thomsonreuters.com/w-008-0390?transitionType=Default&contextData=(sc.Default)&firstPage=true

Depositary Duties in the Alternative Investment Funds Realm

3rd February 2021 One of the key players in the Alternative Investment Fund’s industry sector is the depositary. A depositary is in essence the entity responsible for the safekeeping, cash monitoring and oversight of the AIF’s assets. As the reader may appreciate, this is perhaps the most important service provider of an AIF as it operates as an independent third-party provider specifically appointed to ensure the investor’s protection bearing also the responsibility to verify that the assets of the AIF are invested in accordance with the AIF’s investment policy.

LEx_GTDT Private Client

7th January 2021 Given the international mobility of wealthy individuals and their families, it is vital that they and their local advisers have a resource to guide them through the often significantly different legal frameworks they may face in other jurisdictions in which they choose to live, do business and invest. Stella Strati and Nikoleta Christofidi contribute the Cyprus chapter in the Private Client guide, which seeks to draw together the main issues of importance to a private client in this situation covering: rules in relation to tax, succession, the holding and management of property and immigration.

Chambers Global Guide to International Arbitration 2020

20th October 2020 Chambers & Partners' International Arbitration 2020 practice guide features 47 jurisdictions. Stavros Pavlou, Eleana Christofi, Theodoros Symeonides, and Athina Patsalidou provide expert legal commentary on tribunals, preliminary and interim relief, collection and submission of evidence, confidentiality, types of remedies, class actions, and grounds for appeal and enforcement in Cyprus. Click below to read the Cyprus chapter.

Chambers Global Guide to the Enforcement of Judgments 2020

20th October 2020 The new edition of Chambers’ Global Practice Guide to the Enforcement of Judgments discusses identifying assets, domestic judgments, foreign judgments and arbitral awards in 24 jurisdictions. Eleana Christofi and Theodoros Symeonides contribute the Cyprus chapter and provide expert legal commentary on the key issues and latest developments in the enforcement landscape in Cyprus.

All about Nexus: Link your IP asset to Cyprus

10th September 2020 The Cyprus IP regime gives considerable benefits to IP companies wishing to transfer their offices and personnel in Cyprus. Apart from such tax benefits, other advantages also exist rendering Cyprus an attractive jurisdiction for the establishment of fully-fledged offices. In light of this, Stella Strati provides an overview of the new Cyprus IP regime and the Nexus approach.

Lexology GTDT Project Finance 2021

27th August 2020 The new Project Finance edition in the Getting the Deal Through series provides a comparative guide to the most important issues related to project finance regulation across jurisdictions worldwide.

Covid-19: Legal Reflections on Virtual Closings

2nd July 2020 There is no doubt that Covid-19 represents a new challenge in all sectors of the economy, let alone the legal world. In light of this, the issue of distant or virtual closings in corporate finance transactions is revisited by Elena Georgiou, who provides practical guidelines as to how to structure the closing of a deal around the “virtual” table.

Sponsored crisis management focus: A View From Cyprus – Carrying on in the face of the Covid-19 crisis

4th June 2020 The legal profession has entered into an unprecedented challenging period where old habits and norms have to be questioned. In Cyprus, the system of administration of justice is yet to embrace modern reforms and law firms need to adapt and map out a strategy to survive. In light of this, Stavros Pavlou and Stella Strati provide a practical guide to the golden rules of crisis management, outlining the steps to carry on in the face of the Covid-19 crisis in Cyprus. Click to read the article, published by Legal Business.

Chilidescu v. Gheorghiu: Exercising Jurisdiction over Foreign Defendants

24th May 2020 The aim of this article is to present that jurisdiction of Cyprus Courts cannot be established and Interim Orders cannot be issued against foreign defendants when the basis of the claim is not really connected with Cyprus and there isn’t a sufficient jurisdictional ground in relation to the Cypriot defendants. In doing so, it outlines, briefly, the gateways for exercising jurisdiction over foreign defendants as prescribed by Order 6 of the Civil Procedure Rules and the provisions of the Regulation (EU) 1215/2012 on jurisdiction in civil and commercial matters (Recast Brussels Regulation). It concludes with an analysis of the above-mentioned case.

Potential Implications of the Quarantining to Tax Residency

31st March 2020 Containment of the spread of the COVID-19 pandemic has prudently become a top priority for governments around the world. For this reason, quarantines, lockdowns, self-isolation measures and travel restrictions have been widely and strictly imposed on billions of people. Amidst this new state of affairs, it would be worth considering the potential implications that quarantining could have on an individual’s taxable residency status.

Legal implications of the COVID-19 epidemic on contractual obligations under Cyprus law

31st March 2020 The recent outbreak of COVID-19 epidemic is currently affecting Cyprus, Europe and is becoming an emergency in most other regions of the globe. Naturally the primary focus of any business will be on ensuring the health and wellbeing of their staff. Containment measures, including lockdowns, closures of public services, disruption in travel due to restrictions and cancellations of global events are having unprecedented impact on businesses and the economy affecting global supply chains.

The validity of electronic signatures under Cyprus Law – Covid19

31st March 2020 t is widely expected that the COVID-19 (widely referred to as the coronavirus) epidemic will cause unprecedented disruption to the global economy and inevitably eventually reshape the way we conduct business. It has become evident that whilst the disruption in certain industries is widespread and chaotic, in other industries the effects can be mitigated through the use of technology.

Regulatory Update Alert AIFs and UCITS: New Depositary Safekeeping Rules

31st March 2020

The Alternative Investment Fund Managers Directive (“AIFMD”) has been widely regarded by European regulators and industry players alike, as a very powerful and proficient tool, responsible for the establishment of a coherent and integrated legislative framework amongst Member States in the European Union.

The Inward Investment & International Taxation Review

6th March 2020 Cyprus has a very advantageous environment for inward investment. Different incentives exist, able to encourage non-residents to set up a business in, or invest through, Cyprus. In a nutshell, no restrictions on foreign share ownership exist, there are no withholding taxes on dividends or interest, the sale of shares and other titles is exempt from tax, the corporate tax rate is one of the lowest in the European Union (EU), while non-Cyprus tax residents (or non-domiciled) enjoy a number of tax exemptions. These, and other characteristics of the Cyprus tax system, shall be further analysed below.

Arbitration Procedures and practice in Cyprus: overview

11th February 2020

A Q&A guide to arbitration law and practice in Cyprus.

Litigation and Enforcement in Cyprus: overview

11th February 2020 A Q&A guide to dispute resolution law in Cyprus.

The Complex Commercial Litigation Review

7th January 2020 Our Senior & Managing Partner, Stavros Pavlou, Senior Associates Katerina Philippidou and Andria Antoniou, and Athina Patsalidou, Associate, contribute the exclusive Cyprus chapter in Complex Commercial Litigation Review's 2nd edition, in which expert practitioners from 23 jurisdictions provide their overview on litigation and arbitration of commercial disputes, contract formations and negotiations, fraud, misrepresentations and other claims. Click to read the Cyprus chapter, published by The Law Reviews.

The Guide to Insolvency

7th January 2020 Chambers’ 2020 Insolvency Global Practice Guide provides an overview of the differing legal regimes that apply to business restructurings, reorganisations, rehabilitations, insolvencies and liquidations in 48 jurisdictions. Senior Associates Nasia Papakonstantinou and Christos Ioannou contribute the Cyprus chapter, providing all-important professional insights into current trends and developments in the local market, including a concise and high-level summary of specific debtor and creditor rights and legal alternatives for the restructuring and resolution of financially distressed and insolvent businesses.

ADIT & Blockchain Professionals

23rd September 2019 At Patrikios Pavlou & Associates LLC, we continuously invest in our team’s professional expertise to keep track with the latest developments and ever-growing demands. We are also very proud of our team’s persistent success...

Events 2019

23rd September 2019 This month, our team will be attending highly regarded international conferences...

Cyprus Implements ATAD

21st August 2019 In light of EU Anti-Tax Avoidance Directive (ATAD), the Cyprus House of Representatives on April 5, 2019 voted into law (applicable from January 1, 2019) the partial implementation of legally-anti-abusive measures. These measures include the ‘interest limitation’ rule, the ‘general anti-abuse’ rule, and the ‘controlled foreign companies’ rule. The rest two measures stipulated by the EU ATAD (exit taxes and rules to tackle hybrid mismatches) are expected to be implemented in Cyprus by 2020.

Double Tax Treaty between Cyprus and Kazakhstan

9th July 2019

A DTT between Cyprus and Kazakhstan has been signed and ratified by Cyprus on the 15th of May 2019. The DTT is expected to “enter into force’ as from the 1st of January 2020, provided that the various legal procedures involved are finalized. Kazakhstan currently has the largest and strongest performing economy in Central Asia.

Is “Substance” the current Buzzword?

9th July 2019 It seems that one of the latest buzzwords in the field of international tax planning is “substance”. The term “substance” is frequently used to indicate real/physical presence of legal entities in their country of tax residence, as opposed to the use of the so called “shell” or “conduit” companies for obtaining certain tax, or double tax treaty, benefits.

Licensed Insolvency Practitioners

13th June 2019

Two of our Senior Associates, Mrs Nasia Papakonstantinou and Mr Christos Ioannou, successfully passed their Insolvency Practitioners examinations and are now officially included in the Cyprus Insolvency Service (ISC).

Takeover Law: An overview

4th June 2019 The primary source of legislation relating to public M&A transactions in the Republic of Cyprus is the Law to Make Provision for Public Takeover Bids for the Acquisition of Securities of Companies and Related Matters, Law 41(I)/2009 (“Takeover Law”).

Litigation and enforcement in Cyprus overview

23rd May 2019

A Q&A guide to dispute resolution law in Cyprus, providing a structured overview of the key practical issues concerning dispute resolution, including court procedures; fees and funding; interim remedies (including attachment orders); disclosure; expert evidence; appeals; class actions; enforcement; cross-border issues; the use of ADR; and any reform proposals.

Arbitration Procedures and Practice in Cyprus overview:

18th April 2019

This country-specific Q&A guide provides a structured overview of the key practical issues concerning arbitration in Cyprus, including any mandatory provisions and default rules applicable under local law, confidentiality, local courts' willingness to assist arbitration, enforcement of awards and the available remedies, both final and interim.

Top-Tier Law Firm & Leading Lawyers

18th April 2019

Patrikios Pavlou & Associates LLC is led by exceptional heads of departments who possess great knowledge and expertise. Our firm is a Top Tier Firm in 4 practice areas for the Legal 500...

M&A opportunities in Cyprus post Brexit

28th February 2019

Cyprus has reclaimed its status as a country with a developed and well-trusted economy, having overcome the challenges of recent years with a gross domestic product growth of 3.9% in 2018. There has been a noticeable rise in foreign investments in the local market, with an upswing in mergers, acquisitions and joint ventures. 

Mergers and Reorganizations – An Overview

24th January 2019

Cyprus boasts an attractive merger and reorganisation regime not only locally, but also at an EU level. Mrs Lia Iordanou Theodoulou, our firm's Partner-Head of Corporate Finance, shares an overview of the procedures to carry out a local and a cross-border merger, providing essential legal and tax information.

Supporting local and international charitable organizations

15th January 2019

As one of the leading law firms in Cyprus, we are active promoters and supporters of local economic growth by sponsoring local events, applying environmental-friendly practices, minimizing our ecological impact, and most importantly, by raising money for local charities and non-profit organizations.

The ‘dark’ side of the data room: disclosure dangers in M&A and finance transactions

13th November 2018

Given the corporate environment's ever-changing nature and business needs and the importance of data protection at the EU level, the topic of due diligence in M&A and financial transactions warrants examination. The disclosure, transfer and processing of data raises concerns at several stages of the due diligence process during a transaction and undoubtedly makes things more complicated.

Registered alternative investment funds – an overview

13th November 2018

Cyprus is fast becoming an international fund hub and a well-respected player in both the European and international fund industries.

Cyprus Shipping: casting a long shadow over the International Maritime Industry

13th November 2018

Cyprus's maritime industry has been established as one of the three largest merchant fleets in Europe and one of the largest in the world. Given its attractive environment and fast developments, Cyprus is likely to cast a long shadow over the international shipping sector...

A call for specifying the “Pre-Marketing” concept within the AIFMD

10th October 2018 On the 12th of March 2018, the EU Commission via an explanatory memorandum (“Explanatory Memorandum”), adopted a package of further measures intended to deepen, unify and further integrate the capital markets sector of the 28 EU Member States.

Project Finance 2018

10th October 2018 Mrs Stella Strati, Partner-Corporate Finance, and Mr Stylianos Trillides, Senior Associate, contributed the exclusive Cyprus chapter to the 7th edition of the International Comparative Legal Guide to Project Finance 2018.