A Change For The Better?

In April 2015, the House of Representatives approved a new package of insolvency laws, aimed at streamlining and modernising the existing system and promoting a rescue culture. Reform of the insolvency frame-work forms part of the adjustment programme agreed at the time of the 2013 banking crisis and is essential for the resolution of non-performing debt, which is currently estimated to amount to €27.6 billion, almost 50% of gross loans in the banking sector.

After gaining independence in 1960, Cyprus enjoyed 50 years of uninterrupted prosperity. Insolvencies were few and far between and there was no reason to modernise the mechanisms set out in the Bankruptcy Law and the Companies Law, which were a legacy of British colonial rule and closely resembled the corresponding UK legislation of the mid-20th century. The new package includes amendments to both laws, together with new laws introducing new voluntary arrangement provisions for individuals and licensing