I GENERAL INTRODUCTION TO THE LEGAL FRAMEWORK FOR M&A
Since Cyprus's accession to the EU, the legislation
regulating M&A activity in Cyprus has been closely aligned with
Europe-wide practices.
Prior to Cyprus's EU membership, the ability of Cyprus
companies to merge was limited to domestic mergers and was governed
by the general provisions of the Company Law on arrangements and
reconstructions. In 2007 Cyprus enacted legislation harmonising its
existing laws with Directive 2005/56 on cross-border mergers of
limited liability companies opening the route for cross-border
mergers between companies incorporated in Cyprus and companies in
the EU.
A cross-border merger may take place by acquisition whereby one
or more limited liability companies are wound up without going into
liquidation and transfer all their assets and liabilities to an
existing company or a newly established company. In exchange, the
shareholders of the acquired company are issued shares and
