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January 23, 2020

CYSEC FINALISES THE INVESTMENT-BASED CROWDFUNDING RULES

The Cyprus Securities and Exchange Commission (the “CySEC”) has issued a Policy Statement setting out its finalised rules for investment-based crowdfunding which will be implemented by the way of a CySEC Directive due to be published in the official Gazette imminently.

Crowdfunding may constitute an alternative method to traditional financing via which small and medium enterprises (“SMEs”) can obtain access to financing through the issuance of transferrable securities such as shares or debt instruments. Any potential investors can access these investment opportunities through an internet-based elect...

January 8, 2020

Setting up an Electronic Money Institution in Cyprus

Licensing and supervision of Electronic Money Institutions

In Cyprus the provision of electronic payment services is regulated by the Provision and Use of Payment Services and Access to Payment Systems Law 31(I)/2018 of 2018 and the Electronic Money Law of 81(I)/2012 (the "Laws") as amended which transposed the EU Directive 2015/2366. The provision of electronic services in Cyprus can be provided by an Electronic Money Institution (the “EMI”) which has been granted an authorisation by the Central Bank of Cyprus (the “CBC”).

Electronic Payment Services:

1. Services enabling cash to be placed on a payment...

November 25, 2019

Amendments to Cyprus Companies Law, CAP 113

Following recent amendments to the Cyprus Companies Law, Cap. 113 (the “Law”), the Registrar of Companies has now introduced new provisions aiming in further modernising the current legislative framework which shall be effective from 18th December 2019 onward.

A. Late Filing Penalties

1. Annual Return

The Registrar of Companies will now impose an administrative fine for the late submission of the annual returns of each Cyprus of (i) €50; plus (ii) an additional charge of €1 for each day of delay for the first 6 months and thereafter €2 for each day of delay, up to a maximum of €500.

Therefore, all companies which...

August 23, 2019

The Cyprus Tonnage Tax System – a useful tool for ship owners, managers and charterers

With the emergence of Cyprus as a leading maritime centre encompassing the full range of shipping related activities coupled with its attractive tax regime, we would like to remind clients of the benefits and importance of the Tonnage Tax System (the “TTS”) which was approved by the European Commission transposed into national legislation by the Merchant Shipping (Fees and Taxing Provisions) Law of 2010 (the “Law 44(I)/2010”). 

Qualifying owners of Cyprus and foreign ships, charterers and ship managers who opted and are accepted to be taxed under the TTS are subject to...

July 5, 2019

Kazakhstan - Cyprus Double Tax Treaty

The double tax treaty between Cyprus and Kazakhstan was signed in Nursultan, Kazakhstan on 15th of May 2019 (the “Treaty”).

The Treaty is based on the OECD Model Tax Convention, a model for countries concluding bilateral tax treaties, aiming in removing tax related barriers to cross border trade and investment by implementing provisions for the avoidance of double taxation on income and capital gains tax.

Main Provisions of the Treaty:

1. Dividend Income

If the ultimate beneficial owner of a company is a company – not a partnership (as defined under Cyprus law), and holds a direct shareholding of at least 10% of the iss...

April 10, 2019

Changes to the Cyprus Citizenship Programme 2019

On the 13th of February 2019, the Council of Ministers of the Republic of Cyprus approved the revised Cyprus Investment Programme (the “CIP”) with the aim to revise and include new due diligence procedures to strengthen the credibility of the CIP taking into account at the same time the concerns raised by the European Union. The new CIP aims to allow foreign high-net worth individuals and their family members to obtain the Cypriot Citizenship within a six month-period.

Changes to the CIP effective from 15th of May 2019:

  • The proposed investors will be required to make a mandatory donation of Euro 75,000...

February 22, 2019

The Cyprus Securities and Exchange Commission (the “CySEC”) has completed a review on the quality of the data which has been reported to Trade Repositories in accordance with Article 9(1) of the European Market Infrastructure Regulation (the “EMIR”). 

Article 9(1) of EMIR states that “Counterparties and CCPs shall ensure that the details of any derivative contract they have concluded and of any modification or termination of the contract are reported to a trade repository registered in accordance with Article 55 or recognised in accordance with Article 77. The details shall be reported no later than the working day following the conclusion, modification...

January 8, 2019

On the 8th of January 2019, the Registrar of Companies, following the opinion of the General Attorney of the Republic of Cyprus, has issued an announcement regarding the Article 90 of Companies Law Cap. 113 (the ‘Cap 113’) in respect of the registration of the charges specified in the Article 90 2(a) with the Registrar of Companies.

The announcement states that the Registrar of Companies will not accept the registration of any charges regarding the pledging of company share certificates, assignment of rights deriving from company shares or any other charge on company share certificates, company shares or rights deriving from shares in companies and any...

December 4, 2018

A. New VAT provisions

The Cyprus House of Representatives passed a Bill which amended Law N.95(i)/2000, imposing Value-Added Tax (VAT) on immovable property to ensure compliance with the EU VAT Directive 2006/112/EC.

1.  Activities regarding the lease of an immovable property for business use:

As per the new provisions, any lease of an immovable property to a taxable person within the scope of exercising a business activity attracts the VAT rate of 19%. However, this rate does not apply to an immovable property which it is used solely for residential purposes. This provision is not applicable to the rental agreements or leases which commenced on or after...

November 2, 2018

On the 2nd of November 2018, the Central Bank of Cyprus (the “CBC”) issued a circular with the purpose of clarifying the definition of “Shell Companies” and how the service providers and banks should classify them. 

The revised definition aims to offer clarity and certainty as to the legal requirements underpinning the shell companies.  

As per CBC circular, the term “shell company/entity” refers to a limited liability Company or any other legal entity that:

  • Has no physical presence or operations; “physical presence” includes employees, office space, etc. The presence of a third person providing merely nominee services including company secretary duti...

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