CYPRUS Law and Practice Contributed by: Kyriacos Scordis, Anna Borovska and Constantinos Kazamias, Scordis, Papapetrou & Co LLC
3. Recent Legal Developments 3.1 Significant Court Decisions or Legal Developments Even though there have not been any significant changes or legal developments which have a direct impact on M&A transactions, the following legal devel - opments in Cyprus over the last few years may have an indirect effect on such transactions. • Public access to the register of ultimate beneficial owners (UBOs) was reinstated in 2023 (after its suspension as a result of the decision of the Court of Justice of the European Union (CJEU) in joined cases C-37/20 and C-601/20 on 22 November 2022). In November 2023, the Registrar of Compa - nies announced the implementation of the final ver - sion of the electronic system of the UBO registry, obliging all Cyprus-registered entities to comply in accordance with the Prevention and Suppres - sion of Money Laundering and Terrorist Financing Law of 2021. Pursuant to Directive KDP 423/2024 issued by the Department of Registrar of Compa - nies and Intellectual Property, a further extension for the submission of the UBO registry was granted until 31 January 2025, with 31 March 2025 being the deadline for such information to be confirmed. • With effect as of 2024, Cyprus has abolished the EUR350 annual company levy. This significant move will enhance Cyprus’s appeal as a lead - ing international business destination by lowering operational costs for businesses and fostering economic development. • The Markets in Financial Instruments Directive No II (MiFID II), which was transposed into Cyprus national law in 2018 (introducing new corporate governance requirements in the domestic legisla - tion and regulating trading in a manner leading to greater transparency). • The Markets in Financial Instruments Regulation (MiFIR), which was also transposed into Cyprus national law in 2018 (aligned with MiFID II by intro - ducing obligatory transaction reporting require - ments for monitoring and market abuse purposes, with the overall aim of strengthening investor protection and ensuring safer and fairer markets). • As referred to under 1.2 Key Trends , the recent tax reform constitutes a significant legislative develop -
the date of its termination or expiry or until the entry into force or application of another collective agree - ment for a minimum period of one year. Furthermore, the transfer of an undertaking, business or part of undertakings or business shall not of itself constitute grounds for the dismissal of an employee by any of the contracting parties. If a termination or a dismissal of an employee occurs and the relevant provisions of the aforementioned law are not upheld during a transfer, then employees may seek compensation under the Termination of Employ - ment Law (24/1967), as amended. Each case depends on its own particular characteristics and, therefore, the relevant legislation must be carefully applied to each individual case. 2.6 National Security Review There is no specific legislation to act as a national security review of acquisitions. However, the Preven - tion and Suppression of Money Laundering and Ter - rorist Financing Law (188 (I)/2007), as amended, can be said to be the most relevant legislation encom - passing all transactions whereby money laundering may be involved or any kind of illegal activity and/or terrorist financing. Also, the EU Market Abuse Regu - lation EU 596/2014 is fully applicable in Cyprus and has been implemented in the legislation through the Market Abuse Law. All the authorities acting within the ambit of the afore - mentioned legislation can be said to be caught with a duty of reviewing transactions for national security reasons, such as: • the Unit for Combating Money Laundering; • the Cyprus Police; • the Attorney General’s office; • the Ministry of Justice and Public Order; • the Central Bank of Cyprus; and • all other supervisory authorities of the financial sector.
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