Mergers And Acquisitions In Cyprus

The key legislation that regulates mergers and acquisitions in Cyprus is the Corporations Regulation (Cap. 113). In individual, the sections 198-202 include provisions about mergers, reconstruction and amalgamation of corporations, and trade of shares in between two or more firms. Other vital legislations are the Command of Concentration Among Enterprises Regulation (22(I)/ 1999) and the Safeguarding and Security of Workforce Rights in the Celebration of the Transfer of Undertakings, Enterprises or Elements Thereof (104/(I)/2000). The 1st 1 promotes honest level of competition and the next one safeguards employees’ legal rights in the occasion of a transfer of undertakings.


First of all, the providers concerned in the merger or acquisition will have to apply to the Court and then agenda a normal assembly of the shareholders of the two providers. Through the assembly, it is decided if it is essential to set up the liabilities among the shareholders and the collectors. It really should be pointed out that the corporation becoming merged shall be wound up devoid of heading into liquidation and its property must be transferred to the getting organization.

In accordance to the provisions of part 198, the merger or acquisition proceeds beneath the situation that the 3-quarters of company’s management approve the transaction. Then a scheme is drafted and it is presented to the auditors. The moment the scheme is authorised, the providers might file the last petition for acceptance with the Courtroom. Be aware that the petition should be accompanied by a sworn statement of a person director in just about every business. Afterwards, a copy of the settlement have to be submitted to the Registrar of Corporations. Ultimately, the board of administrators of each individual corporation will draft a resolution that will decide the reorganisation system and each individual enterprise will be obliged to adhere to this certain program.

It must be pointed out that concerning community providers, the merger treatment will be the very same other than for minimal alterations in the merger approach which have to comprise:

  • the identify
  • the type of the registered workplace of the companies
  • specifics about the transfer of shares and the volume of dollars
  • details about the allocation of shares
  • the exact date when the new shareholders will have the suitable to revenue


From a tax position of watch, the key reward of mergers and acquisitions is that profits derived by the dividends are exempt from the company tax. In addition, mergers and acquisitions are not topic to VAT in Cyprus. A further considerable gain is that income created from the transfer of immovable attributes for the duration of the merger or acquisition are exempt from the money gain taxation. In addition, regarding the transfer of immovable qualities is not required to pay the transfer fee.

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