Doing business in Cyprus

Commercial focus: what are the primary legal requirements and commercial regulations that general counsels should be well-versed in when establishing and conducting business operations in Cyprus?

Historically, Cyprus has played a unique role as a strategic and administrative centre in the Eastern Mediterranean and the greater Middle East.

The island’s strategic geographic location at the crossroads of Europe, Africa, and Asia, a highly advantageous tax regime, a robust legal framework rooted in common law principles, a workforce renowned for its skill and education, European Union membership, its high-quality communications infrastructure and systems, and enduring political stability, have all contributed in establishing the island as a unique strategic administrative centre in the Eastern Mediterranean, offering distinct advantages to corporate entities wishing to manage their operations and expand in Europe, Middle East and Africa. Furthermore, the long British presence on the island has led to widespread proficiency in the English language among its population.

In establishing companies and conducting business operations in Cyprus, general counsels should, in addition to any laws or regulations which are specific to the industry of the intended business operations, consider the Cyprus companies law (which uses, as its basis, English companies law principles, the aliens and immigration law and regulations, the prevention and suppression of money laundering and terrorist financing laws, data protection law, Cyprus employment and social insurance laws, tax laws and property laws).

Civil matters: in terms of civil law, what are the critical considerations for general counsels to navigate when entering into contracts, managing liabilities, and ensuring compliance with civil regulations in Cyprus?

Cyprus follows a common law based legal system and, as an EU member, also applies EU regulations and directives as part of Cyprus law. The basic principles of English common law and equity directly apply where there is no applicable Cyprus legislation and decisions of Commonwealth Courts, which reflect principles of common law and equity, are applicable in Cyprus. Moreover, the Cyprus courts are bound by the doctrine of precedent, under which the courts regard judicial precedent as a source of law and the decisions of the Supreme Court are binding on all courts.

When entering into contracts, managing liabilities and ensuring compliance with laws and regulations in Cyprus, general counsels should be aware of fundamental principles of contract law, tort law, data protection law (which incorporates the EU general data protection regulation), the unfair contract terms law, sale of goods law, consumer protection law and any other laws specific to the industry of the potential business operations. Cyprus contract and commercial law reflects English common law principles and, therefore, the principles of offer and acceptance, consideration, voidability, performance, agency, guarantee, and bailment are applicable. The same applies with tort law, where principles such as negligence, duty of care, vicarious liability, chain of causation also reflect English common law principles. In addition to relevant EU law provisions, Cyprus law follows the common law principles of private international law.

Administrative compliance: how can general counsels effectively address administrative and regulatory compliance issues, such as licensing, permits, and government approvals, when operating in Cyprus?

Administrative compliance may be achieved through robust policy management which is built on the basis of local laws and regulations with the assistance of specialised local practitioners. At the heart of such policy management there needs to be document policies and procedures, data protection and possibly compliance officers who may either be employed or sub-contracted and a continuous update of policies and procedures to reflect current laws and regulations together with compliance audits.

Commercial disputes: in the context of commercial disputes, what are the available mechanisms and strategies for general counsels to resolve conflicts efficiently, protect their business interests, and maintain a favourable commercial reputation in Cyprus?

Dispute resolution in Cyprus is currently focused on two main pillars, court litigation and arbitration. The newly established Commercial Court will enhance both judicial and practitioners’ specialisation, will streamline procedures and optimise resources and court time. The ability to conduct the court process in the English language will preserve the international element of any dispute. Arbitration continuous to offer an attractive alternative with distinct advantages in particular as to the speed of dispute resolution, confidentiality, choice of law and arbitration procedure rules and the finality and binding nature of arbitration decisions. At the same time mediation, especially in consumer contracts, is becoming a much-preferred option and has the potential to secure and enhance business reputation.

Intellectual property and administrative laws: what steps should general counsels take to safeguard intellectual property rights and ensure compliance with administrative laws, including data protection and privacy regulations, while conducting business activities in Cyprus?

Intellectual property rights may be registered with the Cyprus intellectual property section of the Cyprus Registrar of Companies to establish legal protection and ownership. This includes trademarks, patents, and industrial designs. Intellectual property may also be registered with the EU intellectual property office, so as to ensure uniform protection throughout the EU market. Some of the key elements of the current legislation are: The Trademarks Law Cap.268, EU Regulation on the European Union Trademark 2017/1001, The Industrial Designs and Models Legal Protection Law 4(I)/2002, The Patents Law 16(I)/1998, The Copyright and Related Rights Law 59/1976. Compliance with data protection laws and privacy regulations as well as administrative compliance may be secured with the employment of data protection and compliance officers.