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Cyprus: Public listed companies in Cyprus


Myranda Chatzimatthaiou

The Cyprus Stock Exchange (CSE) was established by virtue of The Cyprus Stock Exchange Laws and Regulations of 1993 and 1995. The legislation provides the basis for the formation and operation of the CSE and for the development of the securities market in Cyprus. The Cyprus Securities and Exchange Commission (CySec) is the competent authority for the supervision of the CSE's actions. The CSE currently provides a range of services, including the provision of investor services in relation to the Cyprus Depository, the settlement of transactions through specialised systems and the Listing and Trading of Securities. The CSE provides for trading on both the regulated market and the Emerging Companies Market (ECM) which was established in 2009.

For the listing of securities on the regulated market, CySec must firstly approve the prospectus and at the same time, an application must be submitted to the CSE through which the issuer must satisfy the general and special listing requirements of the CSE. Once the securities are listed, the company is able to commence trading. The regulated market is in the process of reducing its segments and by the end of 2014 will have a new structure consisted of the main market, the alternative market, the funds market and the bond market.

The ECM is a new market not regulated by the strict listing rules of the CSE. It imposes no regulations regarding maximum ownership or minimum market capitalisation, and therefore provides scope for a more flexible and innovative business practice. There are no segments in the ECM and only bonds and securities can be traded on it.

For a company to be listed in the ECM it must be legally incorporated and operate as a public company, having the authority to issue securities to the public according to its Memorandum and Articles of Association. It must have a minimum share capital of €26,000; 10 – 12 shareholders (persons or legal entities of any nationality); and a minimum of three directors.

In addition, the company must have two years of audited accounts and only newly incorporated companies can be exempted from this requirement, if they can satisfy the Council that sufficient information will be provided to the investors to assess the value of the company's securities.

Apart from the wide range of services provided by the CSE, Cyprus in general is a favourable jurisdiction for company incorporation. The geo-strategic and financial position of the island and its EU and eurozone membership, along with the fact that its tax regime is one of the most beneficial in the corporate world (with, for example, a low corporate tax rate of 12.5%) render it as one of the top corporate destinations. In addition, capital gains tax is not applicable under Cyprus legislation and no sales tax is imposed on securities transactions. A wide network of double tax treaties also exists between Cyprus and almost 50 other jurisdictions.

Public listed companies, in general, enjoy the benefit of limited scrutiny because of their status of being listed in stock exchanges and in certain cases they can receive exemptions from reporting requirements under local regulations. The majority of anti-money laundering (AML) legislation around the world categorises them as low-risk clients and the due diligence and know-your-client (KYC) requirements for public listed companies are very limited; in some instances they may not even exist.

In addition to these benefits it should be noted that a public company may well be the solution for the controlled foreign company (CFC) rules that will soon be introduced by Russia as a means of countering tax avoidance. The Russian Ministry of Finance is now reviewing the latest version of the De-offshorisation Law and it is expected to be enacted soon. On the version of the draft law now under discussion, public companies are exempted from the Russian CFC rules thus increasing even further the scope of public companies. What is left now is the finalisation of the law and its subsequent introduction to the Russian domestic tax legislation.

As a closing point, the high level of expertise provided by the professionals in Cyprus in the legal, auditing, accounting and taxation sector, along with the low cost, simple and quick procedures of the CSE are also considered among the advantages for listing securities in CSE.

Myranda Chatzimatthaiou ( and Andia Nicolaou (

Eurofast, Cyprus office

Tel: +357 22 699 222


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