Cyprus

With a well-established non-domicile regime and the recent alignment of its immigration rules with the EU Blue Card Directive, Cyprus already stands out as one of the most attractive EU jurisdictions for highly skilled professionals. Furthermore, the February 2025 tax reform proposals, though not yet enacted, signal a commitment to enhancing an already competitive environment, introducing measures aimed at extending non-dom benefits, broadening residency eligibility, and refining personal income taxation. Together, these developments underscore Cyprus’s unique positioning at the intersection of low-tax living and full EU mobility. For tech founders, asset managers, and internationally mobile professionals, Cyprus offers a framework that is both robust today and set to become even more compelling. The upgraded non-dom regime Cyprus’s non-domicile regime, launched in 2016, has become a leading incentive for high-net-worth individuals, international professionals, and entrepreneurs seeking tax efficiency within a European Union jurisdiction. The framework operates under the combined application of the Income Tax Law 118(I)/2002 (IT Law), the Special Defence Contribution Law 117(I)/2002 (SDC Law), and the Wills and Succession Law Cap 195 (W&S Law), all as amended. The 2025 proposed reforms retain the strategic advantage of the rules and introduce certain improvements. The benefits for non-doms remain substantial: exemption from Special Defence Contribution (SDC) on dividends, interest, and foreign rental income no capital gains tax on securities (with the exception of Cyprus-based real estate) no wealth, gift, or inheritance tax income over €100,000 remains eligible for the 50% exemption for 10 years Employment income attractiveness is now being enhanced; the tax-free threshold increases to €20,500. New personal deductions for families, mortgage interest, and green investments provide further tax planning opportunities, especially for those building a life in Cyprus. Moreover, the proposed reforms allow indefinite extension of non-dom status, subject to an annual fee. This replaces the previous 17-year cap, offering long-term fiscal planning security. This evolution of the non-dom regime ensures Cyprus remains a long-term base for wealth preservation and a safe haven in an increasingly competitive EU tax environment. Redefining tax residency rules Cyprus currently offers two main residency routes: the 183-day rule, based on physical presence the 60-day rule, allowing tax residency with a shorter stay if you have economic ties and no other residency Under the 2025 proposals, the 60-day rule is expanded to include individuals whose centre of business interests lies in Cyprus, even if their physical presence is minimal. This change shifts the emphasis toward economic substance over physical relocation; a major win for remote professionals and international entrepreneurs. This makes Cyprus particularly attractive to: digital nomads managing global ventures startup founders looking to anchor operations in an EU jurisdiction executives coordinating group structures from abroad In essence, the redefined rules break the traditional link between tax residency and constant presence, giving entrepreneurs far more flexibility in how they manage their time and tax exposure. To benefit, applicants must still demonstrate business operations or key economic decision-making located in Cyprus, and ongoing compliance with IT and SDC law through filings and declarations. This change modernises Cyprus’s tax framework, aligning it with a global workforce increasingly untethered from fixed locations. EU Blue Card: your mobility pass As of 7 July 2025, Cyprus has implemented the EU Blue Card, aligning its immigration framework with Directive (EU) 2021/1883. This harmonised permit offers third-country nationals a clear route into the EU job market. Combined with the tax advantages Cyprus offers, it’s a compelling package. Eligibility requires: a university degree or three years’ recent experience in a relevant field a binding offer of employment in ICT, pharma R&D, or shipping (excluding seafaring roles) a minimum gross annual salary of €43,632 Benefits of the Blue Card include: the right to live and work in Cyprus equal treatment with nationals in employment, education, and social security family reunification short-term travel within the EU (90 days) mobility to another EU Member State after 12 months of residence in Cyprus This allows skilled professionals to not only secure a favourable tax base but also leverage EU-wide mobility for business or career growth. Combined with the non-dom regime, the Blue Card transforms Cyprus into a regional gateway—one where talent can establish, grow, and scale cross-border ambitions with minimal friction. Strategic outlook for professionals The combination of a more flexible residency framework, an extended non-dom regime, and a fully functional Blue Card system puts Cyprus in a league of its own. Subject to the official adoption of the proposed reform: non-dom status can now be maintained indefinitely with a fee, offering certainty rare in EU tax law residency via economic interest frees professionals from the need to physically relocate new deductions support family life, real estate investment, and green upgrades—aligning tax incentives with personal priorities the corporate tax rate may increase to 15%, but strategic advantages remain via extended loss carryforward (from 5 to 10 years) and continued support for IP Box, Notional Interest Deduction, and Tonnage Tax regimes Whether you’re relocating as a professional or scaling a business through Cyprus-based entities, these changes empower you to structure your affairs with predictability, compliance, and efficiency. Final thoughts & future outlook Cyprus’s 2025 reforms are more than just technical updates—they represent a broader vision for economic competitiveness. By expanding access, rewarding substance, and aligning incentives with modern lifestyles, Cyprus offers a model worth watching. For professionals seeking an EU base without punitive tax consequences, or for businesses aiming to attract and retain top global talent, the updated framework presents an increasingly compelling proposition. The true potential lies in combining available instruments: Blue Card access, non-dom optimisation, and carefully structured long-term planning. With the legal and fiscal tools firmly in place, the jurisdiction enables strategic decision-making that balances compliance, opportunity, and resilience across shifting international environments. For tailored legal guidance on non-dom planning, EU Blue Card applications, or cross-border structuring, contact our team at Chrysses Demetriades & Co LLC.

In a long-anticipated move aligning Cyprus with European Foreign Investment Control standards, the Law on the Establishment of a Framework for Screening Foreign Direct Investments of 2025 [Law 194(I)/2025] has been published in the Official Gazette and will enter into force on 2 April 2026. The new regime introduces a structured screening process for foreign direct investments (FDI), in line with Regulation (EU) 2019/452, targeting transactions that may raise concerns for national security or public order in strategic and sensitive sectors. Under the new framework, non-EU/EEA/Swiss investors and third-country undertakings must notify and obtain prior approval from the Ministry of Finance before completing certain investments in strategic undertakings. The obligation to notify applies where an investment crosses defined legal thresholds, which include both transaction value and the level of control or influence acquired over the target enterprise, whether directly or indirectly. The competent authority may impose conditions, prohibit, unwind, or otherwise restrict transactions deemed to pose a risk to security or public order.  Failure to comply with the notification and approval requirements may lead to financial or other sanctions. For investors, financial institutions and corporates, FDI screening will become a key consideration in transactional planning, particularly in cross-border deals and joint ventures involving sensitive sectors, often in parallel with Merger Control compliance. Early legal assessment will be essential to determine whether a transaction falls within the scope of the framework and to ensure timely compliance with regulatory requirements. For further information or tailored guidance, please contact Polyvios Panayides ([email protected]) at Chrysses Demetriades & Co LLC.  

In February 2025 the Court of Justice of the European Union (CJEU) delivered its decision in Case C-537/23 SIL v. Agora, reshaping how jurisdiction clauses under the Brussels I Recast Regulation are interpreted and enforced. For Cyprus (Europe’s shipping hub and a regional centre for cross-border trade) the ruling has immediate implications. One-way (asymmetric) forum clauses feature routinely in charterparties, bills of lading, supply agreements, distribution deals and finance contracts. After this judgment, these clauses can still deliver commercial flexibility, but only if drafted and invoked with precision. The CJEU Case C-537/23 explained The February 2025 judgment clarified Article 25 of the Brussels I Recast Regulation (EU 1215/2012). The Court examined an asymmetric jurisdiction clause obliging one party to litigate exclusively in Brescia while giving the other a free choice of forum. Key takeaways: Autonomous EU standards prevail. Ambiguity or imbalance is assessed against clarity, predictability and transparency, not national “substantive validity.” Only classic vitiating factors (fraud, duress, mistake, lack of capacity) remain subject to the chosen forum’s national law. The same approach extends to the Lugano Convention (Switzerland, Norway, Iceland), which mirrors Brussels I on jurisdiction and enforcement. For Cypriot companies and shipowners contracting with parties in the EU or Lugano states, well-drafted one-way clauses naming EU or Lugano courts will generally be upheld and judgments recognised, provided the clause is sufficiently clear and does not conflict with Articles 15, 19 or 23 (protected parties) or Article 24 (exclusive jurisdictions). Why the ruling matters for Cyprus shipping and cross-border commerce Shipping contracts Bills of lading and charterparties issued in Limassol may cover cargo from Asia to Europe and designate a foreign court. Under SIL v. Agora, a Cypriot court asked to enforce or disregard such a clause must apply the CJEU’s clarity and foreseeability test. Shipowners, charterers and P&I Clubs often rely on asymmetric clauses to gain flexibility. After SIL v. Agora, these clauses survive only if the “escape” options are objectively defined (port of loading, port of discharge, domicile of counterparty). Vague wording such as “any competent court abroad” risks unenforceability in Cyprus or Lugano states. Commercial contracts The same reasoning applies to supply, distribution and finance agreements. Cypriot exporters may have contracts in several languages naming foreign courts. Asymmetric clauses must now specify objective triggers (domicile, place of performance, delivery points) to be enforceable. Procedural backdrop – Cyprus Civil Procedure Rules Under the CPR, jurisdiction objections must be raised promptly and supported with evidence at an early case-management stage. Missing that window may result in Cyprus hearing the case even where a valid foreign forum clause exists. The Rules do not change Brussels I or Lugano but they reinforce discipline around how and when such clauses are invoked. Bottom line: forum selection is no longer a back-end dispute issue. It must be built into contract negotiation, evidence gathering and early procedural steps from day one. Drafting predictable jurisdiction clauses post-2025 To take full advantage of SIL v. Agora, Cypriot shipowners, cargo interests and businesses engaged in cross-border trade should revisit how they draft and invoke forum clauses: Name EU or Lugano courts explicitly. Specify a Cypriot court (“Admiralty jurisdiction of the District Court of Limassol” or “District Court of Nicosia”) or another EU/Lugano court (“Commercial Court of Oslo”). This maximises Brussels I and Lugano benefits. Define “escape” rights. If using a one-way clause, spell out the objective conditions under which the stronger party may sue elsewhere (port of discharge, domicile of counterparty, place of damage). The more concrete the trigger, the more likely it passes the CJEU’s clarity test. Align procedure with substance. Incorporate the CPR’s pre-action and early-objection requirements into your internal playbook. Even a perfect clause can be undermined by procedural default. Harmonise with other clauses. Check that arbitration, governing law and service provisions in your charterparty, bill of lading or commercial contract are consistent with the jurisdiction clause. Conflicting clauses are a common reason for Cypriot courts to find a forum clause unclear. By combining EU-level clarity with Cyprus-level procedural readiness, companies can secure predictable dispute resolution and faster enforcement of judgments across Europe; a decisive advantage in both time-critical shipping and competitive international commerce. Conclusion Cyprus remains a pivotal gateway for Europe’s maritime and cross-border trade. The CJEU’s 2025 Article 25 judgment has shifted the legal tide: asymmetric jurisdiction clauses are no longer routine boilerplate but strategic tools demanding careful drafting and disciplined procedural handling. For shipowners, P&I Clubs and exporters alike, this creates both opportunity and pressure. Well-structured clauses reduce forum disputes and give all parties clearer visibility of legal risk, but they also impose a higher standard of precision. Weaker counterparties must push for balanced terms, while parties seeking flexibility must articulate their “escape” options in concrete, objective terms. The Cyprus Civil Procedure Rules form the procedural backdrop. They do not rewrite Brussels I or the Lugano Convention but they set the timetable and evidential standards within which jurisdiction issues are litigated before Cypriot courts. By integrating forum selection into corporate governance, risk registers and contract templates, rather than treating it as a last-minute add-on, businesses can enhance compliance, reduce litigation costs and accelerate enforcement outcomes across Europe. This proactive approach strengthens relationships with customers, suppliers and financial partners, signalling that the company is both sophisticated and reliable in its cross-border dealings. Looking ahead, companies that audit their contracts, train teams on procedural deadlines and build coordinated dispute-management strategies will stand out as reliable partners. Our firm combines deep knowledge of EU and Lugano frameworks with decades of hands-on shipping and cross-border dispute resolution experience to help clients move beyond compliance and turn jurisdiction planning into a genuine commercial advantage. For more information please contact Nikoleta Kleovoulou or your usual contact at Chrysses Demetriades & Co LLC.

The House of Representatives has enacted the 2025 Law Amending the Procedures for Review in the Field of Public Procurement Contracts, which introduces substantial changes to the main Law of 2010 (Law 104(I)/2010). Increase of the financial threshold With the amendment of Article 3(d) of the existing provisions, the value threshold of contracts is increased from €500,000 to €1,000,000. According to the explanatory memorandum of the law, this change readjusts the scope of the provisions relating to the jurisdiction of the Tenders Review Authority, aligning it with current economic conditions and the value of contracts awarded in the context of public procurement. New framework for interim measures The second significant amendment is found in Article 24, where a new paragraph (1A) has been added. According to this provision, any applicant requesting an interim measure is required to submit, together with the appeal form, a solemn declaration stating that they will provide a personal guarantee if the request is granted. If the Tenders Review Authority decides to grant an interim measure, the applicant must deposit the guarantee within five working days of the issuance of the decision. The amount of the guarantee is set at 1% of the estimated value of the contract, with a maximum limit of €50,000, and where no estimated value is determined, at €10,000. Failure to deposit the guarantee within the prescribed time limit leads to the automatic cancellation of the interim measure. If the contracting authority’s decision is upheld, the guarantee becomes payable, while failure to pay constitutes a professional misconduct by the issuer of the guarantee. Conversely, when the appeal is upheld or withdrawn, the guarantee is returned within ten working days. According to the explanatory memorandum, this addition aims to ensure the seriousness of requests for interim measures, avoiding the submission of appeals without sufficient legal basis or legitimate interest. However, the intent to discourage tenderers from filing administrative appeals before the Tenders Review Authority is evident, which raises legitimate concerns: proceedings before the Tenders Review Authority are swift. Delays occur only when the award decision is annulled by the Authority. Since annulment means errors occurred during evaluation and award decision-making, discouraging tenderers from challenging awards seems unjustified. On the contrary, appealing to the Administrative Court is particularly time-consuming, yet does not involve comparable financial burdens for the tenderer. Before the Administrative Court, if an interim order is issued prohibiting the signing of the contract (a measure granted very rarely by the Court, whereas it is generally granted by the Tenders Review Authority), the guarantee submitted by the tenderer is not automatically forfeited if the appeal fails. For the public authority to collect the amount of the guarantee, it must prove the damage suffered. Absence of provision for successful appeals Despite stricter requirements being introduced, the amendment does not include a provision for the case of a successful appeal. Specifically, it does not provide for the refund of appeal fees or for the coverage of the applicant’s legal costs where the Tenders Review Authority annuls the contracting authority’s decision. This omission creates a regulatory gap, as there is no provision for the recovery of expenses incurred by a successful appellant while exercising their rights. It also reveals that the legislator’s intent is to favor public authorities conducting tenders and to disadvantage tenderers, whereas the principle of equal treatment of the parties requires respect from the legislator as well. The absence of such a provision differentiates the Cypriot framework from other European legal systems, where similar procedures provide for the possibility of fee reimbursement or cost awards in order to safeguard full and effective legal protection for economic operators. Conclusion According to the explanatory memorandum, the 2025 Amending Law aims to ensure procedural discipline and prevent unfounded or abusive appeals by introducing clear financial obligations for obtaining interim measures. However, the automatic forfeiture of the guarantee in case of an unsuccessful appeal and the lack of provisions for returning fees or costs in successful appeals highlight the need for further balancing of the institutional framework, so that the exercise of the right of appeal remains substantive and effective, in accordance with the principles of EU public procurement law and the principle that compensation is awarded where damage is proven. For  more information, please contact Katia Kakoulli ([email protected]) or your usual contact at Chrysses Demetriades & Co LLC.