Law 132(I)/2023, which entered into force on 12 December 2023, amends the “Sale of Real Estate (Special Execution) Law” and introduces a mechanism designed to protect the buyer when the property is encumbered with charges such as a mortgage or a deposited contract. It enables the transfer of titles, under certain conditions, even if such encumbrances exist, provided that the buyer fulfills his contractual obligations.

The law's major innovations concentrate on three areas. First, the seller needs to include in the contract a recent search certificate identifying all registrable encumbrances. The certificate must be dated within five working days of signing; otherwise, the seller may face an administrative fine of up to €10,000. Second, the law requires the use of standard declarations (Types A, B, and C), which define the relationship between the buyer, seller, and mortgagor. Third, it regulates the payment of the purchase price into a bank account specified in Type A and grants the Director of the Land Registry the authority to transfer titles once the conditions of the declarations are met.

Type A requires the buyer to deposit a particular sum into the seller's authorized bank account, which obliges the mortgagee to issue a payment certificate (Type B) and release the mortgage. By contrast, under Type C, the buyer proceeds without this protection and assumes greater risk. If the mortgagee fails to comply, the Director may impose a fine of up to €100,000 and still proceed with the transfer.

The legislation does not specify a payment percentage. The generally used 95% represents market practice rather than a legal necessity.

Overall, the reform improves buyer protection and transaction security while placing additional responsibilities on sellers, banks, and lawyers, resulting in a more transparent yet demanding environment for real estate transactions.

Cyprus has introduced the Work/life Balance Law 216(I)/2022, implementing EU Directive 2019/1158 and granting new rights to parents and carers.

While the law enhances employee wellbeing, it also creates new compliance obligations for employers and the businesses that act early do not only avoid penalties but also showcase themselves as attractive, family-friendly workplaces.

Key provisions

The law expands on previous legislation on parental and family leave. Paternity leave now entitles fathers to two consecutive weeks of paid leave, regardless of marital status, with entitlement also applying in cases of stillbirth. Where the mother dies during childbirth or maternity leave, the father may take any remaining leave.

Parental leave grants each parent up to 18 weeks per child, with widowed or single parents entitled to additional weeks. Leave may be taken flexibly, either continuously or in parts of minimum 1 day, subject to employer acknowledgement, while parents may transfer a portion of their entitlement to each other.

Carer’s leave introduces up to five unpaid working days per year to care for a relative or household member with serious medical needs, supported by medical certification.

Force majeure leave provides up to seven unpaid days annually to deal with urgent family matters caused by illness or accident. Unlike the previous framework, these days do not need to be consecutive and are not restricted to dependants.

Finally, the law creates a right to request flexible working arrangements such as remote work or adjusted schedule. This applies to parents of children up to eight years old and employees with caregiving responsibilities, provided they have completed six months of employment. Employers must give written responses to such requests within one month and consider both business needs and employee circumstances.

Why it matters for employers

Non-compliance may lead to fines of up to €7,500, invalid dismissals, or reputational harm. Employers should see this as an opportunity to devise robust policies and family friendly practices so as to enhance recruitment and retention in a competitive talent market.

Next steps for businesses

To comply effectively, companies should review existing contracts, staff manuals and leave policies to ensure they reflect the new rights introduced to by the law. Clear internal procedures for handling flexible work requests must be established, supported by training for managers so they can respond appropriately. Just as importantly, employers should communicate changes to employees in a transparent manner in order to manage expectations and demonstrate commitment to a supportive workplace culture.

Looking ahead

Certain areas, such as refusals of flexible work requests, are likely to generate disputes. Test cases in the coming years will further shape employer obligations and companies that prepare now will be best placed to adapt smoothly to the new environment.

Our employment law team can assist in updating your policies, drafting compliant documentation/ manuals and ensure smooth implementation of the new law.

The Republic of Cyprus (hereinafter "Cyprus") has been the target of many European Countries due to it's allegedly lack of money laundering measures that damage the European Union. Is the reaction of these European Union Countries justified?

Cyprus, even before joining the family of the European Union had in place legislation as well as a body responsible for the supervision of monetary transactions within its jurisdiction.

The relevant legislation as drafted and proposed by the Parliament in 1996 was approved in 1997 as the Prevention and Suppression of Money Laundering Acts Law. Since then numerous amendments were made with the latest coming into force in 2012.

In addition, Cyprus ratified on 30 Nov 2001 the International Convention for the Suppression of the Financing of Terrorism.

The unit for Combating Money Laundering (MOKAS) was established to supervise the provisions of Prevention and Suppression of Money Laundering Activities Law. MOKAS gained the power to investigate any reports for potential money laundering and has therefore been structured and manned with a variety of professionals such as advocates, custom officers, financial analysts, police officers and many others, making MOKAS a powerful tool in the hand of the Attorney General against money laundering in Cyprus.

The adoption of the Prevention and Suppression of Money Laundering Activities Law 2007 has put Cyprus in line with the international conventions of the:

• United Nations Convention Against Illicit Traffic in Narcotic Drugs and Psychotropic Substances (Vienna Convention) 1988,
• Council of Europe Convention on Laundering, Search, Seizure and Confiscation of the Proceeds from Crime 1990,
• Council of Europe Convention on Laundering, Search, Seizure and Confiscation of the Proceeds from Crime and on the Financing of Terrorism 2005,
• Relevant European Union Council Directives,
• EU Council Framework Decisions and the 40+9 Recommendations of the FATF on ML&FT. It participates in the following organizations:
• Moneyval Committee of the Council of Europe,
• EU Committee on the Prevention of Money Laundering and Terrorist Financing,
• Camden Assets Recovery Inter-Agency Network (CARIN),
• FIU Net Task Force, the Asset Recovery Offices Forum and the FIU Platform.

Recent Measures for ASP's

Foreign investors use the services of local lawyers and accountants, who are qualified in implementing investor's corporate structures. It is vital to be in opposition to recognize which transactions may not be genuine in order to report them to MOKAS. Unfortunately, in the last few years a number of unqualified offices made their appearance in Cyprus, providing "corporate services" without having the necessary know-how and with limited knowledge of Cyprus Law. This inevitably caused problems to a number of investors who realized that the administration of their Company was not in line with Cyprus law. The Parliament of Cyprus, in an attempt to maximize the control over the corporate service market, has recently approved and adopted law 196(Ι)/2012 on Regulating Companies Providing Administrative Services and Related Matters (the "Law").

The Law has put the burden on the Cyprus Bar Association and Cyprus Securities and Exchange Commission to supervise those authorized under the Law and those that are already qualified to provide administrative services.

The Law provides for exempt persons, i.e. persons that are allowed to provide administrative services without applying to the Cyprus Bar Association and Cyprus Securities and Exchange Commission. Namely, the the Cyprus Bar Association and Cyprus Securities and Exchange Commission persons are:

1. An advocates or an advocates' limited company (L.L.C.) as defined in the Advocates' Law, 42/1961 as amended and a general or limited partnership whose general partners are either lawyers or a lawyers' limited company regulated by the Cyprus Bar Association, in its capacity as regulatory authority for the Prevention and Suppression of Money Laundering Activities Law;
2. members of the Institute of Certified Public Accountants of Cyprus and a general, limited partnership or a limited liability company whose majority of general partners or shareholders and directors, members of Institute of Certified Public Accountants of Cyprus, in its capacity as regulatory authority for the Prevention and Suppression of Money Laundering Activities Law; and
3. a subsidiary company, either directly or indirectly, of any of the above persons;

It is therefore important that each investor makes sure that his companies in Cyprus are being administered by a licensed ASP company or by one of the exempt persons. It should be noted that persons that are in breach of the Law are subject to heavy fines by the regulatory authorities.

Reports and Incidents of Money Laundering

The Government of Cyprus has recently obtained two reports from Deloitte and Moneyval who they were instructed to review, among others, the Anti-Money Laundering (AML) procedures used by the Banks and service providers as well as the Customer's Due Diligence (CDD).

Both reports have shown that there is room for improvement but under no circumstances gives the right to any EU Country or otherwise to attack Cyprus as the money laundering jurisdiction of Europe.

We have seen in the near past money laundering scandals around the globe, but those countries haven't been "attacked" by the media and or foreign governments as much as they did with Cyprus.

Some examples of proved money laundering are:

• In 2013, Guaranty Trust Bank (UK) has been fined with a fine of £525,000 for inadequate anti-money laundering control in relation to high-risk customer, politically exposed.
• In 2012, HSBC Holdings Plc agreed to pay $1.92 billion in fines to U.S. authorities for not applying the anti-money laundering provision, allowing the institution to be used by Mexican drug lords for money laundering.
• In 2008, Commerzbank was ordered by the Frankfurt civil-court to pay €7.3 million, including confiscation of €6.3 million of profits derived from illegal activity.
• In 2002 what has become known as the "Benex Scandal" which involves allegedly Russian mafia money being moved to the Bank of New York, among others. It has been estimated that $7 to $9 billion was laundered through the Bank of New York accounts.

It should further be noted that a study published by the Tax Justice Network which examined seventy countries found that Germany is one of the biggest havens for tax evasion. It's worth saying that Germany even ranks higher than offshore jurisdictions, such as Cayman Islands, that do not comply with the OECD or EU Regulations and Directives.

In the light of the above mentioned facts each of you can make his own decisions to which countries do really "support" money laundering.

This article explains the options available to non-Cyprus citizens through which they can, by exception, apply for the acquisition of Cypriot citizenship. This scheme is available non-Cypriot non-EU residents who would like to get EU citizenship which will enable them to move around Europe without the need for any kind of visa. Further, having an EU passport makes the issuance of any visa, around the world, much easier to obtain.

The relevant law, provides for six methods through which an applicant may obtain their Cypriot citizenship and at the same time their EU citizenship. This article will only examine four out of six methods - one of them is not an option we would advise our clients to pursue.

WHO ARE ELIGIBLE FOR APPLICATION

• Non-Cypriot citizens who meet one or a combination of the economic criteria A1-A4 listed below, provided the total investment amounts to at least €2 million (instead of €5 million).
• The Investor may apply either personally or through a company/companies in which he/she participates as a shareholder- in proportion to his holding percentage- or through investments done by his/her spouse or jointly with the spouse (a marriage certificate or civil partnership certificate is required).
• A high-ranking senior manager of a company who meets one of the economic criteria A1-A4 listed below, provided that he/she receives such a remuneration that generates for the Republic tax revenues of at least €100,000 over a three year period and provided that this tax has already been paid or prepaid.
• The necessary investments should have been made during the three years preceding the date of the application and must retain the said investments for a period of at least three years as from the date of the naturalization.
• The granted naturalization may be revoked if, upon periodic inspection, it is established that a criterion, term or condition has been breached.

A. CRITERIA

A1. Investment in Real Estate (immovable property), land development and infrastructure projects:

The applicant must have invested or has to invest at least €2 million for the purchase or construction of buildings or for the construction of other land development projects (residential or commercial developments, developments in the tourism sector) or other infrastructure projects exclusively in Cyprus. However, if the land is eligible for construction or is under construction, a business plan needs to be presented to the relevant Authorities for approval. Investment in land that is situated in a building zone of zero development is excluded.

A2. Investment in financial assets of Cypriot companies or Cypriot organizations:

The applicant should have made an investment of at least €2 million by purchasing or by participating in companies or organizations established and operating in the Republic of Cyprus, with proven physical presence and activities. The invested funds shall be used for the financing of specific investment plans exclusively in Cyprus. The companies must employ at least five Cypriot or EU citizens who have been legally residing in Cyprus for a continuous period of at least 5 years. The minimum number of employees increases when more than one applicant invest simultaneously in the same business.

A3. Investment in Alternative Investment Funds (AIFs) or financial assets of Cypriot companies or Cypriot organizations that are licensed by CySec:

The applicant should have bought or will purchase financial assets or units (e.g. bonds, bills and securities) of at least €2 million from alternative investment funds established in the Republic of Cyprus, licensed and supervised by the CySec (Cyprus Securities and Exchange Commission) and whose investments are made exclusively in the Republic of Cyprus. Any other investments which are approved by the Ministry of Finance may qualify for the present investment scheme.

The administrator and the auditor of the Fund is obliged to report to the relevant Ministries on an annual basis that the initial investment amount is in place.

A4. Combination of the aforementioned investments:

Applicants can have a combination of any of the above criteria amounting to at least €2 million. Within this, the applicant may also purchase special government bonds of the Republic of Cyprus of a maximum amount of €500,000.

B. TERMS AND CONDITIONS

1. Clean Criminal Record.
2. Residence in the Republic of Cyprus. In all cases of investment listed (A1-A4), the applicant must possess a permanent privately-owned residence in the Republic of Cyprus, the purchase price of which must be at least €500,000, plus VAT. This condition does not apply if the Applicant has invested in housing schemes under criterion A1 and one of the housing units is worth at least €500,000 plus VAT and is used as the applicant’s permanent residence. In case the purchase value of the permanent residence exceeds the amount of €500,000, the excess amount can be included in the total investment. Parents of the Applicant or other family members may also obtain the Cyprus Citizenship with an additional permanent residence of €500,000.
3. Residence Permit in Cyprus. Required prior to the applicant’s naturalization. The same applies for family members if they apply for naturalization.

C. SUBMISSION OF DOCUMENTS:

The applicant must submit the following documents:

1. Form M127, properly filled.
2. Birth Certificate
3. True Copy of passport
4. Certificate of Clean Criminal Record from the country of origin or residence.
5. Copies of the publication in a daily newspaper, two consecutive posts, of the intention of the applicant to become a Cyprus Citizen.
6. Two passport size photographs
7. Curriculum Vitae
8. Proof of permanent residence in Cyprus:
   (a) Contract of sale
   (b) Title deed or proof of registration with the Department of Lands and Survey
   (c) Proof of payment of the agreed price.
   (d) Copy of the wire transfer to a Cypriot commercial banking institution in the name of the seller or the seller’s company.
   
   
9. For investment in real estate, land development and infrastructure projects:
   a) Contract of sale
   b) Title Deed or Proof of Registration of the Contract with the Department of Lands and Surveys.
   c) Proofs of payment of the agreed purchase price.
   d) Copy of the wire transfer (electronic funds transfer) to a Cypriot commercial banking institution in the name of the seller or the seller’s company.
   e) Investment Plan for the development of the purchased land, if the investment involves the purchase of land under development.
   
   
10. For investment in financial assets of Cypriot companies or Cypriot organizations:
    a) Contract of sale.
    b) Proof of payment of the agreed purchase price.
    c) Certificate of shareholders by the Registrar of Companies.
    d) Copy of the wire transfer to a Cypriot commercial banking institution in the name of the company or organization.
    e) Specific investment plan.
    f) Copies of the employment contracts of the Cypriot or EU citizens employed by the company in which the applicant has invested.
    g) Confirmation from the Social Insurance Department as to the insurable income of the Cypriot or EU citizens employed.
    h) Copy of the Social Insurance Contributions for every Cypriot or EU citizen employee.
    i) Registration Certificate (MEU1) or Permanent Registration Certificate of Union Citizen (MEU3) for employees that are EU citizens.
    
    
11. For Investment in Alternative Investment Funds (AIFs) or Financial Assets of Cypriot companies or Cypriot organizations that are licensed by CySec:
    a) Title and other relevant documents of the financial assets/units purchased.
    b) Copy of the wire transfer to a Cypriot commercial banking institution in the name of the company or the organization.
    c) Specific investment plan.
    d) Confirmation by the CySec.
    
    
12. For Investment in Government bonds:
    a) Proof from the Public Debt Management Office for the purchase of special government bonds.
    b) Copy of the wire transfer into a bank account of the Treasury of the Republic of Cyprus.
    
    
13. A high-ranking senior manager of a company who applies for naturalisation must provide:
    a) Copy of the employment contract
    b) Receipt from the Department of Inland Revenue

SUMMARY OF AMENDMENTS INTRODUCED IN 2016:

• The investment amount has been reduced to €2 million plus €500,000 plus VAT for residential property, for investments A1-A4 (from €3 or €5 million).
• The applicant has to hold a residence permit for a period of at least 6 months before he can apply for Cyprus Citizenship.
• The amount of €5,000 is payable for the Naturalization Certificate issued by the Civil Registry and Migration Department.
• The applicant’s parents are also entitled to apply for Cyprus Citizenship by exception, provided that they own a privately life-time residence of at least €500,000 (plus VAT).
• An additional payment of €2,000 is payable if the investor’s parents apply for Naturalization by Exception.
• The investor and his/her parents, may collectively acquire a privately- owned residence provided that the total value is at least €1.000.000, plus VAT.
• Where the purchase price of the residential property exceeds the amount of €500,000 (excluding VAT), the excess amount can be calculated and included in the whole investment.
• A cap (maximum) has been set on investment in Cyprus Government Bonds.
• The criterion of bank deposits has been abolished.
• The criterion of collective investments has been abolished.
• A combination of all economic criteria is now possible.
• A broader range of investments is now possible, including land for development, AIFs and financial assets (bonds and debentures) of Cyprus companies issued by the CySec.