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The main piece of legislation governing M&A transactions in the Republic of Cyprus is the M&A Control Act. M&A deals involving major corporations & transfer of substantial financial resources must be reported to the regulator (the CPC) prior to their conclusion.

The prerequisite for obtaining permission for concluding an M&A deal in the Republic of Cyprus is the drafting of a relevant agreement or publication of information on the purchase of a controlling stake in a Cypriotic company in a print media outlet. When it comes to takeovers, a notification containing details of an upcoming transaction must be sent to the regulator. Conducting a transaction (either partially or fully) without getting the regulator’s authorization is punishable by administrative penalties.

As mentioned earlier, parties (either individually or jointly) must send a written notification of a large concentration to the regulator .In all other cases, the responsibility for notifying the regulator lies with a company acquiring control. The filing fee is set at one thousand euros. If conducting an M&A transaction in the Republic of Cyprus requires launching an indepth investigation (Stage II), participants must pay a fee of six thousand euros.

Pre-Merger Stage

Once a notification is sent and a filing fee is paid, the regulator must inform the applicant(s) of whether a transaction has been authorized (normally, within thirty days). If no response is received by the required deadline, it can be extended by 2 more weeks. 

Prior to extending the deadline, the regulator must notify the participants of its intention (normally, within seven days).  

Prior to launching an investigation into an M&A transaction in the Republic of Cyprus, the regulator must notify the participants of its decision (normally, within 120 days after receipt of notification or supplementary information). Conducting a transaction (either partially or fully) without obtaining authorization is punishable by a fine of up to ten percent of the total turnover achieved in the preceding fiscal year.

The regulator may temporarily authorize a transaction if the participants can prove that they will incur substantial financial losses due to the delay in getting permission.

Cyprus: Initiating an M&A Deal

Acquiring a controlling stake in a Cypriotic company requires notifying the regulator (before & after a transaction). A notification must be in Greek & sent together with:

  • copies of transaction-related documents;
  • an application copy;
  • copies of participants’ financial reports, including audited ones;
  • copies of transaction-related reports;
  • copies of studies assessing a transaction (in terms of the competition & markets involved);
  • transaction-related information (nature, volume, structure & participants' turnover);
  • relationships between participants & other enterprises (including shares in the respective markets);
  • analysis of the respective markets.

Failure to provide the said documents is punishable by a fine of up to fifty thousand euros. A fine is also imposed for providing inaccurate or misleading information.

Stages

  • Stage I  
    • preparing & submitting a written notification to the regulator;
    • assessment of a transaction by the regulator; 
    • making a decision by the regulator.
  • Stage II 
    • preparing a report of the findings (within 120 days after receiving a notification), 
    • paying a fee (if an indepth investigation is required);
    • informing participants of a decision made. 

Considering concluding an M&A deal in the Republic of Cyprus? Need advice on M&A regulation in the Republic of Cyprus? Why not contact IQ Decision UK?