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Cyprus
Chamber of commerce:                            Professional body:
Cyprus Chamber of Commerce                      Cyprus Bar Association
38 Grivas Dighenis Ave/3 Deligiorgis St         Florinis 11, office 101
PO Box 21455                                    1065 Nicosia
1509 Nicosia                                    PO Box 21446
Cyprus                                          1508 Nicosia
Tel:      +357 2 88 98 00                       Cyprus
Fax:      +357 2 66 90 48                       Tel:       +357 22873300
Email: chamber@ccci.org.cy                      Fax:       +357 22873013
Web:      www.ccci.org.cy                       Email: cybar@cytanet.com.cy
                                                Web:       www.cyprusbarassociation.org



Recent legislative developments                domestic law, applies to public takeover bids      the rates have generally been low, the absence
                                               for companies whose registered office is in the     of an upper limit on the stamp duty liability
Elias Neocleous                                Republic of Cyprus and which are admitted          has been seen as a deterrent to using Cyprus
Andreas Neocleous & Co                         to trading on a locally regulated market. Some     for very large transactions such as bond issues.
Limassol                                       of its provisions will also apply to companies     During 2007 the government addressed this
                                               whose registered office is outside Cyprus, pro-     by passing new legislation capping the
The past year has seen significant changes in   vided certain conditions are met.                  amount of stamp duty payable on transac-
Cyprus as the country has continued its inte-      A key feature of the new law is the provi-     tions. The cap applies to transactions in excess
gration into the EU. The most noticeable and   sion of a set of general principles governing      of e8.54 million and limits the stamp duty
fundamental change was the adoption of the     public takeover bids, such as the equal treat-     payable to e17,086 however large the value of
euro as the national currency on January 1     ment and protection of shareholders. In addi-      the contract.
2008, making Cyprus the 14th member of the     tion, the law sets out the procedures to be fol-
Eurozone and further increasing its attractive-lowed before and after the announcement of         Consolidation no longer mandatory for small
ness as an investment destination.             the public takeover bid, the mechanics of a        groups of companies
    In parallel, the government has continued  public takeover bid (such as the way in which      Another law passed in 2007 reduced the
to introduce new laws to align domestic legis- information will be disseminated), restrictions    administrative burden on companies regis-
lation with recent EC Directives. Another leg- on the offeror company after the announce-         tered in Cyprus by relieving small groups of
islative theme has been aimed at maintaining   ment of the bid, and the circumstances under       companies of the requirement to prepare con-
and increasing Cyprus’s competitiveness as an  which the initial public takeover bid can be       solidated financial statements. To qualify for
international financial centre. In the followingrevoked. The law also includes new squeeze-        the “small groups” exemption none of the
paragraphs we summarise important develop-     out and sell-out provisions.                       companies in the group may be a public com-
ments over the past year and highlight new                                                        pany and the group must satisfy at least two of
legislation in the pipeline.                     Migration of companies                           the following three criteria:
                                                 A further amendment to the Cyprus                    (i) aggregate gross assets before deduction
Implementation of Mifid                           Companies Law introduced the necessary           of liabilities do not exceed e14.6 million;
The new Investment Services and Activities provisions for companies to migrate to and                 (ii) aggregate turnover does not exceed
and Regulated Markets Law of 2007, No from Cyprus, placing a limited company on a                 e29.2 million; and
144(1) of 2007, which was passed on October similar footing to a Societas Europaea, which is          (iii) average aggregate number of employ-
25 2007, replaces the Investment Firms Law free to move its registered office between              ees does not exceed 250.
of 2002 with effect from November 1 2007. European member states.                                     The exemption is not available if other leg-
As well as implementing Mifid, it also har-           A company incorporated in Cyprus may         islation to which the group is subject requires
monises domestic law with relevant European now relocate its central management and con-          the production of consolidated financial state-
directives regarding investor compensation trol to another member state, provided the             ments.
schemes; capital adequacy of investment firms country concerned has legislation in place               The law also simplified the accounting
and credit institutions; organisational require- allowing the migration of companies.             requirements applying to intermediate hold-
ments, operating conditions and recordkeep- Conversely, a company incorporated in                 ing companies, by exempting intermediate
ing obligations for investment firms; transac- another member state may migrate to Cyprus          holding companies whose ultimate holding
tion reporting; market transparency; and as long as the legislation of its current domi-          company publishes consolidated financial
admission of financial instruments to trading. cile permits it. In either case the company         statements in line with generally accepted
                                                 remains registered in its country of origin      accounting principles from the obligation to
Implementation of the Takeover Bids              while operating in a different jurisdiction.     prepare consolidated financial statements.
Directive
The new Law on Public Takeovers, which Reduction of stamp duty                    Transparency Requirements Law
transposes the European Takeover Bids Contracts and various other legal documents The Transparency Requirements Law took
Directive (Directive 2004/25/EC) into in Cyprus are subject to stamp duty. While effect on January 1 2008. It transposes into

2009 EDITION                                                                                                                www.iflr1000.com
282   Cyprus | Financial and corporate

      domestic legislation the European Parliament        the former name partner of Cypriot law firm         The deal indicates that international clients
      and Council Directive 2004/109/EC on                Tassos Papadopoulos & Co (now Tassos               are responding to the effects of the EU Cross-
      transparency requirements of listed transfer-       Papadopoulos & Associates). The new gov-           Border Merger Directive, which allows coun-
      able securities, and in part the European           ernment, elected in March 2008, has so far         tries from other EU states to merge with
      Commission Directive 2007/14/EC, which              continued a business-friendly momentum,            Cypriot SEs at no extra tax cost.
      sets out detailed rules for the implementation      which will be aided further with the imple-            Cross-border capital markets transactions
      of certain provisions of Directive                  mentation of European legislation.                 are also keeping the firm busy, and Andreas
      2004/109/EC.                                            Although the local market is limited in        Neocleous & Co is taking on sophisticated
          The Law requires issuers to publish accu-       size, Cyprus has become a portal for Western       multi-jurisdictional deals. In May 2008, the
      rate and concise information about their busi-      investment into larger emerging jurisdictions      firm worked alongside Hogan & Hartson to
      ness performance and their assets, including        including Russia, China, India and the             advise Norilsk Nickel on LionOre’s $5.2 bil-
      annual and half-year financial statements as         Middle East.                                       lion migration to Cyprus. LionOre Mining
      well as quarterly financial reports, and obliges         There is also a growing interest in exploit-   was previously listed on the Toronto, London
      issuers to report on transactions in their secu-    ing possible offshore energy reserves, and         and Botswana stock exchanges.
      rities on an ongoing basis. Significant share-       recent changes to the law regarding stamp              In one headline-making deal, the firm
      holders (those holding 5% or more of voting         duty should make Cyprus more attractive for        advised on MTV Networks International’s
      rights in an issuer) are also obliged to report     large finance issues.                               $360 million sale of its Cyprus holding com-
      their transactions in the issuer’s securities.          The legal market has welcomed corporate        pany (which includes MTV Russia and VH1
                                                          and financial legislation enacted in the past       Russia) to a subsidiary of Russian media
      Further developments                                year, which has eliminated unnecessary             group Prof-Media in November 2007.
      Following the election of a new president and       bureaucratic requirements and made Cyprus a            Peers praise the firm for its work advising
      the appointment of a new government in              more attractive and lower-cost business envi-      Rreef (a subsidiary of Deutsche Bank) on the
      February 2008, detailed legislative priorities      ronment.                                           acquisition of Lanitis Development - Cyprus’s
      have yet to be announced. The new govern-               There are still no foreign law firms operat-    first leveraged buyout. The deal, worth $126
      ment has stressed that it will take special care    ing in Cyprus, meaning lawyers at local firms       million, saw Elias Neocleous acting as legal
      to maintain and increase Cyprus’s attractive-       - many of which have only one or two part-         counsel.
      ness as an international business centre, and       ners - must have expertise in a range of prac-         In other notable work, the firm advised
      future legislation is likely to be geared towards   tice areas.                                        Marfin Popular Bank on a e3 billion MTN
      this objective, as well as to implementing              The exception is Andreas Neocleous &           programme and issue of a e750 million
      European legislation.                               Co, which has two offices in Cyprus alone and       tranche of notes in May 2007. The firm also
                                                          around 100 lawyers in total. These lawyers         acted for the Ashmore Group on the structur-
                                                          can afford to be more specialised, giving their    ing of investments into the telecoms industry
                                                          firm a unique position in the market.               in India by the use of Cyprus SPVs.
                                                                                                                 In another highlight deal, the firm advised
      Financial and corporate                                                                                Horus Capital on the acquisition of shares of
                                                          Andreas Neocleous & Co                             a Cypriot company. The transaction involves
       Recommended firms                                   Andreas Neocleous & Co is the most recog-          advising on the review and the drafting of the
       Tier 1                                             nised and established firm in Cyprus - consis-      loan documents.
       Andreas Neocleous & Co                             tently receiving mandates from businesses              Maria Kyriacou, described by one peer as
                                                          operating in the market. The firm also boasts       an experienced and competent banking
       Tier 2                                             an international network of offices, including      lawyer, assisted Barclays Bank by providing
       Antis Triantafyllides & Sons                       Ukraine, Russia, Hungary, the Czech                due diligence on the acquisition of shares in a
       Chrysses Demetriades & Co                          Republic and Belgium.                              company in Cyprus. Kyriacou joined the team
                                                              Clients have only positive words to say        in January 2007 when the firm merged with
       Tier 3                                             about the firm: “You will find that Andreas          MA Kyriacou Law Firm.
       Chryssafinis & Polyviou                             Neocleous & Co are the best lawyers in
       Dr K Chrysostomides & Co                           Cyprus,” says one.                                 Leading lawyers
       L Papaphilippou & Co                                   On January 1 2008, Andreas Neocleous &         Kyriacos Georgiades
       Montanios & Montanios                              Co became the first Cypriot law firm to incor-       Elias Neocleous
                                                          porate as a limited liability company under
       Tier 4                                             Cyprus’s recently amended Advocate and
       George L Savvides & Co                             Companies Laws. Incorporation will help the        Antis Triantafyllides & Sons
       Georgiades & Pelides                               firm modernise its ownership and manage-            Antis Triantafyllides & Sons is one of the old-
       Tassos Papadopoulos & Associates                   ment structures.                                   est firms in Cyprus and is recognised for its
                                                              In the past year, the firm has acted in a       international clientele in structured finance
      Cyprus adopted the Euro in January 2008 -           string of key transactions. In one standout        and corporate finance transactions. The firm,
      reinforcing its EU integration while also           deal, the firm advised Bergesen Worldwide           based in Nicosia, specialises in corporate and
      opening up the domestic market to continu-          Gas on the restructuring and migration of a        banking work and counts Deutsche Bank,
      ous investment.                                     Societas Europaea (SE) from Denmark to             IBM, AIG, the European Bank for
         Presidential elections followed in February      Cyprus in May 2008. The team, headed by            Reconstruction and Development and
      2008, resulting in victory for Demetris             Elias Neocleous, also advised the client on a      Russia’s Vneshtorgbank as clients.
      Christofias, leader of the leftwing Akel party.      potential $1 billion merger between the                Clients and competitors praise the firm for
      Christofias succeeded Tassos Papadopoulos,           migrated company and a Cypriot company.            the quality of its work. Says one commenta-

      www.iflr1000.com                                                                                                                     2009 EDITION
                                                                                            Financial and corporate | Cyprus                      283


tor: “Stelios Triantafyllides is an excellent           Commentators note that Chryssafinis &            L Papaphilippou & Co counts a number
lawyer. He knows his stuff, is experienced,         Polyviou’s relationship with the Bank of         of regional banks as clients, including
clever and well respected.” On the other hand,      Cyprus is what drives the practice forward.      Eurohypo, Sybil Europe, Alpha Bank, Marfin
some in the market note that while the firm’s        Although Polyviou is known for his expertise     Popular Bank, and the Cyprus Development
reputation as a boutique is excellent, its lack     in banking transactions, he is also noted for    Bank.
of size can be restrictive.                         his work in M&A and competition law. The
    The firm has a well-known capability to          firm has advised corporate clients on share-      Leading lawyers
act in sophisticated cross-border transactions      holder agreements, corporate-governance          Leandros Papaphilippou
in the emerging markets. In May 2007, the           issues, and management and reorganisation
firm acted as local counsel in a $1.5 billion        issues.
acquisition financing of an infrastructure pro-                                                       Other notable firms
ject in Russia. The firm has also been advising      Leading lawyers                                Tassos Papadopoulos & Associates was regis-
banks on loan participation notes and on the        Polis Polyviou                                 tered in May 2007 after the dissolution of
structuring of a $1 billion series of credit-lim-                                                  Tassos Papadopoulos & Co. The firm is the
ited notes.                                                                                        former practice of Tassos Papadopoulos, who
    Antis Triantafyllides & Sons is also capital-   Dr K Chrysostomides & Co                       left the firm to become the Cypriot president
ising on the country’s offshore energy reserves,    Dr K Chrysotomides & Co moves up a tier in 2003.
acting as local counsel for Urals Energy, an        after receiving positive reviews from clients
independent oil company in Russia.                  and peers. “I could not be happier with the
                                                    quality of service they provide; they have the
Leading lawyers                                     business acumen of a first-rate international
Stelios Triantafyllides                             firm,” says one client.
                                                        Dr K Chrysotomides & Co is one of the
                                                    founding members of the Lex Mundi associa-
Chrysses Demetriades & Co                           tion of independent law firms, and is noted
Chryrsses Demetriades & Co has had a strong         for its dedication to seeing deals through to
year advising on some of the highest-value          their conclusion. “They are inclined to bend
deals in the Cypriot market.                        over backwards to make a deal happen by any
    Christos Mavrellis heads the corporate          means necessary,” says one competitor.
department and is well recognised by the mar-           Associate Stelios Hadjilambris joined the
ket. His former ministerial employment has          firm in July 2007 and been acting in corporate
also served him well: since 1994 the firm has        and commercial transactions. In the past year
been retained by a foreign government to            Hadjilambris advised Vostok Gas, through a
advise on the development of an offshore cen-       Cyprus holding company, on the $1.5 billion
tre. “Christos Mavrellis has the ease to talk to    issue of loan notes. Clients are clearly
various government departments,” says a             impressed by Hadjilambris’ work: “I am
rival.                                              happy with his response time,” says one, “and
    Finance partner Demosthenes Mavrellis is        I am comfortable in handing over responsibil-
also an active lawyer of the firm, and this year     ity to him because he delivers.”
advised AFI Development on its $1.4 billion             The team has also been advising an
flotation on the London Stock Exchange.              Austrian telecoms company on the $1.5 bil-
Demosthenes Mavrellis has also been develop-        lion purchase of a mobile network provider
ing the firm’s long-term relationship with the       through a Cyprus holding company. The firm
Central Bank of Cyprus, with the bank               also advised SABMiller in its 99.8% acquisi-
recently appointing him to assist in drafting       tion of CJSC Sarmat through a Cyprus hold-
the Regulation of Trustees, Directors and           ing company, and acted for another client on
Fiduciary Services in Cyprus.                       its listing on the Frankfurt Stock Exchange.

Leading lawyers                                     Leading lawyers
Chris Georghiades                                   Chryso Pitsilli-Dekatris
Christos Mavrellis

                                                    L Papaphilippou & Co
Chryssafinis & Polyviou                              “L Papaphilippou & Co is an old firm but has
Chryssafinis & Polyviou stands out in the            a strong reputation on the domestic market,”
market for its boutique banking practice.           says one market commentator. The firm,
Named partner Polis Polyviou is recognised          established more than 50 years ago by Loukis
for his first-class experience in corporate and      Papaphilippou, has had a lively year. In a one
commercial transactions and his very strong         noteworthy transaction the firm acted as legal
connections with the Bank of Cyprus.                counsel to the seller in Piraeus Bank’s e15
“Polyviou is the best banking lawyer in             million acquisition of the Cypriot branch net-
Cyprus,” says a peer.                               work of Arab Bank in January 2008.


2009 EDITION                                                                                                                  www.iflr1000.com

				
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