Economy Profile Cyprus

Ease of Doing Business in Cyprus

ease of doing business in cyprus

Rankings on Doing Business topics – Cyprus

rankings on doing business topics cyprus

Topic Scores

topic scores cyprus

Starting a Business

This topic measures the number of procedures, time, cost and paid-in minimum capital requirement for a small- to medium-sized limited liability company to start up and formally operate in each economy’s largest business city.

To make the data comparable across 190 economies, Doing Business uses a standardized business that is 100% domestically owned, has start-up capital equivalent to 10 times the income per capita, engages in general industrial or commercial activities and employs between 10 and 50 people one month after the commencement of operations, all of whom are domestic nationals. Starting a Business considers two types of local limited liability companies that are identical in all aspects, except that one company is owned by 5 married women and the other by 5 married men. The ranking of economies on the ease of starting a business is determined by sorting their scores for starting a business. These scores are the simple average of the scores for each of the component indicators.

The most recent round of data collection for the project was completed in May 2019. See the methodology for more information.

What the indicators measure

Procedures to legally start and formally operate a company (number)

  • Preregistration (for example, name verification or reservation, notarization)

  • Registration in the economy’s largest business city

  • Postregistration (for example, social security registration, company seal)

  • Obtaining approval from spouse to start a business or to leave the home to register the company

  • Obtaining any gender specific document for company registration and operation or national identification card

Time required to complete each procedure (calendar days)

  • Does not include time spent gathering information

  • Each procedure starts on a separate day (2 procedures cannot start on the same day)

  • Procedures fully completed online are recorded as ½ day

  • Procedure is considered completed once final document is received

  • No prior contact with officials

Cost required to complete each procedure (% of income per capita)

  • Official costs only, no bribes

  • No professional fees unless services required by law or commonly used in practice

Paid-in minimum capital (% of income per capita)

  • Funds deposited in a bank or with third party before registration or up to 3 months after incorporation

To make the data comparable across economies, several assumptions about the business and the procedures are used. It is assumed that any required information is readily available and that the entrepreneur will pay no bribes.

The business:

-Is a limited liability company (or its legal equivalent). If there is more than one type of limited liability company in the economy, the limited liability form most common among domestic firms is chosen. Information on the most common form is obtained from incorporation lawyers or the statistical office.

-Operates in the economy’s largest business city. For 11 economies the data are also collected for the second largest business city.

-Performs general industrial or commercial activities such as the production or sale to the public of goods or services. The business does not perform foreign trade activities and does not handle products subject to a special tax regime, for example, liquor or tobacco. It is not using heavily polluting production processes.

-Does not qualify for investment incentives or any special benefits.

-Is 100% domestically owned.

-Has five business owners, none of whom is a legal entity. One business owner holds 30% of the company shares, two owners have 20% of shares each, and two owners have 15% of shares each.

-Is managed by one local director.

-Has between 10 and 50 employees one month after the commencement of operations, all of them domestic nationals.

-Has start-up capital of 10 times income per capita.

-Has an estimated turnover of at least 100 times income per capita.

-Leases the commercial plant or offices and is not a proprietor of real estate.

-Has an annual lease for the office space equivalent to one income per capita.

-Is in an office space of approximately 929 square meters (10,000 square feet).

-Has a company deed that is 10 pages long.

The owners:

-Have reached the legal age of majority and are capable of making decisions as an adult. If there is no legal age of majority, they are assumed to be 30 years old.

-Are in good health and have no criminal record.

-Are married, the marriage is monogamous and registered with the authorities.

-Where the answer differs according to the legal system applicable to the woman or man in question (as may be the case in economies where there is legal plurality), the answer used will be the one that applies to the majority of the population.

Starting a Business – Cyprus

starting a business cyprus

Figure – Starting a Business in Cyprus – Score

figure starting a business in cyprus score

Figure – Starting a Business in Cyprus and comparator economies – Ranking and Score

DB 2020 Starting a Business Score

figure starting a business in cyprus and comparator economies ranking and score

Note: The ranking of economies on the ease of starting a business is determined by sorting their scores for starting a business. These scores are the simple average of the scores for each of the component indicators.

Figure – Starting a Business in Cyprus – Procedure, Time and Cost

figure starting a business in cyprus score procedure time and cost

Details – Starting a Business in Cyprus – Procedure, Time and Cost

1 Reserve the company name and get initial approval from the Registrar of Companies

Agency : Registrar of Companies and Official Receiver

A standard form application for approval of name is submitted in person or by mail to the One Stop Shop Cyprus. It can also be submitted electronically to the Registrar of Companies and Official Receiver, through the E-filing website (https://efiling.drcor.mcit.gov.cy).

The cost is EUR 30- which is EUR 10 compulsory and additional EUR 20 for expediting the procedure, which is optional.

1 day EUR 30

2 Prepare the Memorandum and Articles of association by a Lawyer

Agency : Lawyer

The Registrar of Companies has no standard form for the Memorandum and Articles of association. The Companies Law provides a general template applicable for any kind of activities. It is a statutory requirement to have lawyers prepare the Memorandum and Articles of Association, who must also sign the relevant declaration. Since 2016, the Companies Law provides a standard form of Memorandum which includes objects for general purpose companies which facilitates the process of preparing the Memorandum of new companies. As for the Articles, it may be necessary to include tailor-made provisions, to reflect any agreement between the shareholders.

1 day EUR 1,000

3 Register the company at the Registrar of Companies and Official Receiver

Agency : Registrar of Companies and Official Receiver

The following documents can be submitted either by hand or online, certified by a registered advocate/lawyer in the Republic of Cyprus:

  1. Declaration form (ΗΕ1, a affidavit (sworn) statement of the lawyer and signature from the Registrar of the District Court);

  2. Form concerning the registered office address (HE2);

  3. Details regarding the directors and secretary (HE3);

  4. List of persons who consent to act as directors of the public company (HE5, in case of a public company);

  5. Original or scanned copy of Memorandum and Articles of Association (by law must be written by a approved/registered lawyer);

  6. One Stop Shop Application Cover for Legal Entities Registration (applicable for submission to One Stop Shop);

  7. Fee of €105,00, plus €60,00 for filling the accompanied documents, plus an optional €100,00 for accelerated procedure (payable in cash, cheque or bank transfer). Please note that One Stop Shop accepts only applications with acceleration fees and the One Stop Shop Application Cover for Legal Entities Registration is to accompany the above-mentioned application.

Upon completion of the registration the "Certificate of Incorporation" is issued. Upon request, and payment of the amount of €220,00, the following certificates and/or certified copies can be issued:

  1. A certificate of the Shareholders;

  2. A certificate of the Directors and Secretaries;

  3. A certificate of the Registered Office;

  4. A certified true copy of the Memorandum and Articles of Association;

  5. A certified copy of the Certificate of Incorporation.

2 days EUR 205 registration fees

+ EUR 60 for filling accompanied documents + EUR 220 for the Certificates (optional)

4 Register at the Tax Department for Tax and VAT and obtain a Tax Identification Number

Agency : Tax Department

Starting July 1, 2014, the Tax Department was formed which integrated the Inland Revenue Department and the VAT Services.

When registering at the Tax Department the Taxpayer must file in:

  • Form T.D.2001- Registration of a Taxpayer, to obtain a TIN (Tax Identification No). (Form T.D.2001 is available online at www.mof.gov.cy under Forms , Other Forms, Registration of Taxpayer)

  • Form T.D.1101 – only if the taxpayer wants to activate TIN for VAT purposes

The registration at the Tax Department can be done in person or online. Online registration would require an e-signature and is available at http://www.businessincyprus.gov.cy/mcit/psc/psc.nsf/All/749FC411823BDD31C225785600375018

?OpenDocument

1 day no charge

5 Register for Social Contribution at the Ministry of Labor, Welfare and Social Insurance

Agency : Ministry of Labor, Welfare and Social Insurance

Registering for the Social Contribution at the Ministry of Labor can be done online at: www.businessincyprus.gov.cy. where the company should file in the following documents, according with the Social Insurance Law 59.I/2010:

1 day (simultaneous with no charge

previous procedure)

-Form Y.K.A. 1-001 to register as an employer;

-Form Y.K.A. 5-018 to confirm the beginning of employment of each employee;

-Form Y.K.A. 1-021 for the online contributions payment;

-Form Υ.Κ.Α. 1-006 for employers who will use a computerized system to pay their employess;

-Form Y.K.A. 1-005 for employers who request certificate of exemption from the obligation to pay contributions for the Central Holiday Fund and will provide full paid annual leave to their employees;

-Form Y.K.A. 1-003 to declare the recruited employees;

-Form Y.K.A. 1-008 which must be filed if an employee was never registered with the Social Insurance

The original copies of these forms have to be sumbitted at the offices of the Social Insurances. Meanwhile, the payment of the fees can be done online at https://www.pay.sid.mlsi.gov.cy/sisweb3/index.jsp.

Dealing with Construction Permits

This topic tracks the procedures, time and cost to build a warehouse—including obtaining necessary the licenses and permits, submitting all required notifications, requesting and receiving all necessary inspections and obtaining utility connections. In addition, the Dealing with Construction Permits indicator measures the building quality control index, evaluating the quality of building regulations, the strength of quality control and safety mechanisms, liability and insurance regimes, and professional certification requirements. The most recent round of data collection was completed in May 2019. See the methodology for more information

What the indicators measure

Procedures to legally build a warehouse (number)

  • Submitting all relevant documents and obtaining all necessary clearances, licenses, permits and certificates

  • Submitting all required notifications and receiving all necessary inspections

  • Obtaining utility connections for water and sewerage

  • Registering and selling the warehouse after its completion

Time required to complete each procedure (calendar days)

  • Does not include time spent gathering information

  • Each procedure starts on a separate day—though procedures that can be fully completed online are an exception to this rule

  • Procedure is considered completed once final document is received

  • No prior contact with officials

Cost required to complete each procedure (% of income per capita)

  • Official costs only, no bribes

Building quality control index (0-15)

  • Quality of building regulations (0-2)

  • Quality control before construction (0-1)

  • Quality control during construction (0-3)

  • Quality control after construction (0-3)

  • Liability and insurance regimes (0-2)

  • Professional certifications (0-4)

To make the data comparable across economies, several assumptions about the construction company, the warehouse project and the utility connections are used.

The construction company (BuildCo):

  • Is a limited liability company (or its legal equivalent) and operates in the economy’s largest business city. For 11 economies the data are also collected for the second largest business city.

  • Is 100% domestically and privately owned; has five owners, none of whom is a legal entity. Has a licensed architect and a licensed engineer, both registered with the local association of architects or engineers. BuildCo is not assumed to have any other employees who are technical or licensed experts, such as geological or topographical experts.

  • Owns the land on which the warehouse will be built and will sell the warehouse upon its completion.

The warehouse:

  • Will be used for general storage activities, such as storage of books or stationery.

  • Will have two stories, both above ground, with a total constructed area of approximately 1,300.6 square meters (14,000 square feet). Each floor will be 3 meters (9 feet, 10 inches) high and will be located on a land plot of approximately 929 square meters (10,000 square feet) that is 100% owned by BuildCo, and the warehouse is valued at 50 times income per capita.

  • Will have complete architectural and technical plans prepared by a licensed architect. If preparation of the plans requires such steps as obtaining further documentation or getting prior approvals from external agencies, these are counted as procedures.

  • Will take 30 weeks to construct (excluding all delays due to administrative and regulatory requirements).

The water and sewerage connections:

  • Will be 150 meters (492 feet) from the existing water source and sewer tap. If there is no water delivery infrastructure in the economy, a borehole will be dug. If there is no sewerage infrastructure, a septic tank in the smallest size available will be installed or built.

  • Will have an average water use of 662 liters (175 gallons) a day and an average wastewater flow of 568 liters (150 gallons) a day. Will have a peak water use of 1,325 liters (350 gallons) a day and a peak wastewater flow of 1,136 liters (300 gallons) a day.

  • Will have a constant level of water demand and wastewater flow throughout the year; will be 1 inch in diameter for the water connection and 4 inches in diameter for the sewerage connection.

Dealing with Construction Permits – Cyprus

dealing with construction permits cyprus

Figure – Dealing with Construction Permits in Cyprus – Score

figure dealing with construction permits in cyprus score

Figure – Dealing with Construction Permits in Cyprus and comparator economies – Ranking and Score

DB 2020 Dealing with Construction Permits Score

figure dealing with construction permits in cyprus and comparator economies ranking and score

Note: The ranking of economies on the ease of dealing with construction permits is determined by sorting their scores for dealing with construction permits. These scores are the simple average of the scores for each of the component indicators.

Figure – Dealing with Construction Permits in Cyprus – Procedure, Time and Cost

figure dealing with construction permits in cyprus procedure time and cost

* This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure.

Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a different procedure list for men and women, the graph shows the time for women. For more information on methodology, see the Doing Business website (http://doingbusiness.org/en/methodology). For details on the procedures reflected here, see the summary below.

Figure – Dealing with Construction Permits in Cyprus and comparator economies – Measure of Quality

figure dealing with construction permits in cyprus and comparator economies measure of quality

Details – Dealing with Construction Permits in Cyprus – Procedure, Time and Cost

1 Request copy of the site plan

Agency : Department of Lands and Surveys

This document is required in order to prepare the application for the Town Planning Permit.

day EUR 2

2 Apply for the town planning permit at the Town Planning Department

Agency : Town Planning Department

In order to apply for this permit, BuildCo must submit the following information:

  • Land title (must not be older than 6 months, and copy must be submitted)

  • Site plan, which indicates the plot boundaries and access

  • Spatial plan, which indicates the position of the building and any existing buildings or any buildings to be demolished

  • Plans, sections and elevations which show the use of the building, internal dimensions, the type of construction, and accessibility provisions

  • Relevant application form

  • Copy of architect's valid membership in Cyprus Technical Chamber

  • Photos of the site

    90 days EUR 4,125

3 Apply for building permit at the Municipality of Nicosia

Agency : Municipality of Nicosia

The application should be accompanied by the following documents:

  • Original and recent two sets of architectural plans signed by the owner of the immovable property and the responsible architect/civil engineer;

  • Original and recent two sets of topographical plans signed by the responsible architect/civil engineer;

  • Original and recent title of deeds or bank certificate regarding mortgaged property;

  • Original town planning permit as issued by the Town Planning Department;

  • Original and recent certificate of incorporation of company (for legal entity);

  • Original and recent certificate of registered office address (for legal entity);

  • Original and recent certificate of directors and secretary for legal entity);

  • Original and recent certificate of shareholders for legal entity);

  • Original and recent certified copy of memorandum and articles of association (for legal entity);

  • Original and recent proxy statement for the company's representative (for legal entity);

  • Declaration of the responsible architect/civil engineer;

  • Certificate by the Cyprus Scientific and Technical Chamber regarding the architectural works, civil engineering works, and authorization of responsibility;

  • Application fee (by cash or check) depending on the type of development (see Regulation 62 of the Streets and Buildings Regulation);

  • Three extra sets of architectural drawings, one extra set of sewerage drawings and one extra set of plans and sections (to be sent to the Fire Department, Sewerage Department and Electricity Authority to receive their consent).

The Municipality will share the application with several local agencies for clearance and approval (telecom, sewerage, public works, archaeological department and fire brigade).

100 days EUR 3,983

4 Apply for final approval and final inspection

Agency : Municipality of Nicosia

75 days EUR 199

5 Receive final inspection and obtain certificate of final approval

Agency : Municipality of Nicosia

Staff from the Municipality will visit the construction. During the inspection they will verify if the construction was completed in compliance with the original construction plan. Inspectors will also verify if the building is in compliance with security regulations. The certificate of final approval is issued after the final inspection and is necessary for the registration of the new building (update of the land title).

Details – Dealing with Construction Permits in Cyprus – Measure of Quality

details dealing with construction permits in cyprus measure of quality

Getting Electricity

This topic measures the procedures, time and cost required for a business to obtain a permanent electricity connection for a newly constructed warehouse. Additionally, the reliability of supply and transparency of tariffs index measures reliability of supply, transparency of tariffs and the price of electricity. The most recent round of data collection for the project was completed in May 2019. See the methodology for more information.

What the indicators measure

Procedures to obtain an electricity connection (number)

  • Submitting all relevant documents and obtaining all necessary clearances and permits

  • Completing all required notifications and receiving all necessary inspections

  • Obtaining external installation works and possibly purchasing material for these works

  • Concluding any necessary supply contract and obtaining final supply

Time required to complete each procedure (calendar days)

  • Is at least 1 calendar day

  • Each procedure starts on a separate day

  • Does not include time spent gathering information

  • Reflects the time spent in practice, with little follow-up and no prior contact with officials

Cost required to complete each procedure (% of income per capita)

  • Official costs only, no bribes

  • Value added tax excluded

The reliability of supply and transparency of tariffs index (0-8)

  • Duration and frequency of power outages (0–3)

  • Tools to monitor power outages (0–1)

  • Tools to restore power supply (0–1)

  • Regulatory monitoring of utilities’ performance (0–1)

  • Financial deterrents limiting outages (0–1)

  • Transparency and accessibility of tariffs (0–1)

To make the data comparable across economies, several assumptions about the warehouse, the electricity connection and the monthly consumption are used.

The warehouse:

  • Is owned by a local entrepreneur and is used for storage of goods.

  • Is located in the economy’s largest business city. For 11 economies the data are also collected for the second largest business city.

  • Is located in an area where similar warehouses are typically located and is in an area with no physical constraints. For example, the property is not near a railway.

  • Is a new construction and is being connected to electricity for the first time.

  • Has two stories with a total surface area of approximately 1,300.6 square meters (14,000 square feet). The plot of land on which it is built is 929 square meters (10,000 square feet).

The electricity connection:

  • Is a permanent one with a three-phase, four-wire Y connection with a subscribed capacity of 140- kilo-volt-ampere (kVA) with a power factor of 1, when 1 kVA = 1 kilowatt (kW).

  • Has a length of 150 meters. The connection is to either the low- or medium-voltage distribution network and is either overhead or underground, whichever is more common in the area where the warehouse is located and requires works that involve the crossing of a 10-meter road (such as by excavation or overhead lines) but are all carried out on public land. There is no crossing of other owners’ private property because the warehouse has access to a road.

  • Does not require work to install the internal wiring of the warehouse. This has already been completed up to and including the customer’s service panel or switchboard and the meter base.

The monthly consumption:

  • It is assumed that the warehouse operates 30 days a month from 9:00 a.m. to 5:00 p.m. (8 hours a day), with equipment utilized at 80% of capacity on average and that there are no electricity cuts (assumed for simplicity reasons) and the monthly energy consumption is 26,880 kilowatt-hours (kWh); hourly consumption is 112 kWh.

  • If multiple electricity suppliers exist, the warehouse is served by the cheapest supplier.

  • Tariffs effective in January of the current year are used for calculation of the price of electricity for the warehouse. Although January has 31 days, for calculation purposes only 30 days are used.

Price of electricity (cents per kilowatt-hour)*

*Note: Doing Business measures the price of electricity, but it is not included in the ease of doing business score nor in the ranking on the ease of getting electricity.

figure getting electricity in cyprus procedure time and cost figure getting electricity in cyprus and comparator economies measure of quality

Getting Electricity – Cyprus

getting electricity cyprus

Figure – Getting Electricity in Cyprus – Score

figure getting electricity in cyprus score

Figure – Getting Electricity in Cyprus and comparator economies – Ranking and Score

DB 2020 Getting Electricity Score

figure getting electricity in cyprus and comparator economies ranking and score

Note: The ranking of economies on the ease of getting electricity is determined by sorting their scores for getting electricity. These scores are the simple average of the scores for all the component indicators except the price of electricity.

Figure – Getting Electricity in Cyprus – Procedure, Time and Cost

figure getting electricity in cyprus procedure time and cost

* This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure.

Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a different procedure list for men and women, the graph shows the time for women. For more information on methodology, see the Doing Business website (http://doingbusiness.org/en/methodology). For details on the procedures

Figure – Getting Electricity in Cyprus and comparator economies – Measure of Quality

figure getting electricity in cyprus and comparator economies measure of quality

Details – Getting Electricity in Cyprus – Procedure, Time and Cost

1 Submit application for electricity connection and await estimate

Agency : Electric Authority of Cyprus

The customer can apply either in person (at any customer service location) or by email. The forms for the application are available on-line. Most of the applicants download the form on-line and apply in person since they can get a follow-up number. In the application, the customer needs to provide contact information, description of the location of the premise (land plot number), and provide a copy of the title deed or lease agreement. The customer will also need to explain the load requirements and justify the need for the requested load. Finally, they have to provide an expected time of connection. Usually, the customer applies for the connection just before starting the construction of the building since the process can take some time.

29 calendar days EUR 27,000

2 Await external inspection by Electric Authority of Cyprus

Agency : Electric Authority of Cyprus

An inspector from the Electric Authority of Cyprus visits the premises to assess the connection costs and prepare an estimate. Someone from the applicant’s party is usually present during the inspection. After the external inspection by the utility, the inspector will prepare the “quotation of terms” (estimate).

Before sharing the estimate cost with the customer, the Electric Authority of Cyprus submits the application for clearance and approval to several government authorities including: telecom, sewerage, public works, municipality, archaeological department and fire brigade. At this point the utility also obtains an excavation permit. After all these clearances are received, the utility will notify the client and provide him with the estimate.

The estimate of the connection fees can be paid at any customer service of the utility.

21 calendar days EUR 0

3 Await completion of external works, meter installation and final connection

Agency : Electric Authority of Cyprus

After the estimate is issued – and before the actual connection works can start – the Electric Authority of Cyprus arranges/prepares for the works. After the preparation and arrangement stage is over the Electric Authority of Cyprus completes the external connection works.

60 calendar days EUR 0

4 Sign supply contract with Electric Authority of Cyprus

Agency : Electric Authority of Cyprus

5 Request and receive inspection of internal wiring and external works

Agency : Electric Authority of Cyprus

An applicant can request an internal wiring inspection at any customer service of the utility.

26 calendar days

EUR 0

Inspectors from the utility evaluate compliance of the internal wiring with safety regulations. After the inspection, the inspector issues a certificate of compliance. During the inspection, the certified in-house electrician should be present. Typically, insurance companies in Cyprus will ask for a copy of this certificate before insuring any building.

The electrician who did the internal wiring submits a signed notification to the utility upon completion in which they guarantee it has been carried out according to the regulations. During the inspection the utility also tests the external installation. The meter is installed at this point.

The customer can schedule to sign the contract for electricity supply just before electricity is turned on. He/she needs to give 1 week notice and the contract is signed in 1 day.

1 calendar day EUR 76.12

Details – Getting Electricity in Cyprus – Measure of Quality

details getting electricity in cyprus measure of quality

Note:

If the duration and frequency of outages is 100 or less, the economy is eligible to score on the Reliability of supply and transparency of tariff index. If the duration and frequency of outages is not available, or is over 100, the economy is not eligible to score on the index.

If the minimum outage time considered for SAIDI/SAIFI is over 5 minutes, the economy is not eligible to score on the index.

Registering Property

This topic examines the steps, time and cost involved in registering property, assuming a standardized case of an entrepreneur who wants to purchase land and a building that is already registered and free of title dispute. In addition, the topic also measures the quality of the land administration system in each economy. The quality of land administration index has five dimensions: reliability of infrastructure, transparency of information, geographic coverage, land dispute resolution, and equal access to property rights. The most recent round of data collection for the project was completed in May 2019. See the methodology for more information.

What the indicators measure

Procedures to legally transfer title on immovable property (number)

  • Preregistration procedures (for example, checking for liens, notarizing sales agreement, paying property transfer taxes)

  • Registration procedures in the economy's largest business city.

  • Postregistration procedures (for example, filling title with municipality)

Time required to complete each procedure (calendar days)

  • Does not include time spent gathering information

  • Each procedure starts on a separate day – though procedures that can be fully completed online are an exception to this rule

  • Procedure is considered completed once final document is received

  • No prior contact with officials

Cost required to complete each procedure (% of property value)

  • Official costs only (such as administrative fees, duties and taxes).

  • Value Added Tax, Capital Gains Tax and illicit payments are excluded

Quality of land administration index (0-30)

  • Reliability of infrastructure index (0-8)

  • Transparency of information index (0–6)

  • Geographic coverage index (0–8)

  • Land dispute resolution index (0–8)

  • Equal access to property rights index (-2–0)

To make the data comparable across economies, several assumptions about the parties to the transaction, the property and the procedures are used.

The parties (buyer and seller):

  • Are limited liability companies (or the legal equivalent).

  • Are located in the periurban (that is, on the outskirts of the city but still within its official limits) area of the economy’s largest business city. For 11 economies the data are also collected for the second largest business city.

  • Are 100% domestically and privately owned.

  • Perform general commercial activities.

The property (fully owned by the seller):

  • Has a value of 50 times income per capita, which equals the sale price.

  • Is fully owned by the seller.

  • Has no mortgages attached and has been under the same ownership for the past 10 years.

  • Is registered in the land registry or cadastre, or both, and is free of title disputes.

  • Is located in a periurban commercial zone (that is, on the outskirts of the city but still within its official limits), and no rezoning is required.

  • Consists of land and a building. The land area is 557.4 square meters (6,000 square feet). A two- story warehouse of 929 square meters (10,000 square feet) is located on the land. The warehouse is 10 years old, is in good condition, has no heating system and complies with all safety standards, building codes and legal requirements. The property, consisting of land and building, will be transferred in its entirety.

  • Will not be subject to renovations or additional construction following the purchase.

  • Has no trees, natural water sources, natural reserves or historical monuments of any kind.

  • Will not be used for special purposes, and no special permits, such as for residential use, industrial plants, waste storage or certain types of agricultural activities, are required.

  • Has no occupants, and no other party holds a legal interest in it.

Registering Property – Cyprus

registering property cyprus

Figure – Registering Property in Cyprus – Score

figure registering property in cyprus score

Figure – Registering Property in Cyprus and comparator economies – Ranking and Score

DB 2020 Registering Property Score

figure registering property in cyprus and comparator economies ranking and score

Note: The ranking of economies on the ease of registering property is determined by sorting their scores for registering property. These scores are the simple average of the scores for each of the component indicators.

Figure – Registering Property in Cyprus – Procedure, Time and Cost

figure registering property in cyprus procedure time and cost

* This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure.

Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a different procedure list for men and women, the graph shows the time for women. For more information on methodology, see the Doing Business website (http://doingbusiness.org/en/methodology). For details on the procedures reflected here, see the summary below.

Figure – Registering Property in Cyprus and comparator economies – Measure of Quality

figure registering property in cyprus and comparator economies measure of quality

Details – Registering Property in Cyprus – Procedure, Time and Cost

1 Search the property titles and check for encumbrances

Agency : Department of Lands and Surveys

While this procedure is not required by law, it is common practice to perform due diligence before entering into this type of transaction. To request this information, the buyer requires an authorization of the Seller. In practice the seller goes with the buyer to the Department of Lands and Surveys and requests the information on encumbrances on the property for the buyer.

day EUR 50; (EUR 20 is paid for the property title search

+ EUR 30 is paid for the search of any encumbrances (i.e. mortgages, memos, etc.) on a specific property)

2 Lawyer drafts the sale agreement

Agency : Lawyer

In order to prepare the sale agreement, the lawyer requires the following information: names of the parties, amount of transaction, object, bank loan information (if any), resolution of the assembly of shareholders and/or of the board of directors approving the transaction (in case of companies), any power of attorney granted to the representatives of the seller or the buyer, the memorandum and articles of association of the buyer and the seller, a certificate of directors and secretary of the buyer and the seller, a certificate of shareholders of the buyer and the seller and the certificate of registered address of the buyer and the seller. It is important to point out that the use of a lawyer is not required by law.

The documents below are required by the lawyer when preparing the sale contracts:

(1) Notarized Power of Attorney of the Company representatives

(2) Notarized Minutes of the board of Directors (3)Memorandum & Articles of Association of the Board

(4) Certificate from the Registrar of Companies as to the Directors Secretary Shareholders (for Private Companies) and the registered address

2 days EUR 750; (EUR 500-1000)

3 File the contract at the Department of Lands and Surveys

Agency : Nicosia District Lands Office

The deposition of the contract of sale with the Department of Lands and Surveys is mandatory under The Contract Law, Cap.149 as amended (Law no.99(I)/2013) and applies to all sales contracts that are signed from the date of the entering into force of the law, 9th of September 2013 and onward. Furthermore, in pursuance with the Law No. 81 (I)/2011, the buyer is given 6 months from the date of signing the contract of sale to deposit it to the District Land Office of the district where the property is situated.

The objective of this reform is to protect the parties’ interests, especially the buyer's in case of violation of the agreement. The deposit of contract serves the following objectives:

  1. It prevents the seller from selling the same property twice.

  2. If the seller does not perform his obligations ( i.e. he does not come to the land registry to transfer the property), the buyer can apply to the court which issues a decision requiring the Department of Lands and Surveys to transfer the property to the absence of the seller – what is called "specific performance" of the contract ( i.e. if the seller refuses or fails to comply with his contractual obligations).

    1 day EUR 50

4 Pay transfer Taxes

Agency : Tax Department

To transfer a title, a certification that all taxes have been paid is needed from the Tax Department. The Tax Department provides receipts for the proof of payment of (1) Stamp Duty (the Director of which is also the Stamp duty Commissioner): Stamp duty is paid based on the purchase price; and (2) Capital Gains Tax: The sale contract is filed for assessment of capital gains at the Tax Department. The market value of the property is determined by the Director of the Department of Lands & Surveys. CGT is imposed at 20% on gains from the disposal of immovable property. The taxable gain is calculated by deducting from the sale price the following: (a) Acquisition cost, or market value at January 1st, 1980 if the asset was acquired before that date; (b) Expenses incurred to improve the property; and (c) Sale expenses, interest on loans and immovable property tax.

1 day EUR 2,228.96; (Stamp duty as per following fee schedule:

0 – 5000 EUR – 0%

5000 EUR – 170,000 EUR=0.15%

over 170,000 EUR=0.2%

plus 150 EUR)

5 Obtain Sewerage Board Tax clearance

Agency : Sewerage Board

The seller should apply and obtain a sewerage board tax clearance from the Sewerage Board office evidencing the sewerage board tax on the property to be sold has been paid.

1 day no charge

6 Obtaining the certificate of payment of municipal taxes (property taxes and refuse collection fees)

Agency : Municipality of Nicosia

As part of the property transfer process, the seller is required to obtain a document from the Municipality of Nicosia certifying absence of any outstanding municipal tax obligations (property taxes and refuse collection fees).

1 day no charge

7 Declaration of transfer of immovable property at the Land Registry and issuance of the new title deed

Agency : District Land Office of Nicosia

As proposed by the Law No.81(I)/2011, the sale contract must be registered at the Land District office within 6 months after the signature of the contract. The change of ownership takes place when the declaration of transfer is completed and the property is then registered in the name of the buyer at the Land District office. The original and the copy of the contract of sale must be duly stamped.

The buying Corporation is responsible of paying for the Transfer Tax based on the value of the property as determined by the Director of the Department of Lands & Surveys. The fees charged by the Department of Lands and Surveyors for the transfer of immovable property are as follows: up to 85,000 EUR = 3%

from 85,001 – 170,000 EUR = 5%

above 170,000 EUR = 8%

Documents to be provided to the Land District Office are as follows:

  1. Completed Form N270 (Declaration of Transfer of Immovable Property).

  2. The certificate of registration (title) of the immovable property, which is to be transferred

  3. Completed Form N.313.

  4. Proof of payment of all fees, charges and taxes payable for the property under transfer.

  5. Immovable Property Tax and Capital gains tax (Receipts of payment for these taxes are obtained from the Internal Revenue Department)

  6. Sewerage Board Tax (receipt obtained from the Sewerage Board)

  7. Town rate (receipt obtained from the municipality in whose boundaries the property is situated)

  8. Communal rate (receipt obtained from the community in whose boundaries the property is situated)

The declaration of registration is done after the evaluator at the Registry assesses the value of the property, based on the amount stated in the sale agreement. If the assessed price is higher than the paid amount stated in the purchase agreement, an inspection will be conducted by staff from the land registry. This valuation is required in order to prevent fraud (i.e. state in the sale agreement a lower amount in order to pay less transfer fees).

In case of properties that have an additional Value Added Tax cost on the selling price, then there is a full discount on the sum for title transfer, until 31/12/2016. In the rest cases the title transfer fees if paid prior to the 31/12/2016 then 50% discount is applicable. The changes are due to the amendment of the Transfer Fees Law, Cap. 219, L.115(I)/2015

2 days EUR 86,058.47; (The fees charged by the Department of Lands and Surveys for the transfer of immovable properly are as follows:

up to 85,000 EUR = 3%

from 85,001 – 170,000

EUR = 5%

above 170,000 EUR = 8%)

Details – Registering Property in Cyprus – Measure of Quality

details registering property in cyprus measure of quality

Getting Credit

This topic explores two sets of issues—the strength of credit reporting systems and the effectiveness of collateral and bankruptcy laws in facilitating lending. The most recent round of data collection for the project was completed in May 2019. See the methodology for more information.

What the indicators measure

Strength of legal rights index (0–12)

  • Rights of borrowers and lenders through collateral laws (0-10)

  • Protection of secured creditors’ rights through bankruptcy laws (0-2)

Depth of credit information index (0–8)

  • Scope and accessibility of credit information distributed by credit bureaus and credit registries (0-8)

Credit bureau coverage (% of adults)

  • Number of individuals and firms listed in largest credit bureau as a percentage of adult population

Credit registry coverage (% of adults)

  • Number of individuals and firms listed in credit registry as a percentage of adult population

Doing Business assesses the sharing of credit information and the legal rights of borrowers and lenders with respect to secured transactions through 2 sets of indicators. The depth of credit information index measures rules and practices affecting the coverage, scope and accessibility of credit information available through a credit registry or a credit bureau. The strength of legal rights index measures the degree to which collateral and bankruptcy laws protect the rights of borrowers and lenders and thus facilitate lending. For each economy it is first determined whether a unitary secured transactions system exists. Then two case scenarios, case A and case B, are used to determine how a nonpossessory security interest is created, publicized and enforced according to the law. Special emphasis is given to how the collateral registry operates (if registration of security interests is possible). The case scenarios involve a secured borrower, company ABC, and a secured lender, BizBank.

In some economies the legal framework for secured transactions will allow only case A or case B (not both) to apply. Both cases examine the same set of legal provisions relating to the use of movable collateral.

Several assumptions about the secured borrower (ABC) and lender (BizBank) are used:

  • ABC is a domestic limited liability company (or its legal equivalent).

  • ABC has up to 50 employees.

  • ABC has its headquarters and only base of operations in the economy’s largest business city. For 11 economies the data are also collected for the second largest business city.

  • Both ABC and BizBank are 100% domestically owned.

The case scenarios also involve assumptions. In case A, as collateral for the loan, ABC grants BizBank a nonpossessory security interest in one category of movable assets, for example, its machinery or its inventory. ABC wants to keep both possession and ownership of the collateral. In economies where the law does not allow nonpossessory security interests in movable property, ABC and BizBank use a fiduciary transfer-of-title arrangement (or a similar substitute for nonpossessory security interests).

In case B, ABC grants BizBank a business charge, enterprise charge, floating charge or any charge that gives BizBank a security interest over ABC’s combined movable assets (or as much of ABC’s movable assets as possible). ABC keeps ownership and possession of the assets.

Getting Credit – Cyprus

getting credit cyprus

Figure – Getting Credit in Cyprus – Score

figure getting credit in cyprus score

Figure – Getting Credit in Cyprus and comparator economies – Ranking and Score

DB 2020 Getting Credit Score

figure getting credit in cyprus and comparator economies ranking and score

Note: The ranking of economies on the ease of getting credit is determined by sorting their scores for getting credit. These scores are the sum of the scores for the strength of legal rights index and the depth of credit information index.

Figure – Legal Rights in Cyprus and comparator economies

figure legal rights in cyprus and comparator economies

Details – Legal Rights in Cyprus

details legal rights in cyprus

Figure – Credit Information in Cyprus and comparator economies

figure credit information in cyprus and comparator economies

Details – Credit Information in Cyprus

details credit information in cyprus

Note: An economy receives a score of 1 if there is a "yes" to either bureau or registry. If the credit bureau or registry is not operational or covers less than 5% of the adult population, the total score on the depth of credit information index is 0.

details credit information in cyprus

Protecting Minority Investors

This topic measures the strength of minority shareholder protections against misuse of corporate assets by directors for their personal gain as well as shareholder rights, governance safeguards and corporate transparency requirements that reduce the risk of abuse. The most recent round of data collection for the project was completed in May 2019. See the methodology for more information.

What the indicators measure

  • Extent of disclosure index (0–10): Disclosure, review, and approval requirements for related-party transactions

  • Extent of director liability index (0–10): Ability of minority shareholders to sue and hold interested directors liable for prejudicial related-party transactions; Available legal

    remedies (damages, disgorgement of profits, disqualification from managerial position(s) for one year or more, rescission of the transaction)

  • Ease of shareholder suits index (0–10): Access to internal corporate documents; Evidence obtainable during trial and allocation of legal expenses

  • Extent of conflict of interest regulation index (0-30): Sum of the extent of disclosure, extent of director liability and ease of shareholder suits indices

  • Extent of shareholder rights index (0-6): Shareholders’ rights and role in major corporate decisions

  • Extent of ownership and control index (0-7): Governance safeguards protecting shareholders from undue board control and entrenchment

  • Extent of corporate transparency index (0-7): Corporate transparency on ownership stakes, compensation, audits and financial prospects

  • Extent of shareholder governance index (0–20): Sum of the extent of shareholders rights, extent of ownership and control and extent of corporate transparency indices

  • Strength of minority investor protection index (0–50): Sum of the extent of conflict of interest regulation and extent of shareholder governance indices

To make the data comparable across economies, a case study uses several assumptions about the business and the transaction.

The business (Buyer):

  • Is a publicly traded corporation listed on the economy’s most important stock exchange.

  • Has a board of directors and a chief executive officer (CEO) who may legally act on behalf of Buyer where permitted, even if this is not specifically required by law.

  • Has a supervisory board in economies with a two-tier board system on which Mr. James appointed 60% of the shareholder-elected members.

  • Has not adopted bylaws or articles of association that go beyond the minimum requirements. Does not follow codes, principles, recommendations or guidelines that are not mandatory.

  • Is a manufacturing company with its own distribution network.

    The transaction involves the following details:

  • Mr. James owns 60% of Buyer, sits on Buyer’s board of directors and elected two directors to Buyer’s five-member board.

  • Mr. James also owns 90% of Seller, a company that operates a chain of retail hardware stores. Seller recently closed a large number of its stores.

  • Mr. James proposes that Buyer purchase Seller’s unused fleet of trucks to expand Buyer’s distribution of its food products, a proposal to which Buyer agrees. The price is equal to 10% of Buyer’s assets and is higher than the market value.

  • The proposed transaction is part of the company’s principal activity and is not outside the authority of the company.

  • Buyer enters into the transaction. All required approvals are obtained, and all required disclosures made—that is, the transaction was not entered into fraudulently.

  • The transaction causes damages to Buyer. Shareholders sue Mr. James and the executives and directors that approved the transaction.

Protecting Minority Investors – Cyprus

protecting minority investors cyprus protecting minority investors cyprus

Figure – Protecting Minority in Cyprus – Score

figure protecting minority in cyprus score

Figure – Protecting Minority Investors in Cyprus and comparator economies – Ranking and Score

DB 2020 Protecting Minority Investors Score

figure protecting minority investors in cyprus and comparator economies ranking and score

Note: The ranking of economies on the strength of minority investor protections is determined by sorting their scores for protecting minority investors. These scores are the simple average of the scores for the extent of conflict of interest regulation index and the extent of shareholder governance index.

Figure – Protecting Minority Investors in Cyprus and comparator economies – Measure of Quality

figure protecting minority Investors in cyprus and comparator economies measure of quality

Details – Protecting Minority Investors in Cyprus – Measure of Quality

details protecting minority investors in cyprus measure of quality details protecting minority investors in cyprus measure of quality

Paying Taxes

This topic records the taxes and mandatory contributions that a medium-size company must pay or withhold in a given year, as well as the administrative burden of paying taxes and contributions and complying with postfiling procedures (VAT refund and tax audit). The most recent round of data collection for the project was completed in May 2019 covering for the Paying Taxes indicator calendar year 2018 (January 1, 2018 – December 31, 2018). See the methodology for more information.

What the indicators measure

Tax payments for a manufacturing company in 2018 (number per year adjusted for electronic and joint filing and payment)

  • Total number of taxes and contributions paid or withheld, including consumption taxes (value added tax, sales tax or goods and service tax)

  • Method and frequency of filing and payment

Time required to comply with 3 major taxes (hours per year)

  • Collecting information, computing tax payable

  • Preparing separate tax accounting books, if required

  • Completing tax return, filing with agencies

  • Arranging payment or withholding

Total tax and contribution rate (% of commercial profits)

  • Profit or corporate income tax

  • Social contributions, labor taxes paid by employer

  • Property and property transfer taxes

  • Dividend, capital gains, financial transactions taxes

  • Waste collection, vehicle, road and other taxes

Postfiling Index

  • Time to comply with VAT refund (hours)

  • Time to obtain VAT refund (weeks)

  • Time to comply with a corporate income tax correction (hours)

  • Time to complete a corporate income tax correction (weeks)

Using a case scenario, Doing Business records taxes and mandatory contributions a medium size company must pay in a year, and measures the administrative burden of paying taxes, contributions and dealing with postfiling processes. Information is also compiled on frequency of filing and payments, time taken to comply with tax laws, time taken to comply with the requirements of postfiling processes and time waiting.

To make data comparable across economies, several assumptions are used:

  • TaxpayerCo is a medium-size business that started operations on January 1, 2017. It produces ceramic flowerpots and sells them at retail. All taxes and contributions recorded are paid in the second year of operation (calendar year 2018). Taxes and mandatory contributions are measured at all levels of government.

The VAT refund process:

  • In June 2018, TaxpayerCo. makes a large capital purchase: the value of the machine is 65 times income per capita of the economy. Sales are equally spread per month (1,050 times income per capita divided by 12) and cost of goods sold are equally expensed per month (875 times income per capita divided by 12). The machinery seller is registered for VAT and excess input VAT incurred in June will be fully recovered after four consecutive months if the VAT rate is the same for inputs, sales and the machine and the tax reporting period is every month. Input VAT will exceed Output VAT in June 2018.

The corporate income tax audit process:

  • An error in calculation of income tax liability (for example, use of incorrect tax depreciation rates, or incorrectly treating an expense as tax deductible) leads to an incorrect income tax return and a corporate income tax underpayment. TaxpayerCo. discovered the error and voluntarily notified the tax authority. The value of the underpaid income tax liability is 5% of the corporate income tax liability due. TaxpayerCo. submits corrected information after the deadline for submitting the annual tax return, but within the tax assessment period.

Paying Taxes – Cyprus

paying taxes cyprus

Figure – Paying Taxes in Cyprus – Score

figure paying taxes in cyprus score

Figure – Paying Taxes in Cyprus and comparator economies – Ranking and Score

DB 2020 Paying Taxes Score

figure paying taxes in cyprus and comparator economies ranking and score

Note: The ranking of economies on the ease of paying taxes is determined by sorting their scores for paying taxes. These scores are the simple average of the scores for each of the component indicators, with a threshold and a nonlinear transformation applied to one of the component indicators, the total tax and contribution rate. The threshold is defined as the total tax and contribution rate at the 15th percentile of the overall distribution for all years included in the analysis up to and including Doing Business 2015, which is 26.1%. All economies with a total tax and contribution rate below this threshold receive the same score as the economy at the threshold.

Figure – Paying Taxes in Cyprus and comparator economies – Measure of Quality

figure paying taxes in cyprus and comparator economies measure of quality

Details – Paying Taxes in Cyprus

details paying taxes in cyprus details paying taxes in cyprus

Details – Paying Taxes in Cyprus – Tax by Type

details paying taxes in cyprus tax by type

Details – Paying Taxes in Cyprus – Measure of Quality

details paying taxes in cyprus measure of quality

Notes:

Names of taxes have been standardized. For instance income tax, profit tax, tax on company's income are all named corporate income tax in this table. The hours for VAT include all the VAT and sales taxes applicable.

The hours for Social Security include all the hours for labor taxes and mandatory contributions in general.

The postfiling index is the average of the scores on time to comply with VAT refund, time to obtain a VAT refund, time to comply with a corporate income tax correction and time to complete a corporate income tax correction.

N/A = Not applicable.

Trading across Borders

Doing Business records the time and cost associated with the logistical process of exporting and importing goods. Doing Business measures the time and cost (excluding tariffs) associated with three sets of procedures—documentary compliance, border compliance and domestic transport—within the overall process of exporting or importing a shipment of goods. The most recent round of data collection for the project was completed in May 2019. See the methodology for more information.

What the indicators measure

Documentary compliance

  • Obtaining, preparing and submitting documents during transport, clearance, inspections and port or border handling in origin economy

  • Obtaining, preparing and submitting documents required by destination economy and any transit economies

  • Covers all documents required by law and in practice, including electronic submissions of information

Border compliance

  • Customs clearance and inspections

  • Inspections by other agencies (if applied to more than 20% of shipments)

  • Handling and inspections that take place at the economy’s port or border

Domestic transport

  • Loading or unloading of the shipment at the warehouse or port/border

  • Transport between warehouse and port/border

  • Traffic delays and road police checks while shipment is en route

To make the data comparable across economies, a few assumptions are made about the traded goods and the transactions:

Time: Time is measured in hours, and 1 day is 24 hours (for example, 22 days are recorded as 22×24=528 hours). If customs clearance takes 7.5 hours, the data are recorded as is. Alternatively, suppose documents are submitted to a customs agency at 8:00a.m., are processed overnight and can be picked up at 8:00a.m. the next day. The time for customs clearance would be recorded as 24 hours because the actual procedure took 24 hours.

Cost: Insurance cost and informal payments for which no receipt is issued are excluded from the costs recorded. Costs are reported in U.S. dollars. Contributors are asked to convert local currency into U.S. dollars based on the exchange rate prevailing on the day they answer the questionnaire. Contributors are private sector experts in international trade logistics and are informed about exchange rates.

Assumptions of the case study:

  • For all 190 economies covered by Doing Business, it is assumed a shipment is in a warehouse in the largest business city of the exporting economy and travels to a warehouse in the largest business city of the importing economy.

  • It is assumed each economy imports 15 metric tons of containerized auto parts (HS 8708) from its natural import partner—the economy from which it imports the largest value (price times quantity) of auto parts. It is assumed each economy exports the product of its comparative advantage (defined by the largest export value) to its natural export partner—the economy that is the largest purchaser of this product. Shipment value is assumed to be $50,000.

  • The mode of transport is the one most widely used for the chosen export or import product and the trading partner, as is the seaport or land border crossing.

  • All electronic information submissions requested by any government agency in connection with the shipment are considered to be documents obtained, prepared and submitted during the export or import process.

  • A port or border is a place (seaport or land border crossing) where merchandise can enter or leave an economy.

  • Relevant government agencies include customs, port authorities, road police, border guards, standardization agencies, ministries or departments of agriculture or industry, national security agencies and any other government authorities.

Trading across Borders – Cyprus

trading across borders cyprus

Figure – Trading across Borders in Cyprus – Score

figure trading across borders in cyprus score

Figure – Trading across Borders in Cyprus and comparator economies – Ranking and Score

figure trading across borders in cyprus comparator economies ranking and score

Note: The ranking of economies on the ease of trading across borders is determined by sorting their scores for trading across borders. These scores are the simple average of the scores for the time and cost for documentary compliance and border compliance to export and import.

Figure – Trading across Borders in Cyprus – Time and Cost

figure trading across borders in cyprus time and cost

Details – Trading across Borders in Cyprus

details trading across borders in cyprus

Details – Trading across Borders in Cyprus – Components of Border Compliance

details trading across borders in cyprus components of border compliance

Details – Trading across Borders in Cyprus – Trade Documents

details trading across borders in cyprus Trade Documents

Enforcing Contracts

The enforcing contracts indicator measures the time and cost for resolving a commercial dispute through a local first-instance court, and the quality of judicial processes index, evaluating whether each economy has adopted a series of good practices that promote quality and efficiency in the court system. The most recent round of data collection was completed in May 2019. See the methodology for more information.

What the indicators measure

Time required to enforce a contract through the courts (calendar days)

  • Time to file and serve the case

  • Time for trial and to obtain the judgment

  • Time to enforce the judgment

Cost required to enforce a contract through the courts (% of claim value)

  • Average attorney fees

  • Court costs

  • Enforcement costs

Quality of judicial processes index (0-18)

  • Court structure and proceedings (-1-5)

  • Case management (0-6)

  • Court automation (0-4)

  • Alternative dispute resolution (0-3)

The dispute in the case study involves the breach of a sales contract between two domestic businesses. The case study assumes that the court hears an expert on the quality of the goods in dispute. This distinguishes the case from simple debt enforcement.

To make the data on the time and comparable across economies, several assumptions about the case are used:

  • The dispute concerns a lawful transaction between two businesses (Seller and Buyer), both located in the economy’s largest business city. For 11 economies the data are also collected for the second largest business city.

  • The Buyer orders custom-made furniture, then fails to pay alleging that the goods are not of adequate quality.

  • The value of the dispute is 200% of the income per capita or the equivalent in local currency of USD 5,000, whichever is greater.

  • The Seller sues the Buyer before the court with jurisdiction over commercial cases worth 200% of income per capita or $5,000 whichever is greater.

  • The Seller requests the pretrial attachment of the defendant’s movable assets to secure the claim.

  • The claim is disputed on the merits because of Buyer’s allegation that the quality of the goods was not adequate.

  • The judge decides in favor of the seller; there is no appeal.

  • The Seller enforces the judgment through a public sale of the Buyer’s movable assets.

Enforcing Contracts – Cyprus

enforcing contracts cyprus

Figure – Enforcing Contracts in Cyprus – Score

figure enforcing contracts in cyprus score

Figure – Enforcing Contracts in Cyprus and comparator economies – Ranking and Score

DB 2020 Enforcing Contracts Score

figure enforcing contracts in cyprus and comparator economies ranking and score

Note: The ranking of economies on the ease of enforcing contracts is determined by sorting their scores for enforcing contracts. These scores are the simple average of the scores for each of the component indicators.

Figure – Enforcing Contracts in Cyprus – Time and Cost

figure enforcing contracts in cyprus time and cost

Figure – Enforcing Contracts in Cyprus and comparator economies – Measure of Quality

figure enforcing contracts in cyprus and comparator economies measure of quality

Details – Enforcing Contracts in Cyprus

details enforcing contracts in cyprus

Details – Enforcing Contracts in Cyprus – Measure of Quality

details enforcing contracts in cyprus measure of quality details enforcing contracts in cyprus measure of quality

Resolving Insolvency

Doing Business studies the time, cost and outcome of insolvency proceedings involving domestic legal entities. These variables are used to calculate the recovery rate, which is recorded as cents on the dollar recovered by secured creditors through reorganization, liquidation or debt enforcement (foreclosure or receivership) proceedings. To determine the present value of the amount recovered by creditors, Doing Business uses the lending rates from the International Monetary Fund, supplemented with data from central banks and the Economist Intelligence Unit. The most recent round of data collection was completed in May 2019. See the methodology for more information.

What the indicators measure

Time required to recover debt (years)

  • Measured in calendar years

  • Appeals and requests for extension are included

Cost required to recover debt (% of debtor’s estate)

  • Measured as percentage of estate value

  • Court fees

  • Fees of insolvency administrators

  • Lawyers’ fees

  • Assessors’ and auctioneers’ fees

  • Other related fees

To make the data on the time, cost and outcome comparable across economies, several assumptions about the business and the case are used:

  • A hotel located in the largest city (or cities) has 201 employees and 50 suppliers. The hotel experiences financial difficulties.

  • The value of the hotel is 100% of the income per capita or the equivalent in local currency of USD 200,000, whichever is greater.

  • The hotel has a loan from a domestic bank, secured by a mortgage over the hotel’s real estate. The hotel cannot pay back the loan, but makes enough money to operate otherwise.

In addition, Doing Business evaluates the quality of legal framework applicable to judicial liquidation and reorganization proceedings and the extent to which best insolvency practices have been implemented in each economy covered.

Outcome

  • Whether business continues operating as a going concern or business assets are sold piecemeal

Recovery rate for creditors

  • Measures the cents on the dollar recovered by secured creditors

  • Outcome for the business (survival or not) determines the maximum value that can be recovered

  • Official costs of the insolvency proceedings are deducted

  • Depreciation of furniture is taken into account

  • Present value of debt recovered

Strength of insolvency framework index (0- 16)

  • Sum of the scores of four component indices:

  • Commencement of proceedings index (0-3)

  • Management of debtor’s assets index (0-6)

  • Reorganization proceedings index (0-3)

  • Creditor participation index (0-4)

Resolving Insolvency – Cyprus

resolving insolvency cyprus

Figure – Resolving Insolvency in Cyprus – Score

figure resolving insolvency in cyprus score

Figure – Resolving Insolvency in Cyprus and comparator economies – Ranking and Score

DB 2020 Resolving Insolvency Score

figure resolving insolvency in cyprus and comparator economies ranking and score

Note: The ranking of economies on the ease of resolving insolvency is determined by sorting their scores for resolving insolvency. These scores are the simple average of the scores for the recovery rate and the strength of insolvency framework index.

Figure – Resolving Insolvency in Cyprus – Time and Cost

figure resolving insolvency in cyprus time and cost

Figure – Resolving Insolvency in Cyprus and comparator economies – Measure of Quality

figure resolving insolvency in cyprus and comparator economies measure of quality

Note: Even if the economy’s legal framework includes provisions related to insolvency proceedings (liquidation or reorganization), the economy receives 0 points for the strength of insolvency framework index, if time, cost and outcome indicators are recorded as “no practice.”

Figure – Resolving Insolvency in Cyprus and comparator economies – Recovery Rate

figure resolving insolvency in cyprus and comparator economies measure of quality

Details – Resolving Insolvency in Cyprus

details resolving insolvency in cyprus

Details – Resolving Insolvency in Cyprus – Measure of Quality

details resolving insolvency in cyprus measure of quality

Note: Even if the economy’s legal framework includes provisions related to insolvency proceedings (liquidation or reorganization), the economy receives 0 points for the strength of insolvency framework index, if time, cost and outcome indicators are recorded as “no practice.”

Employing Workers

Doing Business presents detailed data for the employing workers indicators on the Doing Business website (http://www.doingbusiness.org). The study does not present rankings of economies on these indicators or include the topic in the aggregate ease of doing business score or ranking on the ease of doing business.

The most recent round of data collection was completed in May 2019. See the methodology for more information.

What the indicators measure

Hiring

(i) whether fixed-term contracts are prohibited for permanent tasks; (ii) maximum cumulative duration of fixed-term contracts;

(iii) length of the maximum probationary period; (iv) minimum wage;(v) ratio of minimum wage to the average value added per worker.

Working hours

(i) maximum number of working days allowed per week; (ii) premiums for work: at night, on a weekly rest day and overtime;

(iii) whether there are restrictions on work at night, work on a weekly rest day and for overtime work; (iv) length of paid annual leave.

Redundancy rules

(i) whether redundancy can be basis for terminating workers; (ii) whether employer needs to notify and/or get approval from third party to terminate 1 redundant worker and a group of 9 redundant workers; (iii) whether the law requires employer to reassign or retrain a worker before making worker redundant; (iv) whether priority rules apply for redundancies and reemployment.

To make the data comparable across economies, several assumptions about the worker and the business are used.

The worker:

  • Is a cashier in a supermarket or grocery store, age 19, with one year of work experience.

  • Is a full-time employee.

  • Is not a member of the labor union, unless membership is mandatory.

The business:

  • Is a limited liability company (or the equivalent in the economy).

  • Operates a supermarket or grocery store in the economy’s largest business city. For 11 economies the data are also collected for the second largest business city.

  • Has 60 employees.

  • Is subject to collective bargaining agreements if such agreements cover more than 50% of the food retail sector and they apply even to firms that are not party to them.

  • Abides by every law and regulation but does not grant workers more benefits than those mandated by law, regulation or (if applicable) collective bargaining agreements.

Redundancy cost

(i) notice period for redundancy dismissal; (ii) severance payments, and (iii) penalties due when terminating a redundant worker. Data on the availability of unemployment protection for a worker with one year of employment is also collected.

Employing Workers – Cyprus

Details – Employing Workers in Cyprus

Hiring

Fixed-term contracts prohibited for permanent tasks? No

Maximum length of a single fixed-term contract (months) No limit

Maximum length of fixed-term contracts, including renewals (months) 30.0

Minimum wage applicable to the worker assumed in the case study (US$/month) 1046.8

Maximum length of probationary period (months) 24.0

Ratio of minimum wage to value added per worker 0.3

Standard workday 8.0

Working hours

Premium for night work (% of hourly pay) 0.0

Maximum number of working days per week 5.5

Premium for overtime work (% of hourly pay) 100.0

Premium for work on weekly rest day (% of hourly pay) 100.0

Restrictions on weekly holiday? No

Restrictions on night work? No

Paid annual leave for a worker with 1 year of tenure (working days) 20.0

Restrictions on overtime work? No

Paid annual leave for a worker with 10 years of tenure (working days) 20.0

Paid annual leave for a worker with 5 years of tenure (working days) 20.0

Redundancy rules

Paid annual leave (average for workers with 1, 5 and 10 years of tenure, in working days) 20.0

Third-party notification if one worker is dismissed? Yes

Dismissal due to redundancy allowed by law? Yes

Third-party notification if nine workers are dismissed? Yes

Third-party approval if one worker is dismissed? No

Retraining or reassignment obligation before redundancy? Yes

Third-party approval if nine workers are dismissed? No

Priority rules for reemployment? Yes

Priority rules for redundancies? No

Notice period for redundancy dismissal for a worker with 1 year of tenure (weeks of salary) 2.0

Redundancy cost

Notice period for redundancy dismissal for a worker with 10 years of tenure (weeks of salary) 8.0

Notice period for redundancy dismissal for a worker with 5 years of tenure (weeks of salary) 7.0

Severance pay for redundancy dismissal for a worker with 1 year of tenure (weeks of salary) 0.0

Notice period for redundancy dismissal (average for workers with 1, 5 and 10 years of tenure, in weeks of salary) 5.7

Severance pay for redundancy dismissal for a worker with 5 years of tenure (weeks of salary) 0.0

Severance pay for redundancy dismissal for a worker with 10 years of tenure (weeks of salary) 0.0

Unemployment protection after one year of employment? Yes

Severance pay for redundancy dismissal (average for workers with 1, 5 and 10 years of tenure, in weeks of salary) 0.0

PEO Canada

Cyprus, as a PEO (Professional Employer Organization) country, offers a favorable and dynamic environment for businesses seeking expansion and global workforce solutions. Located at the crossroads of Europe, Africa, and Asia, Cyprus serves as a strategic gateway for companies looking to establish a presence in multiple markets. As a PEO destination, Cyprus boasts a highly skilled and multilingual workforce, enabling seamless communication and efficient operations. The country’s business-friendly regulations and low corporate tax rates make it an attractive choice for companies looking to optimize their international operations. Moreover, Cyprus provides comprehensive PEO services, assisting businesses in navigating complex employment laws, managing payroll, and handling HR-related tasks, allowing them to focus on their core activities and achieve their growth objectives with confidence.

PEO services in Cyprus offer a comprehensive and efficient solution for businesses looking to expand their operations without the burden of establishing a legal entity in the country. Cyprus-based PEO companies act as a co-employer, enabling foreign businesses to hire and manage local employees while complying with all local labor laws and regulations. These services cover a wide range of HR-related tasks, including payroll administration, tax compliance, employee benefits management, and handling legal documentation. By partnering with a PEO in Cyprus, companies can focus on their core competencies and strategic objectives, while the PEO takes care of the administrative complexities of managing a local workforce. Additionally, PEO services in Cyprus offer flexibility and scalability, making them ideal for both small startups and large multinational corporations seeking to access the country’s skilled talent pool and vibrant business landscape.

Business Reforms in Cyprus

From May 2, 2018 to May 1, 2019, 115 economies implemented 294 business regulatory reforms across the 10 areas measured by Doing Business. Reforms inspired by

Doing Business have been implemented by economies in all regions. The following are reforms implemented since Doing Business 2008. =Doing Business reform making it easier to do business. = Change making it more difficult to do business.

DB2020

Starting a Business: Cyprus made starting a business less expensive by reducing the cost to register a company.

Paying Taxes: Cyprus made paying taxes easier by implementing an online system for filing and paying mandatory labor contributions.

DB2019

Protecting Minority Investors: Cyprus strengthened minority investor protections by increasing disclosure of related-party transactions and strengthening shareholders’ rights and role in major corporate decisions.

Paying Taxes: Cyprus made paying taxes easier by abolishing the immovable property tax, discontinuing the special contribution for private sector employees, private sector pensioners and self-employed individuals, introducing an online system for filing value added tax returns and value added tax refund claims and reducing the sewerage duty tax rates.

DB2018

Registering Property: Cyprus made registering property easier by decreasing the Immovable Property Tax.

Paying Taxes: Cyprus made paying taxes more difficult by increasing the frequency and number of VAT audits, including in cases of VAT cash refund requests. At the same time, Paying Taxes was made less costly following the introduction of notional interest tax deductible expenses and an increase in the discount rate on immovable property.

DB2017

Starting a Business: Cyprus made starting a business easier by merging the procedures to register for taxes and for VAT while making name search and reservation faster.

Getting Credit: Cyprus made access to credit information more difficult by stopping the distribution of historical credit data.

Paying Taxes: Cyprus made paying taxes easier by introducing improvements to its internal processes and to the electronic tax filing system. Cyprus also made paying taxes less costly by increasing the discount rate applied on immovable property tax.

Employing Workers: Cyprus amended its legislation to allow shops and supermarkets to operate seven days a week

DB2016

Getting Electricity: The utility in Cyprus made getting electricity easier by reducing the time required for obtaining a new connection.

Getting Credit: Cyprus improved access to credit information by allowing credit bureaus to collect and report positive credit information and to report credit histories for both borrowers and guarantors.

Paying Taxes: Cyprus made paying taxes easier for companies by facilitating online payment of corporate income tax. At the same time, Cyprus raised the contribution rate for social insurance paid by employers, lowered the tax brackets for the social contribution fund, raised the rate on interest income and increased the vehicle tax.

Enforcing Contracts: Cyprus made enforcing contracts easier by introducing a fast-track simplified procedure for claims worth less than €3,000.

Resolving Insolvency: Cyprus made resolving insolvency easier by introducing a reorganization procedure as well as provisions to facilitate the continuation of the debtor’s business during insolvency proceedings and allow creditors greater participation in important decisions during the proceedings.

DB2015

Getting Credit: Cyprus improved its credit information system by adopting a central bank directive eliminating the minimum threshold for loans to be included in credit bureaus’ databases.

Paying Taxes: Cyprus made paying taxes easier for companies by reducing the number of provisional tax installments for corporate income tax.

DB2013

Registering Property: Cyprus made property transfers faster by computerizing its land registry.

Paying Taxes: Cyprus made paying taxes more costly for companies by increasing the special defense contribution rate on interest income and introducing a private sector special contribution and a fixed annual fee for companies registered in Cyprus. At the same time, it simplified tax compliance by introducing electronic filing for corporate income tax.

DB2012

Protecting Minority Investors: Cyprus strengthened investor protections by requiring greater corporate disclosure to the board of directors, to the public and in the annual report.

DB2011

Getting Credit: Cyprus improved access to credit information by establishing its first private credit bureau.

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