Michael Chambers & Co. LLC

Cyprus is struggling with the worst crisis in its history since the 1974 invasion by Turkish military forces that divided the country in two.

High-net-worth individuals with valuable possessions around the globe need effective asset protection tools to manage and safeguard their wealth, as a respond to the differing legislations and tax regulations of the various jurisdictions.

Cyprus boasts the third biggest maritime fleet in the EU; the tenth biggest fleet in the world. It is a market leader in ship management and as such security and safety of ships is a paramount issue, which has been addressed under the new Protection of Cyprus Ships Against Acts of Piracy and Other Unlawful Acts Law 2012.

When creating a company in Cyprus promoters will most often be given the choice of creating the company from scratch (tailor made) or buying a company that has already been created and amending it to suit their specific purposes (off the shelf).

One in five marriages in Cyprus will end in divorce. Family law provisions on the island are complicated by changes in the law made in 2003 which means that different laws will apply to those who were married before 2003 and those who were married after 2003. The newer Marriage Law 2003 will deal with divorces of marriage celebrated after 2003 whereas marriages that took place before 2003 are dealt with under the provisions of the Family Courts Law.

Having decided to create a new business in Cyprus, one of the first considerations a promoter of that business will have will be what to name the new entity. Whilst the moment at which the new company’s name is conceived can be thrilling, the legal requirements behind a name can too often be overlooked.

A pledge is a form of real security giving the creditor (“pledgee”) proprietary rights over named property belonging to the debtor (“pledgor”). The pledgee has the right to retain those proprietary rights over the pledged property until an obligation (for instance payment of a debt) is discharged and the property is then restored back to the pledgor or alternatively...

The aftermath of the 1974 occupation by Turkey of the northern part of Cyprus and subsequent division of the island is still keenly felt by citizens of both the Republic of Cyprus in the south and the Turkish Republic of Northern Cyprus (TRNC) in the North.

Any business that regularly enters into terms (for example for the sale or purchase of goods) that are often the same or similar can benefit from creating its own standard terms of business. Standard terms are a set of terms that a business can use to govern its relationship with all of its clients.

International sales contracts constitute a specialist area of law that raises unique considerations when compared with domestic counterparts. Commercial law, responding to the requirements of the international trading community as a whole, has adapted in order to meet the special needs and problems posed by such international contracts. International sales are generally governed by common law, legislation, a number of international conventions, rules, terms and customs.

Although it is often said that a person may not make a Will in Cyprus, this is in fact a gross oversimplification of the legal provisions regarding inheritance in Cyprus. In fact, some individuals are able to make a Will for their whole estate and others are entitled to make a Will for the, so-called, “disposable portion” of their estate.

Value Added Tax is a tax charged on every taxable supply, by a taxable person, of goods and services within the Republic, other than an exempted supply. It is also charged on goods acquired in Cyprus from other EU countries and on goods imported from outside the EU. VAT is an indirect taxation which is applied by the VAT registered business acting as agent of the VAT authority by adding VAT to the full sale price of the taxable goods and services they provide.

The law on international trusts in Cyprus has undergone considerable changes this month with the enactment of a new law[1] that amends the International Trusts Law[2]. The amendments have been heralded as positioning Cyprus as the most favorable trust jurisdiction in the European Union and its much-anticipated provisions have been received with considerable praise by investors and professional advisors across the island.

Capital Gains Tax (“CGT”) is a tax imposed on capital gains made by companies and individuals in Cyprus. - Application - It is applied to any gain that is attributable to: a) the disposal of immovable property located in the Republic; and b) the sale of shares in a company that owns immovable property in the Republic provided that the relevant company is not listed on a recognized stock exchange.

In a challenging financial climate, it has never been more important to comprehend the system of taxation in the jurisdictions in which you operate. One needs to be fully aware of the entire picture concerning applicable fiscal provisions and the advantages that one jurisdiction may present over another in order to make informed and correct choices about various venues for undertaking international business.

The Cyprus government’s fiscal policy clearly embraces tax incentives for foreigners, which act as a considerable inducement for those wishing to conduct international business on the island. One of the simplest indicators of this intention is the high number of double taxation treaties that Cyprus has executed with other countries.

Protection of confidential ideas, processes and creations are an exceptionally important element of most businesses. The law rewards the revelation of certain business ideas into the wider market by allowing the creator a certain degree of exclusivity – for example the protection granted by a patent, or that offered by copyright – however any such protection has limited lifespan and does not extend to every type of confidential information a business may hold.

Copyright is a right granted to the creator of an original work to exclusive use of that work for a period of time limited by law. In Cyprus copyright is governed by the Copyright Section of the Department of the Registrar of Companies and Official Receiver. The governing laws are: N.63/77, N.18(I)/93, N.54(I)/99, N.12 (I)/2001, N.128 (I)/2002, N.128 (i) 2004 and N.123 (I) 2006.

A patent is a right to ownership of an invention granted to the inventor by the government. It allows the patent owner exclusive use of (and the right to license out use of) the invention in return for revealing it to the public domain.

The logo, symbol or design of a company is a commodity that serves to distinguish the goods or services of one company from those of its competitors. Once created, a trademark can be registered and will enjoy an initial seven-year period of protection from the date of filing of the application, which is renewable every fourteen years thereafter.

A trademark is a distinctive sign or indicator that is used by a business or an individual to distinguish his goods or services from others on the market. The trademark will be unique to that business or individual and will serve to identify the source of the goods and services. A trademark may consist of: words; signs; symbols; logos; pictures; shapes; colours; letters; phrases; designs and images or a combination of such elements.

Each year hundreds of buyers are attracted to purchasing real estate on the island of Cyprus. With a system of registered land and a legal process broadly based on that of England and Wales, buying a property in Cyprus is relatively straightforward. In this article we will outline some simple precautions that a purchaser of property in Cyprus can take in order to protect his investment and ensure that his acquisition proceeds as smoothly as possible.

When buying property in Cyprus there are a number of additional costs and taxes of which every buyer should be aware prior to committing to an acquisition. It is extremely important that a potential buyer plans for and takes into account each of the following incidental costs that will occur when buying property in Cyprus.

A distributorship agreement is one that is made between the supplier and distributor of goods. The relationship is different in nature to other possible models of supply such as agency or franchise.

In 2006 a tennis tournament sponsor sued Venus and Serena Williams for non-attendance at their event. The sponsor claimed that the tennis stars were obliged to attend by virtue of a commitment to that effect made by their father. The case rested upon whether the girls’ father had authority to bind them contractually.

The term “agent” or “agency” must be used with particular caution in Cyprus as the law attaches a special significance to an agency relationship. In some cases the term “agency” will be used in commerce where in fact, legally speaking, there is no such relationship and similarly, in some cases where common commercial jargon refers to something other than agency, in fact (legally speaking) an agency relationship can be said to exist.

Benjamin Franklin famously declared that “in this world nothing is certain but death and taxes”. Estate planning is a sensitive issue, which many people are reluctant to address, but considering that the plans and documents you make concerning your death are likely to be some of the most important financial documents you will ever make, inheritance is a crucial legal issue which everyone must consider.

Consumer protection demands that producers of products are responsible for the safety of the goods they manufacture and that, in the event that they are faulty, appropriate avenues of action are available to anyone affected by the faulty goods. In Cyprus, the EU legislation governing product liability (Council Directive 85/374/EEC) has been directly implemented into Cypriot law through the Defective Products (Civil Liability) Laws of 1995 to 2002 (Law 105 (I) 95).

When a company is created it enjoys a separate legal identity of its own and, as such, when it stops operations a specific procedure must be followed in order to legally bring its existence to an end. The procedure is outlined in the Companies Law, Cap 113, and is a different procedure from that followed in the case of an individual going into bankruptcy. A company may either be wound up voluntarily, or by the court compulsorily.

Property is one of the most valuable assets that a person or a company can own and it is perhaps by virtue of this value that property tends to attract a great deal of litigation and dispute. There are many different kinds of dispute that can occur in relation to property; in this article Michael Chambers highlights some of the most common forms of dispute and the action available to an aggrieved party seeking resolution.

A contract is a written agreement made between the parties which states the terms of their legal relationship. Every contract will contain different terms and conditions concerning the bargain it embodies. A dispute will occur when any of the terms and conditions are breached by either party, when there is disagreement as to interpretation of the written agreement or in the event that the written agreement has failed to address a specific matter.

Litigation refers to the dispute resolution process through the courts. Having been a British colony until 1960, the Cypriot legal system and rules relating to litigation are primarily based on the English legal system. The courts are divided into six types: District Courts (civil actions); Assize Courts (criminal cases); Family Courts; Rent Control Tribunals; Industrial Dispute Tribunals and Military Court.

Arbitration is a consensual legal technique for resolution of disputes without the necessity to refer the matter to court. The parties to a dispute voluntarily refer the matter to an impartial third person (the arbitrator) who will be empowered by the parties to make a decision based on the evidence and the arguments which are presented to him. Once made, the arbitration award will be binding upon the parties and fully enforceable against them.

There is a vast array of benefits available to those wishing to register a shipping vessel under the Cypriot flag. In terms of geographical location, infrastructure, safety and efficient operations Cyprus can offer substantial advantages. Underlying the entire system is a highly profitable economic environment which offers major tax advantages and other fiscal incentives to those who operate under the Cyprus flag.

Cyprus is a major ship management centre and its flag holds an envious reputation worldwide. The Cypriot Register now ranks 10th in size internationally and represents the third largest fleet in the EU. Moreover, the Register is growing, with shipping entrepreneurs attracted to the host of benefits offered by registration under the Cyprus flag and the active promotion of ship management interests by regulatory authorities.

Every kind of commercial contract will have its own individually negotiated and agreed terms (for example what is to be supplied; where; how; when; the price for supply; quality etc) all of which may be determined by the parties involved and unique to the particular agreement at hand. However, other terms and considerations will have a more general and universal application and will need to be thought through in the drafting of any agreement, regardless of subject matter.

Activities of all investment firms in Cyprus are governed by CySEC, the Cyprus Securities and Exchange Commission. CySEC isresponsible for authorizing investment firms to undertake investment and ancillary services and governs ongoing transactions and compliance with the various applicable regulations. Investment firms may consider undertaking their activities abroad through establishment of a branch in the intended market or by providing services in that territory where authorized.

In the Republic of Cyprus only certain persons and companies are permitted to undertake investment services and activities (for a full list of such regulated activities please refer to the end of this article)[i] and such entities are tightly regulated in order to ensure high standards and full consumer protection. The Cyprus Securities and Exchange Commission is the body responsible for the issuing of licenses and for overseeing the operation of such entities.

There are three primary established business media in Cyprus: companies; partnerships and sole traders. Sole traders tend to represent smaller operational concerns and therefore, as a business takes off, many promoters of the business will primarily be concerned with considering the characteristics and applicable benefits of a company or a partnership.

On Thursday 3rd November the House of Representatives in Cyprus voted to approve a Bill aimed at reducing transfer fees in property transactions. Property transfer tax represents a considerable levy on purchasers of property on the island and the aim of the latest measure is to prompt the struggling property market by offering buyers a considerable incentive to buying on the island and completing the transfer of the property into their name.

Clearly Cyprus holds great attraction as a business venue for investors – Michael Chambers explores why so many international businesses entities are drawn to Cyprus and how you can take advantage of the venue yourself.

Cyprus undoubtedly offers a considerably advantageous base for any business. Offering a highly beneficial taxation system and located at a geographically favorable position – it is little wonder that Cyprus enjoys a reputation as an international business center of excellence. However, before a company can be created, certain fundamental decisions need to be made about the kind of legal entity required and the manner in which it will operate.

In Cyprus the registration of trademarks with the Registrar of Companies is governed by the Cyprus Trade Mark Law, CAP 268 and the Trade Mark Rules 1951 as amended. Cyprus law provides for the recordal of a license with the Registrar of Companies however its provisions are not mandatory. A non-registered trade mark will be valid in Common Law.

According to the latest demographic report of the Statistical Service of Cyprus for the year 2009, the number of divorces is increasing. Particularly, in 2009 the number of divorces increased to 1738, compared to 1639 for 2008.

Cyprus is considered one of the safest European countries to invest in since its market is growing at a stable rate and its prices are competitive. If every perspective purchaser bears in mind the following points then a safe and prosperous investment will be carried out.

Cyprus was a British colony until 1960 and as such the Cyprus legal system was highly influenced by the English legal system and the principles of common law and equity were adopted by the legal system of Cyprus.