Key innovations

In 2025, Cyprus will implement reforms aimed at complying with EU standards, improving the investment climate, and strengthening the confidence of international banks.

Transparency of beneficiaries (UBO register)

On January 1, 2025, an automated register of ultimate beneficial owners will come into force. Companies are required to:

• upload beneficiary data for the first time within 90 days of the company’s creation;
• update the information within 45 days after a change in structure;
• confirm the data annually between October 1 and December 31 (extended deadline – until March 31, 2025).

Fines:

• €100 on the first day of non-payment + €50 per day thereafter, up to a maximum of €5,000;
• from February 1, 2025, severe sanctions are possible, ranging from automatic removal from the register to court injunctions.

The UBO register was created on the basis of the AML Law (L.188(I)/2007) and directives KDP 423/2024, 401/2023, etc.

Electronic (XBRL) reporting

From 2025, corporations will be required to submit financial, management, and ESG reports in digital format in accordance with the XBRL standard (under CAP 113, Companies Law). The following is expected:

• faster preparation of reports (from 20 to 7 days);
• a 15–20% reduction in audit costs (according to estimates by the Association of Accountants).

Authorized capital and local presence

• Minimum authorized capital: €5,000 (general companies), €25,000 for strategic industries.
• Each board of directors must include at least one Cyprus resident for substance purposes – strengthening legal presence and bank trust.

Liquidation and restructuring

• Voluntary liquidation procedures are reduced from 12 to 4 months in the absence of debt.
• Anti-crisis measures are in place: a moratorium on creditors’ claims for up to 6 months and easier access to debt restructuring.

Practical application: real-life cases and tips

1. Transparent structure – the key to banking operations

Almanova Law case study: Client – European holding company. Almanova Law organized:

• rapid collection and uploading of UBO data;
• synchronization with resident directors and substance;
• interaction with banks: the client opened accounts in three Cypriot banks in 6 weeks – previously this took up to 4 months.

2. IT relocation and immigration

IT company from Eastern Europe: within 8 weeks at the expense of:

• registering an IP company;
• obtaining licenses;
• processing residence permits for key employees and founders.

Now the team works in Cyprus and complies with the new substance and financial disclosure requirements.

3. Protection against tax claims

The family office faced claims related to CFC transactions. Almanova Law conducted:

• a preventive audit;
• negotiations with the tax authorities;
• implementation of compliance systems.

The result: all claims were withdrawn, and processes were put in place to prevent new risks.

4. Real estate investments

An investment fund approached us to purchase an office in Nicosia. Almanova Law:

• conducted due diligence on the property;
• structured the transaction with a 16% tax saving;
• registered a company with the necessary capital and substance level.

Conclusions and practical advice

1. Compliance with UBO deadlines is not an option, but an obligation.
Upload beneficiary registrations by January 31, 2025; confirm for 2024 by March 31. Fines of up to €5,000 and the threat of liquidation are real.

2. Substance is the new reality.
You need a resident director + office + local services – without these, banks will refuse.

3. XBRL – time for digitalization.
Convert your reports to XBRL: this will speed up the audit and save on reporting costs.

4. Compliance and consulting are a necessity.
Engaging professional lawyers and accountants reduces the risk of fines and blockages. Your protection is competent processes and regular checks.

5. A powerful tool for growth.
Reform is not just about restrictions. It is a chance to improve investor confidence, strengthen your market position, and enhance the reputation of your jurisdiction.

Summary

The 2025 Cyprus corporate law reforms are a significant step toward a new, transparent, and efficient business environment. This is a time of transformation for businesses: those who apply the rules correctly will gain an advantage. Your task is to adapt quickly, automate processes, and implement substance and compliance. This is the path from restrictions to opportunities – and with the right preparation, your business will become a leader.

If you need help adapting your structure, compiling a UBO register, XBRL reporting, or creating substance, we are ready to support you every step of the way.

Why businesses choose experts who go beyond standard solutions

Working with dozens of Cypriot and international companies, we at Almanova Law are convinced that successful legal support is always more than just compliance with the letter of the law. It is a deep immersion in the client’s real tasks, a prompt response to legislative changes, and competent risk forecasting.

Here are just a few recent cases from our practice:

• Complex reorganization of a European holding company:
  When the client faced stricter requirements for substance and beneficial ownership disclosure, we not only ensured full legalization of the structure, but also reduced administrative costs by 21%. Thanks to clear documentation and timely updating of the UBO register, the company avoided account blocking and quickly opened new bank lines.
• Relocation of an IT company to Cyprus:
  An IT startup from Eastern Europe set a goal—not just to register, but to organize a turnkey business. We prepared a package of documents, negotiated with local authorities, and obtained work permits and residence permits for the team. Within 8 weeks, the company was fully operational in Limassol and complied with the new substance and reporting rules.
• Tax audit and family office protection:
  A preventive strategy against CFC and residency claims was developed for a large family office with assets in the EU. A comprehensive audit was conducted, all tax remarks were removed, and risks were minimized through the implementation of automated compliance control.
• Support for a real estate investment transaction:
  A fund entering the Cypriot commercial real estate market received not only classic legal due diligence, but also complete optimization of its tax structure. The result was a 16% reduction in tax payments and rapid approval of all agreements.

We love challenges that require unconventional thinking, and we value the trust of clients for whom Cyprus is more than just a jurisdiction. It is important to us that businesses feel confident even in times of change.