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Ease of Doing Business in

Cyprus

Cyprus Download Profile (1731.5KB, pdf)
Region Europe & Central Asia
Income Category High income
Population 1,165,300
GNI Per Capita (US$) 25,930
City covered Nicosia

190

1

DB 2017 Rank

1

100

DB 2017 DTF (% points)

  • local_library
  • group
Topics DB 2017 Rank DB 2016 Rank info_outline Change in Rank DB 2017 DTF (% points) info_outline DB 2016 DTF (% points) info_outline Change in DTF (% points) info_outline
Overall 45 41 down
4
72.65 72.48 down
0.17
Starting a Business 53 60 up
7
91.21 89.19 up
2.02
Dealing with Construction Permits 125 122 down
3
64.01 63.95 up
0.06
Getting Electricity 63 68 up
5
78.33 75.18 up
3.15
Registering Property 91 89 down
2
63.43 63.39 up
0.04
Getting Credit 62 42 down
20
60.00 65.00 down
5.00
Protecting Minority Investors 27 25 down
2
66.67 66.67
-
Paying Taxes 34 36 up
2
84.45 83.74 up
0.71
Trading across Borders 45 45
-
88.44 88.44
-
Enforcing Contracts 139 139
-
48.59 48.59
-
Resolving Insolvency 16 16
-
81.38 80.60 up
0.78

Positive= Doing Business reform making it easier to do business.Negative= Change making it more difficult to do business.

DB 2017 Rank:

91

DB 2016 Rank:

89

Change in Rank:

down2

DB 2017 DTF (% points):

63.43

DB 2016 DTF (% points):

63.39

Change in DTF (% points):

up0.04

STANDARD PROPERTY TRANSFER
Property value EUR 1,038,432
City Nicosia
Indicator Cyprus Europe & Central Asia OECD high income
Procedures (number) info_outline 7 5.3 4.7
Time (days) info_outline 9 20.6 22.4
Cost (% of property value) info_outline 10.4 2.5 4.2
Quality of the land administration index (0-30) info_outline 23 19.8 22.7
  • Measure of efficiency
    No. Procedure Time to Complete Associated Costs
    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 advisable to perform due diligence before entering into this type of transaction. In order 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.

    1 day 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, information of bank loan (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 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 onwards. 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. In particular, 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) etc

    1 day EUR 50
    4

    Pay transfer Taxes

    Agency: Tax Department

    In order 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) Immovable Property Tax; (2) Stamp Duty (the Director of which is also the Stamp duty Commissioner): Stamp duty is paid based on the purchase price; and (3)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 Payment of the 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


    Payment of the Immovable Property Tax as per following fee schedule:

    EUR 1 - 40,000=0.6%

    EUR 40,001 - 120,000=0.8%

    EUR 120,001 - 170,000=0.9%

    EUR 170,001 - 300,000=1.1%

    EUR 300,001 - 500,000=1.3%

    EUR 500,001 - 800,000=1.5%

    EUR 800,001 - 3,000,000=1.7%

    Over 3,000,000=1.9%
    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 cost
    * 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 cost
    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.
    http://www.moi.gov.cy/moi/citizenscharter/CitizensCharter.nsf/All/EC412A60FFCEF883C2256E55001FB2CB?OpenDocument

    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 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%

    * Takes place simultaneously with previous procedure.

  • Measure of quality
    Answer Score
    Quality of the land administration index (0-30) 23.0
    Reliability of infrastructure index (0-8) 7.0
    What is the institution in charge of immovable property registration? The Department of Lands and Surveys
    In what format are the majority of title or deed records kept in the largest business city—in a paper format or in a computerized format (scanned or fully digital)? Computer/Fully digital 2.0
    Is there an electronic database for checking for encumbrances (liens, mortgages, restrictions and the like)? Yes 1.0
    In what format are the majority of maps of land plots kept in the largest business city—in a paper format or in a computerized format (scanned or fully digital)? Computer/Scanned 1.0
    Is there an electronic database for recording boundaries, checking plans and providing cadastral information (geographic information system)? Yes 1.0
    Is the information recorded by the immovable property registration agency and the cadastral or mapping agency kept in a single database, in different but linked databases or in separate databases? Single database 1.0
    Do the immovable property registration agency and cadastral or mapping agency use the same identification number for properties? Yes 1.0
    Transparency of information index (0–6) 2.5
    Who is able to obtain information on land ownership at the agency in charge of immovable property registration in the largest business city? Only intermediaries and interested parties 0.0
    Is the list of documents that are required to complete any type of property transaction made publicly available–and if so, how? Yes, online 0.5
    Link for online access: http://www.moi.gov.cy/MOI/DLS/dls.nsf/All/A2DA28B782CD9C3E42257BEA0029B510?...
    Is the applicable fee schedule for any property transaction at the agency in charge of immovable property registration in the largest business city made publicly available–and if so, how? Yes, online 0.5
    Link for online access: http://www.moi.gov.cy/MOI/DLS/dls.nsf/dmltransfer_en?openform Government G...
    Does the agency in charge of immovable property registration commit to delivering a legally binding document that proves property ownership within a specific time frame–and if so, how does it communicate the service standard? Yes, in person 0.0
    Link for online access:
    Is there a specific and separate mechanism for filing complaints about a problem that occurred at the agency in charge of immovable property registration? No 0.0
    Are there publicly available official statistics tracking the number of transactions at the immovable property registration agency? Yes 0.5
    Number of property transfers in the largest business city in 2015: 8204
    Who is able to consult maps of land plots in the largest business city? Anyone who pays the official fee 0.5
    Is the applicable fee schedule for accessing maps of land plots made publicly available—and if so, how? Yes, online 0.5
    Link for online access: http://www.moi.gov.cy/moi/DLS/dls.nsf/All/36B360E69A931B0CC2257D630027C105/...
    Does the cadastral or mapping agency commit to delivering an updated map within a specific time frame—and if so, how does it communicate the service standard? Yes, in person 0.0
    Link for online access:
    Is there a specific and separate mechanism for filing complaints about a problem that occurred at the cadastral or mapping agency? No 0.0
    Geographic coverage index (0–8) 8.0
    Are all privately held land plots in the economy formally registered at the immovable property registry? Yes 2.0
    Are all privately held land plots in the largest business city formally registered at the immovable property registry? Yes 2.0
    Are all privately held land plots in the economy mapped? Yes 2.0
    Are all privately held land plots in the largest business city mapped? Yes 2.0
    Land dispute resolution index (0–8) 5.5
    Does the law require that all property sale transactions be registered at the immovable property registry to make them opposable to third parties? Yes 1.5
    Is the system of immovable property registration subject to a state or private guarantee? No 0.0
    Is there a specific compensation mechanism to cover for losses incurred by parties who engaged in good faith in a property transaction based on erroneous information certified by the immovable property registry? No 0.0
    Does the legal system require a control of legality of the documents necessary for a property transaction (e.g., checking the compliance of contracts with requirements of the law)? Yes 0.5
    If yes, who is responsible for checking the legality of the documents? Registrar; Notary.
    Does the legal system require verification of the identity of the parties to a property transaction? Yes 0.5
    If yes, who is responsible for verifying the identity of the parties? Registrar; Notary.
    Is there a national database to verify the accuracy of identity documents? Yes 1.0
    For a standard land dispute between two local businesses over tenure rights of a property worth 50 times gross national income (GNI) per capita and located in the largest business city, what court would be in charge of the case in the first instance? Nicosia District Court
    How long does it take on average to obtain a decision from the first-instance court for such a case (without appeal)? Between 1 and 2 years 2.0
    Are there any statistics on the number of land disputes in the first instance? No 0.0
    Number of land disputes in the largest business city in 2015:
    Equal access to property rights index (-2–0) 0.0
    Do unmarried men and unmarried women have equal ownership rights to property? Yes 0.0
    Do married men and married women have equal ownership rights to property? Yes 0.0