A new deadline has been set for the employers’ obligation to register in Ergani the essential terms of employment contracts.

Cypriot employers must take immediate steps to comply with a mandatory employment registration requirement introduced by the Ministry of Labour & Social Insurance. Under a recently issued decree, all employers—regardless of size or industry—must register the essential terms of employment for every employee, both existing and new, in the Ergani information system, which is the official online platform of the social insurance department

Extended compliance deadline – what employers need to know

The original deadline for completing this process was 28 February 2025, but an extension has now been granted until 31 May 2025. While this additional time provides some breathing room, it is essential that employers act now to avoid last-minute administrative burdens or potential non-compliance risks.

To comply with the decree, employers must ensure they have an active employer account in Ergani and submit an “employment contract” for every employee—this applies to all workers, including full-time, part-time, and fixed-term employees, without exception.

The information that must be registered includes:
✔ job title, job description, and the employee’s area of specialization
✔ workplace location (both as stated in the employment contract and the actual workplace at the time of registration)
✔ employer details (including the official registered office and, for retail businesses, the type of business)
✔ employee details (personal information and identification data)
✔ start date of employment
✔ end date of employment (for fixed-term contracts only)
✔ terms and duration of the probationary period
✔ standard working hours per day/week
✔ indication if the employee’s working schedule is unpredictable
✔ agreed salary or wages and the frequency of payment (daily, weekly, monthly, or hourly)
✔ annual leave entitlement and method of allocation
✔ additional benefits, allowances, commissions, or cost-of-living adjustments
✔ for temporary employment businesses, the details of the indirect employer

Failure to ensure complete and accurate registration of this information may lead to penalties, complications in employment disputes, or compliance investigations.

Why does this matter?

This registration requirement is more than just an administrative formality—it is a major compliance measure aimed at increasing transparency in employment relationships across Cyprus. it reflects the government’s ongoing efforts to strengthen labour protections, reduce unfair employment practices, and combat undeclared or improperly reported work.

The Ergani system serves as a centralized database, allowing authorities to verify that employment agreements align with national labour laws and ensuring that workers’ rights—such as wages, working hours, and leave entitlements—are properly documented and enforceable. For businesses, compliance with this requirement is not only a legal obligation but also an opportunity to streamline HR and payroll processes by maintaining a clear and structured record of employment terms.

Moreover, non-compliance could carry legal and financial risks, particularly in cases where disputes arise over employment terms. Proper registration in Ergani can serve as crucial evidence in demonstrating an employer’s adherence to legal requirements.
Additionally, businesses operating in industries with frequent labour inspections or regulatory oversight—such as hospitality, retail, and construction—should be particularly vigilant in ensuring timely and accurate registration to avoid potential scrutiny from labour authorities.

What employers should do now

Although the deadline has been extended, businesses should use this time strategically to ensure full compliance before the final deadline of 31 May 2025. Key steps include:
• confirming whether an Ergani employer account is already active—if not, complete the registration process as soon as possible.
• reviewing and updating all employment contracts to ensure they contain the necessary information required by the decree.
• gathering missing employee data early to prevent last-minute delays in completing the registration.
• assigning HR or legal teams to oversee compliance and ensuring that all employment terms are recorded correctly.
• submitting registrations well in advance to avoid system congestion or last-minute technical issues as the deadline approaches.
• seeking legal or HR consultation if any uncertainties arise regarding employment terms, data entry, or technical aspects of the Ergani system.

For more information, please contact Thomas Christodoulou or your usual contact at Chrysses Demetriades & Co LLC.

Our firm has once again been highly ranked in the latest Legal 500 Europe, Middle East & Africa Guide, receiving Top Tier rankings in all major practice areas in Cyprus: Commercial, Corporate & M&A, Dispute Resolution, Maritime & Admiralty, and Real Estate & Construction and recommended firm in Banking & Finance, Employment and EU & Competition.

This recognition underscores the trust our clients place in us and the depth of expertise within our firm. Our sincere gratitude goes to our clients, peers and instructing firms around the globe for their continued confidence and support.

To access our rankings and Legal 500’s Editorial Commentary about our firm visit: https://www.legal500.com/firms/10119-chrysses-demetriades-co-law-office/c-cyprus/rankings

The Marshall Islands Quality Council (MIQC) held its spring meeting in Limassol, Cyprus in April 2024. Gathering biannually, the MIQC is a consultative consortium of shipowners, managers, industry experts, and leaders that gather for open dialogue and discussion to enhance Republic of the Marshall Islands (RMI) Registry operations. MIQC meetings focus on the sharing of information and experiences and raising awareness and knowledge on a diverse range of industry issues. The April 2024 MIQC meeting, hosted by MIQC member Michael McBride, at the offices of Chrysses Demetriades & Co. LLC, included MIQC members, invited guest speakers, and RMI Registry personnel. Rear Admiral (RADM) Kevin S. Cook, United States Coast Guard (Retired) chairs the MIQC.

RADM Cook opened the meeting, with presentations from International Registries, Inc.’s (IRI’s) President Bill Gallagher (Reston); Chief Maritime Officer Simon Bonnett (London); Chief Commercial Officer Theo Xenakoudis (Piraeus); and Vice President, Maritime Brian Green (Fort Lauderdale) covering updates and news on the RMI Registry. This high-level insight set the stage for topical discussions on regulatory updates and outcomes from the International Maritime Organization and port State control trends worldwide. Prabhat Jha, Managing Director, MSC Shipmanagement Cyprus Limited, made a special presentation to the group. Dr. Thilo Dückert, Head of Product Development, OceanScore GmbH presented on the European Union (EU) Emissions Trading System/FuelEU Maritime Regulation.

The meeting concluded with a panel discussion on the situation in the Red Sea moderated by Brian Green, Vice President, Maritime (Fort Lauderdale). Joining the discussion were Captain Lee Stuart, Maritime Liaison Officer, United States Naval Forces Central Command; Russell Pegg, Maritime Security Advisor, Oil Companies International Marine Forum; James Wilkes, Managing Director, Gray Page; and Christos Kottas, Executive Director, J.P. Morgan Asset Management.

MIQC meetings provide a platform for information sharing, open discussion, and strengthened relationships between industry stakeholders and the RMI Registry’s team of professionals.

* This Article was first published in MIQC Meets in Cyprus – IRI | International Registries, Inc.

In the context of Cyprus’ personal insolvency law (Cap. 5/the “Law”), the concept of mutual set-off plays a crucial role in the settlement of debts and credits between a bankrupt individual and other parties (art. 35). Under the Law, mutual debts, credits, and transactions between a bankrupt person and others who have verified or are claiming the verification of a debt in the bankruptcy process must be carefully examined.

What is mutual set-off?

At its core, mutual set-off refers to the process where two parties owe each other money. Rather than each party paying the full amount they owe to the other, the debts are offset against each other, and only the net balance is settled. For example, if Party A owes Party B €10,000 and Party B owes Party A €5,000, the debts are set off against each other, and only the remaining €5,000 will be paid by Party A to Party B. This process helps streamline the insolvency process and ensures that the transactions are fair.

How does set-off apply in bankruptcy?

When a bankruptcy order is issued against an individual under Cap. 5, the process of set-off becomes crucial. If there are mutual debts, credits, or other transactions between the bankrupt person and any creditor (or potential creditor) involved in the bankruptcy, an account must be drawn up to determine the net balance between the two parties. This ensures that only the outstanding balance, and not the full amounts, are claimed or paid by either side. Essentially, creditors and debtors do not settle the entirety of what they owe each other; they only settle the remaining balance once mutual debts are offset.

Legal implications of set-off in bankruptcy

One of the key points for legal professionals advising clients in this area is that set-off is subject to specific limitations under the Law. The latter clearly stipulates that creditors are not entitled to claim the benefit of set-off if they were aware of the bankrupt individual’s financial troubles at the time when credit was extended. Specifically, if the creditor knew that the bankrupt individual had committed an act of bankruptcy when the credit was granted, the creditor will not be able to use the mutual set-off provision to reduce or eliminate their debt.

This provision aims to prevent abuse in the system, where creditors might deliberately extend credit to a person they know is in financial distress, only to later use the set-off to reduce their claims in the event of bankruptcy. The Law seeks to avoid situations where creditors take advantage of the bankruptcy process by entering into transactions with knowledge of the debtor’s insolvency status.

Key legal considerations

For those involved in bankruptcy proceedings, some key legal considerations must be highlighted:

1. Verification of debts: Creditors involved in bankruptcy must ensure that their claims are verified properly in accordance with the bankruptcy order. Any errors in verification could impact their eligibility for set-off.
2. Awareness of the bankrupt’s situation: As noted, one of the most important factors for clients is the issue of knowledge. Creditors must be cautious about the timing of credit extension to the bankrupt individual. If the creditor knew of the bankrupt’s financial difficulties or had reasonable grounds to believe the individual had committed an act of bankruptcy, the creditor’s ability to use set-off may be compromised. The consequences of acting improperly can result in the loss of the right to set off mutual debts, which could lead to greater financial exposure in the event of a bankruptcy.
3. Proper documentation: It is crucial for both the bankrupt and the creditors to maintain clear and thorough records of mutual debts and credits. A detailed account of transactions will be necessary to calculate the balance due accurately and to ensure that all parties involved comply with the law.

Conclusion

For those navigating the complexities of personal insolvency law in Cyprus, the provisions surrounding mutual set-off offer significant legal considerations. While the set-off process can streamline debt recovery, it is subject to strict rules, particularly when a party is aware of the debtor’s insolvency. Creditors should seek expert legal advice which can guide them through these nuances to ensure compliance with the law, avoid potential abuse, and protect their financial interests.

For more information, please contact Charis Agapiou or your usual contact at Chrysses Demetriades & Co LLC.

Understanding Inspection Committees is vital for corporate insolvency proceedings. The role of creditors’ committees is complex but also critical. Their powers, such as approving settlements or determining the liquidator’s remuneration, are pivotal for fair outcomes. They act as a supervisory body, safeguarding creditors’ interests while ensuring the efficient and lawful handling of the liquidation process.

Table of Contents

1. Role of inspection committees: Core responsibilities
2. Challenges in balancing power and oversight
3. The importance of transparency in insolvency

Role of creditors: Core responsibilities

Among the responsibilities of the Inspection Committees are:

• Fixing the liquidator’s remuneration: This critical function ensures fair compensation for the liquidator without unduly depleting the company’s remaining assets. Yet, this task carries risks of potential conflicts of interest.
• Approval of business continuity: Committees evaluate the feasibility of continuing a company’s operations. This requires not only financial expertise but also an ability to forecast market conditions and assess risk.
• Legal decisions: They also approve or reject initiating or defending legal proceedings. Such decisions often have far-reaching financial implications for creditors and demand strategic foresight.

These powers demonstrate the committees’ importance in insolvency proceedings, but their complexity necessitates skilled decision-makers.

Challenges in balancing power and oversight

While the inspection committee wields significant authority, oversight mechanisms are necessary to prevent misuse. Several key issues emerge:

• Potential conflicts of interest: Committee members may prioritize personal gains over collective creditor interests, leading to biased decisions.
• Complexity in remuneration decisions: Setting liquidator remuneration often involves navigating contentious discussions, especially in high-value cases. Striking a balance between incentivizing efficiency and avoiding overpayment can be challenging.
• Monitoring liquidation proceedings: Reviewing liquidation accounts requires technical expertise, which some committee members might lack. Without sufficient knowledge, irregularities or inefficiencies may go unnoticed, jeopardizing the process.

Clear guidelines, alongside external audits and oversight, are essential to mitigate these challenges and ensure effective committee functioning.

The Importance of transparency in insolvency

Transparency is foundational to a robust insolvency framework. Cyprus’ provisions requiring regular reporting and independent audits are steps in the right direction, but gaps remain:

• Regular reporting: Requiring liquidators to submit timely reports ensures that creditors stay informed. However, delays or insufficient detail can undermine the process.
• Independent audits: Committees can mandate audits to verify the financial integrity of liquidation proceedings. While essential, audits introduce additional costs and rely on the availability of skilled professionals.
• Public accountability: The focus on creditor interests sometimes overlooks other stakeholders, such as employees or regulators. Broader disclosures could strengthen overall governance and transparency.

By prioritizing transparency, insolvency frameworks can better serve creditors, liquidators, and the wider economy, ensuring a fairer process for all.

Conclusion: Towards fair and transparent insolvency processes

The provisions governing inspection committees in Cyprus emphasize their crucial role in ensuring equitable outcomes during liquidation. However, challenges related to power dynamics, oversight, and transparency persist. Addressing these issues will require a combination of regulatory clarity, member training, and stricter enforcement.

Empowering committees with better resources and reinforcing transparency measures can foster trust in the insolvency process. These reforms will ultimately benefit all stakeholders, creating a fairer and more efficient system that inspires confidence in economic recovery and corporate accountability.

Keywords: inspection committees, creditors, insolvency, liquidator remuneration, transparency, audit, conflicts of interest

We are proud to sponsor a special event that honors the enduring spirit of Famagusta. Organized by Diastasis Cultural Association, the event will take place at Pattihio Theatre in Limassol on 24 January 2025 at 20:00.

The program will feature performances by renowned artists, including songs from the digital album “Αμμόχωστος Δεσμώτισσα 50 Χρόνια Κατοχής” (Famagusta Bound 50 Years of Occupation)-a powerful tribute to the occupied city of Famagusta, with music by celebrated composers and lyrics based on the poetry of Menelaos Avraam.

We invite you to join us for an unforgettable evening that blends artistry with meaningful remembrance, honoring our heritage and inspiring hope for the future.

Tickets are available on www.ticketmaster.cy

Admission is free.

Cyprus Securities and Exchange Commission (CySEC) has issued an announcement that Regulation (EU) 2023/1114 on Markets in Crypto-Assets (MiCAR) became applicable to issuers of Asset-Referenced Tokens (ARTs) and E-Money Tokens (EMTs) on 30 June 2024. Furthermore, the aforementioned Regulation will further extend to Crypto-Asset Service Providers (CASPs) on 30 December 2024.

According to the transitional measures outlined in Article 143(3) of MiCAR, CASPs that were operating under existing laws before 30 December 2024 will be allowed to continue providing services until 1 July 2026 or until such time as they are either granted or refused authorization under Article 63 of MiCAR. CASPs that register under the relevant national rules before 30 December 2024 may also benefit from this transitional period.

CySEC further advised that applications for CASP authorization under MiCAR will commence once the European Commission publishes the Regulatory Technical Standards (RTS) and Implementing Technical Standards (ITS). In the meantime, interested parties are encouraged to refer to the Draft Technical Standards issued by the European Securities and Markets Authority (ESMA) to prepare their applications in advance. Entities that intend to provide crypto-asset services in the European Union equivalent to the services and activities for which they are authorized under the Investment Services and Activities and Regulated Markets Law of 2017, or the Open-Ended Undertakings for Collective Investment (UCI) Law of 2012, or the Alternative Investment Fund Managers Law of 2013, should take into account Article 60 of MiCAR and the relevant ESMA guidance.

CySEC also stated  that it will no longer accept applications for CASP registration under the current national rules following this announcement, dated 17 October 2024. Notifications from entities established in the European Economic Area (EEA) and registered with EEA authorities for providing crypto-asset services must be submitted by 30 October 2024. Entities that meet this deadline will be allowed to continue operating on a cross-border basis in Cyprus during the transitional period.

For more information regarding your current status as CAPS or for information on how to obtain the said license please contact Demosthenes.mavrellis@demetriades.com or any other member of our team.

The Cyprus Securities and Exchange Commission (CySEC) has issued a circular clarifying the treatment of fractional share exposure under Cyprus’ Investment Services and Activities and Regulated Markets Law (Law 87(I)/2017), which transposes MiFID II. The circular provides important guidance for Cyprus Investment Firms (CIFs) offering fractional investments in shares and the regulatory framework they must follow.

Fractional share exposure allows investors to own a portion of a whole share, a trend that has gained popularity through online trading platforms. This circular specifically focuses on CIFs enabling fractional ownership through trust arrangements, where the CIF holds whole shares and allocates beneficial ownership fractions to multiple clients. Under these arrangements, CIFs create a fiduciary relationship with their clients, where the CIF retains legal ownership of the shares, but clients hold beneficial ownership based on their fractional exposure. These arrangements must comply with the asset safeguarding rules outlined in Law 87(I)/2017 and CySEC Directive DI87-01, which ensure the protection of client assets.

The circular stipulates that all rights associated with the shares—such as voting rights, dividends, and residual interest in the event of the issuer’s liquidation—must be proportionally granted to fractional owners based on their entitlement. CIFs are also required to document these trust arrangements clearly, ensuring transparency in ownership records. CySEC clarifies that fractional shares created due to corporate actions or those issued in fractional form by jurisdictions that allow such issuance are not covered by this circular. These shares are treated as whole shares and do not require trust arrangements to confer beneficial ownership.

CIFs offering fractional investments in shares are subject to regulatory requirements under both Law 87(I)/2017 and MiFIR. This includes the obligation to comply with MiFIR’s share trading rules and the requirement to provide clear, accurate, and non-misleading information to clients. CIFs must ensure that fractional holdings meet regulatory standards and that clients fully understand the nature of their investments.

For any needed clarifications please liaise with your usual contact person at Chrysses Demetriades & Co LLC.