Cyprus places cap on stamp duty to attract bond issues

The Cyprus House of Representatives has unanimously approved an amendment sent back to the House by President Tassos Papadopoulos, placing a maximum cap of CYP 10.000 or EUR 17.000 as stamp duty on transactions over CYP 5 mln or EUR 8.5 mln.

Papadopoulos said the amended Company Law wasn’t compatible with the relative EU directive, which forces companies to maintain unified monetary systems.
The President said that transactions worth over CYP25 mln would have to pay a duty disproportionately lower than the duty imposed on smaller transactions, violating the principle of proportionality as provided by the Constitution. The referral was unanimously accepted by Parliament and the law was amended.

Accordingly, for transactions up to CYP 100.000, the stamp duty will be CYP 150, for transactions up to CYP 1 mln, the stamp duty will be CYP 1.950. For transactions up to CYP 2.5 mln, the stamp duty will be CYP 4.950 and up to CYP 5 mln, the stamp duty will be CYP 9.950. For transactions in excess of CYP 5 mln, the stamp duty will be at a maximum of CYP 10.000.

The move is seen as a late effort to allow Cyprus financial services firms and overseas firms based here to arrange bond issues, domestic but mostly overseas, which until recently were heading to other jurisdictions with a more friendly legislation.