Cyprus Legal Opinions for Foreign Counsel

The opinion

The opinion, and who may give it

A Cyprus law opinion is a written statement by a Cyprus advocate, addressed to named parties, on questions of Cyprus law arising out of a transaction. It is not advice to the company. It is a document the recipients rely on when they decide whether to sign, to lend or to complete.

Only an advocate registered with the Cyprus Bar Association and holding a practising certificate may give it. A foreign firm cannot opine on Cyprus law, and an opinion from an accountant, a corporate services provider or a company secretary is not the same document, whatever it is called. That is usually why foreign counsel are instructed to find Cyprus counsel in the first place: the condition precedent list asks for a legal opinion, and only a member of the Cyprus Bar can satisfy it.

The opinion is written for lawyers. It states what is opined on, what is assumed, what is qualified and who may rely on it, and everything outside those boundaries is outside it, deliberately and on the face of the document.

When it is needed

When foreign counsel ask for one

The request usually arrives at one of a small number of moments in a transaction.

A cross-border financing where a Cyprus company is borrower, guarantor or security provider, and the finance parties want an opinion delivered as a condition precedent.
Security documents governed by Cyprus law, or foreign law security over assets or shares situated in Cyprus.
An acquisition where a Cyprus company is the target, the seller or the buyer, and the share purchase agreement requires an opinion at signing, at completion, or both.
Confirmation of the capacity of a Cyprus company to enter into a transaction and of the authority of those signing for it.
Whether a contract governed by a foreign law will be recognised in Cyprus, and whether a foreign judgment or arbitral award against a Cyprus company can be enforced here.
Good standing confirmations, sought by a counterparty, a bank or a regulator.
Corporate reorganisations, including intra-group transfers and cross-border mergers with a Cyprus entity in the structure.
Trust matters where a Cyprus International Trust is a party or holds the relevant asset.

The common thread is that somebody outside Cyprus has to take a decision that turns on Cyprus law, and needs it stated by someone who can be held to it.

Scope

What the opinion covers

Scope is agreed before drafting begins and is set by the transaction rather than by a standard form. Most opinions on a Cyprus company address some or all of the following.

Due incorporation and existence. That the company is incorporated and validly existing under the Companies Law, Cap. 113, and that no steps have been taken, so far as the searches show, to strike it off or wind it up.
Capacity. That entering into the transaction is within the company's objects and powers under its memorandum and articles.
Corporate authority. That the board and, where required, the shareholders have taken the resolutions necessary to authorise the transaction and its execution.
Due execution. That the documents have been executed in a manner that binds the company under Cyprus law.
No conflict. That performance does not conflict with the constitutional documents or, so far as we opine, with Cyprus law.
Validity and enforceability. That the obligations are valid, binding and enforceable against the company, subject to the qualifications set out in the opinion.
Choice of foreign law and jurisdiction. That the choice of a foreign governing law and of a foreign forum will be recognised and given effect by a Cyprus court.
Recognition and enforcement. That a judgment or an arbitral award obtained abroad can be recognised and enforced in Cyprus, and by what route.
Filings and consents. That no consent, licence or filing in Cyprus is required to make the documents enforceable, or, where one is, what it is.
Formalities. That no stamp duty, registration or notarisation is required in Cyprus for validity or enforceability, or, where it is, what is needed and when.

Where security is taken over shares in a Cyprus company or over assets here, the opinion also addresses creation, perfection and the registration of charges at the Registrar of Companies, and the consequences of not registering in time.

Documents

What we need, and how long it takes

Opinions are quick when the papers arrive together and slow when they arrive one at a time. What we ask for at the outset is this.

The draft transaction documents in the form intended for signature, and the list of conditions precedent, so the opinion answers what is actually being asked.
The form of opinion required, if the finance parties or the buyer have one. Where they do not, we propose one.
Corporate documents from the Registrar of Companies: certificate of incorporation, certificates of directors and secretary, of registered office and of shareholders, and the memorandum and articles as currently in force.
Board minutes or resolutions approving the transaction and authorising execution, and shareholder resolutions where the articles or the transaction require them.
An incumbency certificate or director's certificate confirming the factual matters we are asked to assume.
The names of the addressees and of anyone else who is to be permitted to rely.

We run our own searches at the Registrar of Companies rather than relying on copies supplied to us, and the opinion is expressed as at the date and time of those searches. A first draft on a straightforward corporate transaction is usually with foreign counsel within a few business days of the papers being complete, and a signed opinion follows once the documents are in final form and the resolutions are passed. Where the structure is unusual, or where security or a regulated entity is involved, we say so when we scope the work rather than at the end of it.

If the company also needs a Cyprus presence for the transaction, that is separate work and we deal with it separately: an agent for service under our process agent service, or incorporation and the corporate housekeeping that goes with company formation in Cyprus.

Reliance

Assumptions, qualifications and reliance

Assumptions and qualifications are not boilerplate, and they are not there to narrow the opinion until it says nothing. They mark the line between what a lawyer can properly state and what he cannot know.

We assume matters of fact we could not verify without becoming a witness: the genuineness of signatures, that copies conform to originals, that the resolutions were properly convened and remain in force, and that parties other than the Cyprus company have capacity and authority under their own laws. Where an assumption matters to the recipient we say so, and take a director’s certificate rather than assume it silently.

Qualifications record the limits Cyprus law itself places on enforceability: insolvency and laws affecting creditors generally, the discretionary nature of equitable remedies such as specific performance and injunctions, limitation, and the rule that a Cyprus court will not give effect to a foreign law provision contrary to public policy in the Republic. Provisions expressed as conclusive evidence, or as liquidated damages, are enforced as Cyprus law allows and not as the drafting assumes.

Reliance is stated expressly. An opinion is addressed to named parties, commonly the borrower’s counterparty, the agent, the security trustee and the lenders from time to time under the facility, and it may be extended to permitted transferees where the finance documents contemplate them. We are content to address an opinion to a foreign lender and to permit reliance by successors and assigns where that is agreed in advance, and we would rather agree the reliance wording at the start than negotiate it on the day of closing.

Three limits are worth stating plainly. We do not opine on any law other than Cyprus law. We do not opine on questions of fact. We do not opine on tax unless that is expressly within the agreed scope and we have been given the facts to do it on.

The law

The Cyprus law the opinion rests on

The corporate limb of an opinion is governed by the Companies Law, Cap. 113, which supplies the rules on incorporation and existence, the effect of the memorandum and articles, the authority of directors, and the registration of charges. Contractual validity is a matter for the Contract Law, Cap. 149, read with the common law as it applies in Cyprus.

On judgments, the route depends on where the judgment comes from. A judgment given in an EU Member State is recognised and enforced under Regulation (EU) 1215/2012, the recast Brussels Regulation, which requires no declaration of enforceability. Judgments from a number of Commonwealth and other countries are dealt with under the Foreign Judgments (Reciprocal Enforcement) Law, Cap. 10, and under the bilateral conventions Cyprus has concluded. Where neither route is available, enforcement proceeds at common law.

On arbitration, Cyprus is a party to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, ratified by Law 84/1979. International commercial arbitration is governed by Law 101/1987, which follows the UNCITRAL Model Law, while domestic arbitration remains under the Arbitration Law, Cap. 4.

On documents executed abroad, Cyprus is a party to the Hague Convention of 5 October 1961 Abolishing the Requirement of Legalisation for Foreign Public Documents, which entered into force for Cyprus on 30 April 1973. A public document from another contracting state carrying an apostille is accepted without consular legalisation.

Instructing us

How to instruct us

Send the draft documents, the condition precedent list and the form of opinion if you have one, and tell us the closing date you are working to. We confirm whether we can act, agree the scope and the addressees, and quote a fixed fee agreed in advance before any work starts. We do not begin drafting on an open-ended basis.

Kleanthous & Platis LLC acts for foreign law firms and in-house teams as Cyprus counsel on a referred basis, and the client relationship on the wider transaction stays where it is. More on how we work with firms outside Cyprus is on our page for international law firms. Opinions are settled and signed by Klitos Platis, Advocate.

Please do not send confidential documents until we have run a conflict check and confirmed that we can act.

Questions

Questions we are asked

Can a Cyprus legal opinion be addressed to a foreign lender?

Yes. Opinions are commonly addressed to an agent, a security trustee and the lenders from time to time under a facility, and reliance can be extended to permitted transferees where the finance documents contemplate them. The addressees and the reliance wording are agreed before drafting rather than at closing.

How long does a Cyprus law opinion take?

On a straightforward corporate transaction, a first draft is usually with foreign counsel within a few business days of the papers being complete. The signed opinion follows once the documents are final and the resolutions are passed. Security, regulated entities and unusual structures take longer, and we say so when we scope the work.

Do we need an apostille on Cyprus corporate documents?

It depends on where the documents are going, not on the opinion. Cyprus is a party to the Hague Convention of 5 October 1961, so a Cyprus public document carrying an apostille is accepted in another contracting state without consular legalisation. For the opinion itself we work from our own searches at the Registrar of Companies.

Can you opine on English law provisions in the documents?

No. A Cyprus advocate opines on Cyprus law only. Where documents are governed by a foreign law, we opine on whether a Cyprus court will give effect to that choice and on the Cyprus law consequences, and foreign counsel opine on the governing law itself.

Is a legal opinion the same as a certificate of good standing?

No. A certificate of good standing is issued by the Registrar of Companies and records a registry position. An opinion is a lawyer's reasoned statement on questions of Cyprus law, addressed to named parties who rely on it. A transaction sometimes requires both.

Do you issue capacity and authority opinions on their own?

Yes. Where the only question is whether a Cyprus company has the capacity to enter into a transaction and whether those signing are authorised to do so, the opinion is scoped to that and no further.