Law 28(I)/2025 raised every size threshold in section 141A of Cap. 113 by a quarter, and applied it to financial years beginning on or after 1 January 2023.
The size of a Cyprus company is not a description. It is a legal class, it is set by section 141A of the Companies Law, Cap. 113, and it decides which accounting framework the directors must apply, what the notes have to disclose, and which consolidated documents a group can leave out.
In March 2025 every monetary threshold in that section went up by a quarter, and the change was made to apply to financial years beginning on or after 1 January 2023. Two financial years that had been closed, audited and filed were retrospectively measured against a different line.
The four classes
Each class is measured on three criteria at the balance sheet date: the balance sheet total, meaning the total value of the assets without deducting liabilities; the net turnover; and the average number of employees during the year. A company belongs to a class if it does not exceed the limits of at least two of the three. The largest class is defined the other way round.
| Class | Balance sheet total | Net turnover | Employees | |---|---|---|---| | Very small | €450,000 | €900,000 | 10 | | Small | €5,000,000 | €10,000,000 | 50 | | Medium (other than small) | €25,000,000 | €50,000,000 | 250 | | Large (exceeds two of three) | €25,000,000 | €50,000,000 | 250 |
Law 28(I)/2025 did the arithmetic. For small companies it replaced €4,000,000 with €5,000,000 and €8,000,000 with €10,000,000. For medium and large companies it replaced €20,000,000 with €25,000,000 and €40,000,000 with €50,000,000. It made the same six substitutions again in section 141A(2), which does the same job for groups of companies, and twice more in Regulation 1(1) of the Thirteenth Schedule. The employee counts were not touched.
The two year rule
The proviso to section 141A(1) is the part that decides when any of this bites. Where a company, at the balance sheet date, exceeds or ceases to exceed the limits of two of the three criteria, the consequence follows only if that has been the position for at least two consecutive financial years.
One exceptional year does not move a company up a class, and one poor year does not move it down. It also means that a threshold change reaching back to 2023 is not a question about a single set of accounts. It is a question about a pair of them.
What being small actually gets you
Not an audit exemption. Nothing in section 141A or in the amending Law touches the obligation to have accounts audited, and it is worth saying plainly because the classes are often described as though they did.
What they change is the framework. Section 142(1)(a1) allows the directors of a small company to prepare the full set of financial statements under either the International Financial Reporting Standards or the Financial Reporting Standard for small-sized entities. A company that is not small has no such choice. Section 143(2) then treats faithful application of either as the route to a true and fair view.
At group level, section 151(b) exempts small groups and medium groups from preparing a consolidated management report, unless one of the connected companies is a public interest entity, and Regulation 8(1) of the Thirteenth Schedule carries the same exemption for the consolidated report.
The standard the small framework is waiting for
Law 2(I)/2026 adds a Sixteenth and a Seventeenth Schedule to Cap. 113. They are the small company accounting framework in full: the balance sheet and profit and loss layouts, the recognition and measurement principles, the treatment of fixed and current assets, the revaluation reserve and what may and may not be distributed out of it, financial instruments at fair value, and the list of what a small company must disclose in its notes.
It is not yet in force. Section 7(1) provides that the Law comes into force on 1 January of the year following the date on which the Financial Reporting Standard for small-sized entities is published in the Official Gazette. Section 7(2) brings section 5 into force on publication of the Law itself. Until the standard is gazetted, the rest of it sits in the statute book and waits.
Where sustainability reporting arrives
Size decides that too. Law 162(I)/2025 implements Directive (EU) 2022/2464 on corporate sustainability reporting, together with Directive (EU) 2025/794, which postponed several of the application dates. Under section 396, small companies and medium companies whose transferable securities are admitted to trading on a regulated market are brought in for financial years beginning on 1 January 2028 or later.
What to do about it
If your company was near a line in 2023 or 2024, the class it was in then may not be the class the current figures put it in, and the framework it applied and the notes it gave may not be the ones section 143 now points to. That is a question to settle before the next set of accounts is signed rather than after a regulator asks.
Questions we are asked
What decides the size of a Cyprus company?
Section 141A of the Companies Law, Cap. 113. It sets four classes and each is measured on three criteria at the balance sheet date: the balance sheet total, meaning the total value of assets without deducting liabilities, the net turnover, and the average number of employees during the financial year. A company falls into a class if it does not exceed the limits of at least two of the three. The exception is the largest class, which is defined the other way round: a large company is one that exceeds at least two of the three.
What are the current figures?
Very small companies: EUR 450,000 balance sheet total, EUR 900,000 net turnover, 10 employees. Small companies: EUR 5,000,000, EUR 10,000,000, 50 employees. Medium companies, meaning companies other than small ones: EUR 25,000,000, EUR 50,000,000, 250 employees. Large companies exceed at least two of EUR 25,000,000, EUR 50,000,000 and 250 employees.
What did Law 28(I)/2025 change?
It raised every monetary threshold in section 141A by a quarter and left the employee counts alone. For small companies the balance sheet total went from EUR 4,000,000 to EUR 5,000,000 and net turnover from EUR 8,000,000 to EUR 10,000,000. For medium and large companies the balance sheet total went from EUR 20,000,000 to EUR 25,000,000 and net turnover from EUR 40,000,000 to EUR 50,000,000. The same six substitutions were made again in subsection (2), which does the same job for groups, and in Regulation 1(1) of the Thirteenth Schedule.
When did that take effect?
Section 3 of the amending Law added a new subsection (5) to section 372A: the provisions apply for financial years beginning on 1 January 2023 and thereafter. The Law itself was published in Official Gazette No. 5030 on 28 March 2025, so it reaches back over two financial years that were closed and filed before it existed.
Does crossing a threshold change my class immediately?
No, and this is the provision people miss. The proviso to section 141A(1) says that where a company exceeds or ceases to exceed the limits of two of the three criteria, the consequence follows only if that has happened for at least two consecutive financial years. One good year does not move you up and one bad year does not move you down.
What actually changes if my company is small?
The accounting framework. Section 142(1)(a1) allows the directors of a small company to prepare the full set of financial statements under either the International Financial Reporting Standards or the Financial Reporting Standard for small-sized entities, where a company that is not small has no such choice. Section 143(2) then treats compliance with either as the route to a true and fair view.
And if it is part of a group?
Section 151(b) exempts small groups and medium groups from the obligation to prepare a consolidated management report, unless one of the connected companies is a public interest entity. Regulation 8(1) of the Thirteenth Schedule carries the same exemption for the consolidated report.
What is the Financial Reporting Standard for small-sized entities?
A domestic accounting framework being built for the companies that qualify. Law 2(I)/2026 adds a Sixteenth and a Seventeenth Schedule to Cap. 113 setting out the principles, the format and the content of annual financial statements for small companies: the balance sheet and profit and loss layouts, the recognition and measurement rules, the revaluation reserve, financial instruments at fair value, and what has to appear in the notes.
Is Law 2(I)/2026 in force?
Not yet, apart from one section. Section 7(1) provides that the Law comes into force on 1 January of the year following the date on which the Financial Reporting Standard for small-sized entities is published in the Official Gazette. Section 7(2) brings section 5 into force on publication of the Law itself. So the framework exists in the statute book and waits on the standard being gazetted before it applies.
Does size affect sustainability reporting?
Yes, and it is phased. Law 162(I)/2025 implements Directive (EU) 2022/2464 on corporate sustainability reporting together with Directive (EU) 2025/794, which postponed several of the application dates. Under section 396, small companies and medium companies whose transferable securities are admitted to trading on a regulated market come into the regime for financial years beginning on 1 January 2028 or later.
Does being small remove the audit?
No. Nothing in section 141A or in the amending Law touches the obligation to have accounts audited. The size classes decide which accounting framework applies, what has to be disclosed and which consolidated documents can be omitted. They are not an audit exemption.
Why does a change reaching back to 2023 matter now?
Because the class is measured over two consecutive financial years. A company that was medium on the old figures for 2023 and 2024 may be small on the new ones for the same two years, which changes the framework it should have applied and what its notes should have disclosed. That is worth checking before the next set is signed rather than after.
Sources
- Companies Law, Cap. 113, consolidated text, section 141A
- Companies (Amending) Law of 2025, 28(I)/2025, Official Gazette No. 5030, 28 March 2025
- Companies (Amending) Law of 2026, 2(I)/2026, Official Gazette No. 5071, 6 February 2026
- Companies (Amending) (No. 3) Law of 2025, 162(I)/2025, Official Gazette No. 5051, 29 July 2025
This article is provided for general information purposes only and does not constitute legal advice.
Klitos Platis
Advocate, Partner
Kleanthous & Platis LLC, Nicosia · Published 25 August 2026
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