Faced with the threat of referral to the EU's Court of Justice, Cyprus' Parliamentary Committee on Energy has initiated discussions on a harmonizing bill concerning cross-border conversions and divisions of companies. This legislation aims to establish rules for these corporate operations and to strengthen existing regulations regarding cross-border mergers.

A representative from the Ministry of Energy, Commerce, and Industry indicated that these rules are expected to enhance the legal security of cross-border operations before they take effect, thereby contributing to more secure legal compliance.

Furthermore, the goal is to lift restrictions on the freedom of establishment, protect interested parties, and exploit new opportunities for economic growth. Additionally, the bill promotes digitalization and significantly reduces legal and operational costs for companies.

There were strong reactions at the beginning of the session from deputies, as the deadline for legislative harmonization with the referenced EU Directive passed on January 31, 2023. Cyprus received a Warning Letter dated March 22, 2023, and subsequently a Reasoned Opinion dated November 16, 2023, which is the final stage before Cyprus' referral to the European Union Court of Justice.

The bill was submitted to the House of Representatives on January 18, 2024.

Froso Sotiriou from the Legal Service acknowledged the delay but noted that an extension had been secured from the European Commission until March 15. She emphasized the bill's importance and its many mandatory provisions, mentioning that the Legal Service completed its review in one month. She also noted that significant work had been done and expressed confidence that the House would not face major obstacles.

Irene Mylona-Chrysostomou, the Companies Registrar, acknowledged the bill's importance and the limited time given to the House for review. She noted the drafting process began in 2020 and had been complicated by the COVID-19 pandemic, leading to its assignment to a private lawyer due to understaffing in the Department.