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Announcement: KIKLON PARTNERS and AM MALLAS LLC Advise on Multi Million Euro International Transactions
KIKLON PARTNERS and AM MALLAS LLC have successfully advised on a series of multi million euro transactions involving the purchase and sale of shares in Cyprus companies holding significant property assets in Cyprus and other European jurisdictions.
The transactions involved two separate Cyprus companies, with a combined value exceeding €7 million, with the share purchase consideration of over €3 million and a portfolio comprising both commercial and residential properties.. The work combined Share Purchase Agreement drafting, legal and commercial advisory, coordination of financial accounts, valuation preparation and review, corporate administration and full transaction support.
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Key Takeaways
| Transaction Stage | What Clients Need to Consider | Why It Matters |
|---|---|---|
| Before entering into an SPA | Confirm the ownership and beneficial ownership structure, conduct legal and financial due diligence, review the corporate records, financial statements, agreements, assets and liabilities, obtain appropriate property valuations, identify any required approvals or waivers and consider whether Cyprus Capital Gains Tax may apply to a property rich company. | The parties should understand the company, its properties, financial position, obligations and potential tax exposure before agreeing to proceed with the transaction. |
| During SPA drafting and negotiation | Clearly document the shares being transferred, the purchase price, payment arrangements, warranties, representations, indemnities, disclosures, conditions, completion requirements and responsibility for identified liabilities. Findings from the legal due diligence, financial review and property valuations should be properly reflected in the SPA and supporting documentation. | The SPA records the commercial agreement and determines how legal, financial, property and tax risks are allocated between the parties. |
| After signing and completion | Complete the required board and shareholder approvals, execute the instruments of transfer, issue or cancel the relevant share certificates, update the register of members and other statutory records, submit form HE57 to the Cyprus Registrar of Companies within the applicable 14 day period, review and update the UBO Registry where required and obtain any necessary tax clearance. Any required notifications to foreign advisers or international land registries should also be completed. | These corporate, regulatory and tax steps are necessary to properly implement the transaction, record the new ownership position and complete any outstanding compliance requirements. |
Cyprus Share Purchase Agreements from Initial Review to Completion
As a Cyprus law firm and Cyprus Corporate Services provider, AM MALLAS LLC and KIKLON Partners together take over transactions from the initial request through to signing, completion and the required follow up actions. Our objective is to keep the process moving smoothly while protecting our clients’ interests and ensuring that all parties and professional advisers remain properly coordinated.
Our work extended beyond legal drafting and corporate law guidance. It included regular liaison with family offices, foreign law firms representing the relevant parties, accountants, property valuers, banks and advisers across several jurisdictions. By bringing the legal, corporate and administrative work together, we maintain a complete view of the transaction and manage each stage through one coordinated Cyprus based team.
Legal Due Diligence for Cyprus Share Purchase Agreements
Legal due diligence forms a central part of every share purchase transaction. Our review includes the corporate records of the relevant companies, their shareholding and beneficial ownership structures, financial statements and obligations, constitutional documents, current agreements, property interests, liabilities and any other matters that could affect the proposed acquisition.
This is particularly important in a share acquisition because the purchaser acquires the company together with its assets, obligations and existing liabilities. The due diligence process allows these matters to be identified before completion and properly addressed within the transaction documents.
Share Purchase Agreement Drafting and Negotiation
The main legal and commercial part of the engagement involved the drafting, review and negotiation of the Share Purchase Agreements. Each SPA was prepared to reflect the commercial agreement reached between the parties, including the number and class of shares being transferred, the purchase price, payment terms, warranties, representations, indemnities, disclosures and completion requirements.
The agreements also addressed the allocation of risk, including previous, existing and future matters, and the steps each party was required to complete before, during and after signing. Matters identified during due diligence were dealt with through appropriate warranties, specific indemnities, completion conditions and supporting documentation. This ensured that the final SPA reflected the actual legal, corporate and financial position of each company, rather than only the initial commercial understanding.
Corporate Administration and Transaction Documentation
KIKLON Partners provided the required corporate administration and advisory support throughout the transactions, ensuring that the agreed transfers were properly approved, completed and recorded.
This included the preparation and review of board resolutions, shareholder resolutions, instruments of transfer, share certificates, waivers, approvals and all supporting transaction documentation. The internal registers, minute books and corporate records were also reviewed and updated to ensure that the transfer of ownership was correctly implemented.
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Property Valuations and Financial Review
As the companies held significant property assets, our work included coordinating the preparation of property valuations and reviewing valuation reports relating to commercial and residential properties in Cyprus and abroad. We also coordinated with accountants to review the financial accounts up to the signing date, including cash balances, receivables, liabilities, rental income and ongoing expenses.
Our role was not limited to receiving the final valuation figure. We reviewed the information and assumptions used by the property valuers, including current rental income, expected future rental income, occupancy arrangements and ongoing property expenses. This helped ensure that the valuations were based on complete and accurate information and that the agreed transaction value properly reflected the assets and financial position of each company.
Capital Gains and Property Rich Companies
One issue that is often overlooked is that a share sale may give rise to Cyprus Capital Gains Tax where the company directly owns immovable property situated in Cyprus. For indirect ownership structures, the rules applicable from 1 January 2026 may also bring a disposal within scope where at least 20% of the market value of the shares derives from Cyprus immovable property. Capital Gains Tax is imposed at a rate of 20% on the relevant gain, subject to the facts of the transaction and any applicable double tax treaty.
The position must therefore be reviewed before completion, taking into account the location and value of the properties, whether ownership is direct or indirect, the wider ownership structure and the tax residence of the exiting shareholder or ultimate beneficial owner.
Example of Cyprus CGT calculations for a property rich company that includes cash and other assets
| Calculation | Amount | CGT Treatment |
|---|---|---|
| Total consideration received for the shares | €6,000,000 | Total commercial value of the share sale |
| Amount attributable to Cyprus immovable property | €3,400,000 | Relevant for Cyprus Capital Gains Tax |
| Amount attributable to cash and other assets | €2,600,000 | Not included in the property related gain |
| Acquisition value attributable to the property element | €1,600,000 | Deducted from the property related proceeds |
| Relevant capital gain | €1,800,000 | €3,400,000 less €1,600,000 |
| Indicative Capital Gains Tax at 20% | €360,000 | Before applicable exemptions and allowable deductions |
Completion and Ongoing Compliance
Our work continued after the Share Purchase Agreements were signed. The teams handled the relevant Cyprus Companies Registrar filings, updated the internal corporate records and registers, reviewed the UBO Registry position and coordinated any required updates with international land registries and foreign advisers.
Under section 113A of the Cyprus Companies Law, a transfer of shares in a private company must be notified to the Registrar of Companies within 14 days from the date on which the transfer is entered in the company’s register of members. The deadline therefore runs from the internal registration of the transfer and not simply from the date on which the SPA is signed.
What KIKLON Partners and AM MALLAS LLC Do
Our legal and corporate services in relation to share acquisitions, corporate structuring Cyprus and international transactions include:
- Legal due diligence
- Share Purchase Agreement drafting, review and negotiation
- Preparation and amendment of Memorandum and Articles of Association
- Corporate structuring and transaction planning
- Data room preparation
- Feasibility studies and transaction assessments
- Coordination and review of property valuations
- Preparation of internal corporate documentation
- Board and shareholder resolutions
- Instruments of transfer and share certificates
- Negotiation and representation on behalf of clients
- Corporate administration and Companies Registrar filings
- UBO Registry compliance
- Coordination with accountants, banks, valuers, family offices and foreign legal teams
The successful completion of these transactions demonstrates our strength in Share Purchase Agreement drafting, legal due diligence, corporate administration and Cyprus legal and corporate advisory.
Through one coordinated service, we support international clients in handling complex legal, commercial and corporate matters from the first discussion through to completion and ongoing compliance.
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