The rapid spread of coronavirus and the increase in confirmed cases in Cyprus has led the Republic of Cyprus to take additional and more strict preventive measures which have inevitably affected business and employees.

Therefore, the Cyprus Government has adopted the below measures to support the businesses and employees affected:

A) Full Suspension of Work Scheme:

Applies to businesses that fall under the provisions of the Ministerial Decrees and which had to shut down their operations, including construction sites (from 23/03 onwards), unless the said Companies have found alternative ways of working. Companies that have no business activity, except from the essential management processes.

The Scheme provides that for business with more than 9 employees there is a 90% coverage of subsidy (10% must first include managers, shareholders with more than 20% and who work in the company, and so on). Businesses with up to 9 employees there is a 100% coverage.

Companies whose operations are connected to those companies that shut down due to the Minister of Health Decrees will also be entitled to participate to the full work  suspension plan, if they have experienced more than 80% reduction in turnover (as this is calculated based on the relevant guidelines).

It is noted that companies that will apply to the Full Suspension of Work Scheme but do not satisfy the terms and conditions, but they likely satisfy the conditions of the
Partial Suspension of Work Scheme will be examined based on the terms of the latter.

B) Partial Suspension of Work Scheme:

Applies to businesses that that do not fall under the compulsory suspension of work and suffer a turnover reduction of more than 25% comparing to the previous year.
In order for a company or self-employed person to calculate the reduction in turnover, any transactions that happened before 16 March 2020 will not be counted in the estimation of turnover (even if the invoice had been raised after 16 March 2020 or if payment had been received after 16 March 2020).

The Scheme provides that for businesses with up to 50 employees there is a 75% coverage of subsidy and for businesses with over 50 employees there is a 60&% coverage (25% or 40%, respectively, must first include managers, shareholders with more than 20% and who work in the company, and so on).


i) The duration of the Schemes is for the period 16/03/2010 until 12/06/2020. The Minister of Labour noted that, provided that certain conditions will apply, the support to business will continue for an additional four months after 12/06/2020.

ii) Employees eligible to participate in the Schemes will be entitled to unemployment benefit. The coverage is 60% of the 2018 insurable units’ value (with exceptions), with a maximum of €1.214. The employee should not receive two benefits concurrently.

iii) Employees who did not have insurable units within 2018 and are therefore entitled to receive the special unemployment allowance based on their insurable income of January 2020 (or earlier in case this does not apply) will be entitled to 40% of their insurable income and not 60%.

iv) To participate in the Schemes, the business must have not terminated any employee for financial reasons from 1st March and onwards and will be obliged to not terminate any employee for the period participating in the Scheme times 2 plus 1 month. Termination of employees that under the law no notice is required are permitted.

v) For Groups of companies (i.e. relationship between mother company and a subsidiary or connected company via a common shareholder) with separate Employer’s Registration with the Social Insurance Numbers all applications per Employer’s Registration Number for the full and/or partial suspension schemes will be considered as one application and the terms of the scheme(s) will be applied as though the Employer Registration Number was unified. It is pointed out that, for this to apply, all companies in the Group have to be engaged in the same activities (e.g. retail chain with many brands/companies, food chains with different brands, Group of restaurants with each restaurant being a different company and so on).

vi) Companies which are single legal entities but have more than one Employer’s Registration Number with the Social Insurance will be treated as though they have a single Employer’s Registration Number, regardless of whether their applications have been submitted per Employer Registration Number.

vii) All applications will be treated in a first come – first served basis, provided that employees insert their banking data/IBAN in the system and the applications are properly filled.

viii) In case that more than one application is submitted regarding the same period for each Scheme, only the most recent will be taken into consideration and examined, unless such application is withdrawn. 

ix) All business participating in the Schemes must keep for a period of at least two years from the date of submission, all information, files, documents and/or evidence for the terms and conditions of the Schemes.

C) Special Sickness benefit

Employees who:

(a) have specific health problems and which are included on the List published by the Ministry of Health;

(b) fall into compulsory absence from work;

(c) Persons between the ages of 63 - 65, who do not receive statutory pension and continue to work and fall into Categories 1 and 2 of the Ministry of Health Guide on vulnerable groups.

D) Special Leave to Parents 

Paid to parents who work both in the private and public/wider public sector and is granted for the care of children up to 15 years of age, unless it is a parent of a person with disabilities then no age limit applies. 

E) Cypriot General Healthcare System (“GHS”)

Suspension of the obligation to contribute the additional payment to the Cypriot General Healthcare System (“GHS”) for two months.


Temporary VAT payment deferral to 10 November 2020 suspending the additional 10% tax penalty, interest and criminal sanctions on VAT payable for taxable persons promptly submitting their VAT returns applicable for: 

• The majority of entities (except from the list of sectors that have been expressly excluded in the amending law with reference to their economic activity coding) regardless of turnover volume, total outputs or their respective decreases;

• VAT quarters December 2019 – 29 February 2020, January – March 2020 and February – April 2020;

• The deferrals apply as long as those entities timely submit their VAT returns for the above quarters, i.e., by 10 April, 10 May and 10 June 2020 accordingly major Excluded Sectors from above deferral comprise those that did not suffer material reduction during the crisis and collect normally VAT on sales in cash. Exempted business areas depend on economic activity coding found in VAT Registration Certificates of taxable persons.

G) Loans

The obligation on all borrowers to pay principal and interest instalments in their credit facilities granted by banking institutions is suspended for 9 months. Borrowers include physical persons, public legal persons, self-employed and businesses all of whom have been meeting their obligations. The total of principal and interest instalments suspended shall not be immediately due and payable at the expiration of the decree.

The procedure for showing interest in participating is simple, by completing a special form and sending it by post, electronic mail or fax to the banks.

You can find more details on how the credit facility suspension scheme will work on our legal briefing here

H) Controlled Rents Law

Recovery of possession is suspended by 31st May 2020, provided that the tenants fully complied with their rent payment obligations by February 2020.

Charalambos G. Prountzos
Partner- Managing Director and
Head of EY Law for CESA and
Law and Funds Services Leader of
ΕΥ Cyprus

Demetris Kailis
Lawyer – Manager in the Litigation

Tania Tofaridou
Lawyer in the Litigation