Emerging Companies Market: Listing a Company in Cyprus Stock Exchange


It’s a new, innovative and “simple-regulated” market which it does not come under the mandatory provisions for regulated markets which impose strict listing requirements and continuous obligations. It is considered as a Multilateral Trading Facility (MTF) and operates in accordance with the Regulative Decisions adopted by the Cyprus Stock Exchange (“CSE”). The operation of the E.C.M. is expected to bring further development to the CSE operations and to increase its competitiveness. Transactions on the Emerging Companies Market are conducted as on regulated markets.

What are the advantages of a public company being listed in the ECM?

For the Companies

  • It is an alternative method for securing financing at competitive cost.
  • It promotes the recognition and reputation of the companies.
  • It prepares them to transfer to the regulated market, through the gradual increase of the dispersion and velocity of their shares.
  • For companies already listed, entry into the E.C.M. offers the possibility of flotation with simplified procedures as long as they first delisted from the regulated market, if they are unwilling or unable to cope with the cost of maintaining the increased obligations of the regulated markets.

For Investment Firms

  • Expansion of operations to new products/services.
  • Increase of recognition value and reputation.
  • Possibility of self-regulation, hence increase of market confidence towards them.

Floating on the Emerging Companies Market of the Cyprus Stock Exchange


On 30th September 2009 the Cyprus Stock Exchange (“CSE”) launched a new market called the Emerging Companies Market (“ECM”). ECM is governed by a simplified regulatory environment which has been specifically designed for the needs of small and emerging companies.

Cyprus Stock Exchange’s Emerging Companies Market (“ECM”) is similar to the AIM for the London Stock Exchange, with the added advantage that it is a Multilateral Trading Facility (MTF) as defined by the EU’s Markets for Financial Instruments Directive (MiFID) and operated by an EU regulated Stock Exchange.

In contrast to AIM and other main stock exchanges, listing on ECM is relatively straight forward, simple and with easily-met requirements, making it an attractive choice for companies that seek to be “listed” without having to meet excessive requirements, or as a first step before going to other major stock markets.

What is the history and legal substance of the CSE?

The CSE started its operations as a legal entity in the form of a public corporate body on the 29th of March of 1996, by virtue of The Cyprus Stock Exchange Laws and Regulations which had been passed by the House of Representatives in 1993 and 1995. The CSE is a regulated Market where all transactions concerning corporate and public securities are carried out. Such securities include stocks, bonds and warrants. The main participants in the market are the Members of the Stock Exchange (stock brokerage firms), the listed issuers and the investors.

What are the objectives of the CSE?

According to section 5 of the Securities and Cyprus Stock Exchange Law: The prime objectives and competencies of the Stock Exchange and its related powers and duties, are:

  • To take all necessary and appropriate measures for the development of the securities market, as well as to control and regulate transactions in securities
  • To provide the necessary facilities for the trading of securities and the issuing of an official price  bulletin
  • To facilitate the execution of stock market transactions
  • To provide procedures and means for supplying stock market information relating to the movement and trading of securities
  • To provide for the prompt display of relevant data for the information of members
  • To provide publication of a stock market bulletin either daily or periodically as determined by a decision of the Council.
  • To promote stock market activity and to use for this purpose every appropriate means of publicity regarding the benefits and the services of the Stock Exchange.
  • To encourage an orderly and systematic securities market, to combat fraudulent and improper stock market transaction practices and to provide the due protection of investors and the public in general.
  • To prepare and submit for approval the stock exchange Regulations necessary to achieve its objectives and to take every other action necessary for this purpose.

In addition to the Stock Exchange’s primary competencies as provided above, the Stock Exchange is assigned with any other functions, which customarily constitute the competence of a stock exchange, together with their related powers and duties.

Eligibility for Admission

A company must meet the listings requirements as set out in the regulative decisions of the CSE. The main requirements are set out below:

Main listing requirements

  • Trading records and audited financial statements for at least the two years preceding application, if applicable
  • “Newly established companies” can be admitted to the ECM, provided that the Council of the CSE is satisfied that investors are provided with adequate information to enable them to assess properly the value of the titles
  • The issuer should be a public company as per the legal requirements of its jurisdiction, with a satisfactory number of investors
  • No minimum market capitalisation restrictions
  • No minimum shareholders equity restrictions
  • Appointment and retention of a Nominated Advisor (“NOMAD”)*
  • No minimum dispersion (No minimum numbers of shares to be in public hands)
  • Production of an admission document

*The NOMAD must be registered with the CSE. See the CSE website for a list of approved NOMADs.

Listing process

The issuer must prepare and submit to the CSE the Admission Document which as a minimum must include:

  • History of the business
  • Adequate business plan (short and long term plans of the issuer), but no financial forecasts are required
  • Information on the directors and significant shareholders
  • Information about the placing or offer of the subscription
  • Risk Factors
  • Audited financial statements prepared under IFRS for the two years prior to the listing (if applicable)
  • Use of the listing proceeds

Additional declarations and documents will be also submitted to the CSE as part of the listing process. The typical duration for a listing process is one to two months from the date of collection of the necessary documents and information. The exact timetable will vary depending on the scope and complexity of the deal and a range of other factors.

Ways of achieving a listing

  • By public offer: if the offer is higher than 2.5 million Euros AND is addressed to more than 100 potential investors, a Prospectus and an approval from the Cyprus Securities and Exchange Commission (“CySEC”) are required in addition to the Admission document being approved by the CSE.
  • By private placement: if the offer is:
    • only addressed to institutional investors; or
    • to fewer than 100 potential investors OR funds raised are less than 2.5 million Euros, no Prospectus is required; only an Admission Document which needs no approval from the CySEC.
  • Combination of the two methods above.
  • By listing existing shares: an Admission Document is needed, which requires only CSE approval.

Continuing obligations and financial reporting

The main requirements are set out below:

  • Annual audited accounts must be signed and published within four months of the year end
  • Half-yearly reports (unaudited) must be published within two months of the period end
  • Announcement of any changes in the collaboration between the issuer and the NOMAD, accompanied with the reasons
  • In order to ensure the early notification to investors, listed companies have the obligation to announce to the CSE immediately, and if possible at least one hour before trading begins, any decision relating to the following matters:
    • Decision to pay or not to pay a dividend, the distribution of profits or the payment of interest concerning listed securities
    • Approval of financial results and accounts and how these will be published
    • In the case of bonds, any decision taken for a new issue and especially any matters associated with indemnities or collateral
    • Any decision taken concerning changes in the capital structure of the company
    • Any significant changes in the operations of the issuer
    • Any changes in the positions of Chairman, member of the Board of Directors, senior management, the auditors or any other executive
  • Publication and submission to the CSE of the dispersion of shares in the listed entity on the last working day of the calendar year

Why it is beneficial for a public company to obtain a listing on the CSE?

Admission to the CSE offers the following advantages:

1. A vehicle for raising capital

The CSE provides the listed companies with alternative means for raising the capital required, in order to finance their development and growth activities. The objective is to reduce their reliance on the more conventional ways of raising capital. Consequently, the CSE offers primarily to the small investor’s alternative options and possibilities for their investments and may act as a channel through where savings can be directed to the most productive, effective and efficient internal investments of the listed companies.

2. The growth and development of the sphere of activities of listed companies

The predominant feature of the economy of Cyprus is the large number of small to medium sized family enterprises, some of which are very credible and promising. However, on average, such companies often have limited prospects of growth and development and they cannot benefit from economies of scale. Due to the lack of sufficient infrastructure and solid foundations, the prospect of being exposed to the strong competition to be faced as a result of the anticipated membership of Cyprus in the EU is causing serious concern to many such companies, some of which may not be able to compete in such a harsh environment. Going public and obtaining a listing may offer a way out of these difficulties in the sense that the listing can provide the necessary funds to boost their growth potential. Furthermore, the control of the companies will gradually be dispersed from their founders to a large number of shareholders and this will consequently lead to improved management which, following this line of thought, can lead to more growth.

3. Strengthening of the company

By obtaining a listing, local and foreign companies can gain strength and reach the minimum size required in order to be able to be able to become competitive in the globalize environment.

4. Opportunity to invest abroad

Following the liberalization of interest rates and the removal of restrictions in capital flows, listed companies will be able to utilize the funds raised through the CSE in order to invest abroad in countries where financing is difficult to obtain, but where the prospects are promising. In the same way, companies from abroad will be given the chance to invest in local companies, and consequently listed companies will be able to enjoy their participation in foreign investments. It must be mentioned that, the chances of achieving such international goals are greatly enhanced if a company has a local listing and a credible record before it seeks a listing abroad.

5. Enhanced corporate image

Listed companies enjoy the privilege of attracting publicity, with all the positive implications associated with it. Furthermore, obtaining a listing has a status factor, which often enables listed companies to obtain finance on better terms than a private company.

6. Greater Marketability

Investors who choose to invest in listed companies may liquidate their investments at any time, an advantage that cannot be enjoyed when investing in private companies. 

7. A path to mergers and acquisitions

It is much easier for listed companies to proceed with a merger and acquisition, of either a company listed on CSE or a foreign company, and enjoy the synergy from such an option. The reason for this is the regulated market demands transparency to the economic affairs of each listed company. Hence, this enables offerors to provide accurate assessments of the potential growth and benefits that can be gained from such a strategic move.

Are there any tax incentives that favor a Public Company when admitted to the CSE?

In Cyprus there are plenty of tax incentives that may favor local and foreign investors.

a) Tax incentives for investors

According to the prevailing law, shareholders in listed companies enjoy the following tax incentives: 30% of the amount that is invested either by a legal person or physical person in an Initial Public Offering (IPO) can be deducted from the total amount of Income Tax payable, provided that:

  • The number of shares issued, represent at least, the 80% of the issued share capital with voting rights and are listed on the CSE within 3 months from the date of issue.
  • The number of shares issued, represent at least, the 80% of the issued share capital with voting rights and are listed on the CSE within 3 months from the date of issue.
  • The deduction is granted for the taxable year in which the listing is made.
  • This amount does not exceed 25% of the taxable income, before any deductions made to it.
  • If the restriction of point c, then the deduction can be forwarded for the following taxable years.
  • The deduction is not granted in the case of a company that undertakes, fully or partly, the activities of another company that has already listed shares on the CSE.
  • The deduction is not granted in the case of an entity that acquires directly or indirectly, shares of a company for which the deduction has already be given, or for which another deduction has been given before the validation of Law Number 79(1) of 1997.
  • The term “shares” that is mentioned in all of the points above does not include redeemable shares.

b) Tax incentives for foreign investors

The tax treatment of foreign investors depends on the tax regime that each investor is bound with. In the case where a Double Taxation Avoidance Treaty between Cyprus and investor’s country exists, investor’s income is not taxed when is brought to his/her country.

What are the issuer requirements that wish to be listed in the CSE?

The most important requirements that a local or foreign or issuer must comply with are the following:

  • The issuer must have been founded and operate in compliance with the law of the country that is based
  • The Articles and Memorandum of Association must authorize the issuer to issue the specific titles for which the listing is sought
  • The issuer must have published audited accounts for at least three years preceding the application. In case that the issuer is a recently established company, the disclosure requirement may be dispensed
  • Issuers whose shares are already listed on a foreign stock exchange must comply with the regulations of such stock exchange
  • No shareholder of the issuer general capital may control more than 70%
  • Minimum 25% of the issuers’ share capital must be satisfactorily issued among the public at large and the issuer may not favour any individual investor or group of investors
  • The issuer must clarify to the existing shareholders that they will have the pre­emptive rights in subsequent issues of shares
  • The issuer must satisfy the CSE Board that it has sufficient capital at its disposal
  • The issuer must comply with all the statutory reporting and disclosure requirements that the CSE Board may demand.

In exceptional circumstances some of the abovementioned requirements may be waived at the Discretion of the CSE Board.

How ASC CORPORATE can assist you:

We have a strong and distinct, regulatory-compliant brand which, we feel, lends weight to any prospective listing in the eyes of both the CSE ECM team and potential investors.


Assistance and advice on the initial steps that your company will need to take preparing for the listing on the ECM.

During the admission process

  • Support you with the drafting of the admission document in accordance with CSE regulations.
  • Submission of the admission document and assistance with follow-up queries by the CSE
  • Responsibility for the overall project management of the listing process which includes:
    • Meetings / conference calls with the Company’s management and the CSE.
    • Communication with the CSE
    • Coordination of all the parties involved in the process.
    • Advice regarding compliance with ECM rules throughout the process.



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