Comparative legal analysis of associations laws and regimes in the EU. Country Report: Cyprus
Associations in Cyprus operate under the aegis of the Cypriot Constitution and the national Civil Code (similar to the Greek one).
The legal framework regarding the creation, the functioning and the dissolution of all types of Cypriot associations is governed by the relevant provisions of the Law 104(I)/2017 for the Associations and Foundations. The final version of this law is a result of a series of amendments provided by laws 76(I)2018, 84(I)/2019 and 118(I)/2020.
According to law 104(I)/2017 there are three types of associations: societies, foundations and federations. However, the term society is the direct equivalent of the term association in English. For the purposes of this report, they will be presented as association (society), associations (foundations), and associations (federations). In terms of their social purpose and impact, the associations can be two types: social enterprises “of general scope” and “social integration” enterprises.
To acquire legal personality, the association’s main constitutive act1 and its Statute need to be certified by a notary act and the entity itself needs to be registered in the Public Registry of Associations (within the Registry of Companies), which is accessible online. Associations are managed by two standard bodies, a General Assembly and a Board of Directors.
Their financial revenues derive from public contributions made available by the State, the EU or local authorities (Provinces, Municipalities, and others), private donations, and inheritances and membership fees.
Associations in Cyprus can be terminated by the competent Court (for Public Order reasons or following a civil legal claim) or by its members when its social mission has been accomplished. Liquidation of its assets may follow, according to the provisions of the Civil code. In case of bankruptcy, only the assets of the entity (and not the assets of the members) are sold in order to satisfy the creditors.
Associations can pursue economic activities only if they are of public interest. They should not be contrary to Public Order principles, national interests and national security.
In Cyprus, associations are essentially small and very small active at communal or grass-root level and supported by voluntary membership. In accordance with law 246/1990, all types of Associations are not VAT exempt for any of their activities, even for memberships.
In 2022 the total number of associations in Cyprus is 33062. The estimated minimum number of members of all associations is 9000. The estimated share of people working in social economy in general is less than 2% of the total workforce of Cyprus. 3 Less than 20 % of the population declares to be included in recent volunteering activities
The Report does not take into account similar social entities presumably operating in the Northern part of this divided island, under Turkish control. Very little is known about them.
1.Definition, types of association and characteristics
2.Sources of law founding associations
3.Formation requirements and constitutive acts and elements
8.Definitions of public interest
10. Economic activities permitted
11. Governance, operating rules and bodies
13. Reporting and transparency
14. Resources and assets management
1.Number of associations in Belgium
6.Share between voluntary and paid work
7. Data on cross-border activities
According to law 104(I)/2017 there are 3 types of associations: societies, foundations and federations. However, the term society is the direct equivalent of the term association in English. Therefore, we will focus on it. Examples for the other types of entities will be given when there is a common regime or in order to highlight the distinctions. For the purposes of this report they will be presented as associations (societies), associations (foundations), and associations (federations).
In terms of their social purpose and impact they can be of two types:
- social enterprises “of general scope” and
- “social integration” enterprises.
Articles 3 to 6A of the Law 104/207 stipulate the general provisions that govern all three types of associations. In particular Article 3 recognises the right of every person to form an association (this is indeed a Constitutional principle) for legitimate social purposes.
According to Article 4, every association that aims to undermine the democratic order, the public security, the public health, the public morality as well as the fundamental rights and freedoms of individuals, may be declared illegal and dissolved by Court order. In addition, the demand for registration in Registry of Associations may be rejected. An already existing registration may be cancelled as well. Pursuant to the same article, the participation in the administration of such an illegal entity is considered a criminal offense and is punished with either imprisonment (up to three years) or a financial (administrative) penalty (up to EUR3,000), or both.
The legal framework regarding the formation, the functioning and the dissolution of all types of Cypriot associations is governed by the relevant provisions of the already mentioned Law 104(I)/2017 for the Associations and Foundations. The final version of this law is a result of a series of amendments provided by laws 76(I)2018, 84(I)/2019 and 118(I)/2020. Other relevant legal acts are in place regarding the Court of Justice rulings and jurisprudence. The Cypriot Codes and legal prescriptions transpose the most relevant EU Directives and Regulations related to social enterprises, social protection, support to social entrepreneurship, transparency, accountability and audit.
In order to register an association (society), its members must file a request to the Registry of Associations. The following elements must be enclosed: the association (society’s) constitutive act, the personal details of the members, the association society’s statute (signed by all of its members), the association (society’s) emblem (if exist) and documents that describe the assets that will be transferred to the association (society) after its registration and the acquisition of a legal personality (art. 7).
The Statute must include the purpose, the name and the headquarters of the association (society), as well as specific clauses regarding the membership, the power to represent the association (society) and its main bodies. The general purpose and functions of the association need to be well and clearly specified (art. 8).
Subject to the Registry’s verification that all the legal conditions for its establishment have been met and there are no irregularities (art. 4), a “certificate of registration” is issued. This document, once published in the Government Gazette along with the association (society’s) Statute, constitutes the official proof of formation of the association (society) and the attribution of a legal personality (art. 7 par. 5). If irregularities are found, the Registry may refuse to issue the certificate. In this case, the applicant is notified in written about the reasons that led to this decision. The most appropriate legal staps that the applicant can undertake in this situation are specified by the Registry in the written notification (art. 7 par. 7).4
In order to establish a Foundation, there are two important elements: a constitutive act and the approval of the Registry of Associations. The constitutive act is a legal act that can either take the form of donation or inheritance. In both cases the constitutive act must be in written form; in case of a donation, there must be a notarial document and in the case of inheritance there must be a written will. Both acts set the name, the purpose of the Foundation, its headquarters, the assets and details regarding its organisation, function and administration (art. 27)
Then, the founding members file an application to the Registry to validate the Foundation and register it. The Registry examines the application that is accompanied by the Foundation’s constitutive act and Statute. If all the legal requirements are met, the Registry registers the Foundation and issues the relevant certificate (art 26). After the publication of the certificate in the Gazette, the Foundation acquires legal personality. From that moment, the founding members have the obligation to transfer all the assets to the Foundation (art. 30). Furthermore, the founding members have the right to proceed to the competent Court and demand to cancel the constitutive act for grave reasons (art. 29).
An association (federation) is established when at least five or more societies, foundations and other similar national or foreign entities (that share the same values and aims) and are all governed by the Cypriot Law, decide to form a union (art. 44, par. 1).
According to the art.44, para 2, an association (federation) is established after the filing of a written application to the Registry from the founding members or the representatives of the founding entities, along with:
a) the association (federation’s) Statute, dated and signed by its members;
b) the statutes of every founding entity;
c) the constituent act;
d) the personal details of the founding members/representators;
e) the emblem, if exists,
f) a detailed description of the assets that belong or will be transferred to the Federation
The statute must determine the purpose of the association (foundation), its name, its headquarters (within the Cypriot territory), details regarding the acquisition or loss of membership, its representation, its sources of income, its administrative bodies along with details for their function and, lastly, details regarding its dissolution and liquidation (art. 44 par 3).
The general provisions of article 4, 6 and 7 apply. This means that the association (federation) is registered by the Registry, who also issues the relevant certificate and publishes it in the Gazette and, thus the association (federation) acquires legal personality (art. 44 par 3). Every association (federation) has its own administration independent of the administrations of its member-entities (art. 43 par. 4). Regarding the administration, dissolution and liquidation, the provisions of article 10-25 are applied.
In general, every entity that falls within the scope of the current legislation acquires legal personality from its registration, which lasts until the dissolution of the entity (art. 5). The Registration process has been illustrated in the previous paragraph. The Registry of Associations (within the Registry of Companies and Official Receiver (the Provincial Governor under the definitions provided in art. 2)) is the competent authority to conduct the registration procedure of the association (society, foundation and federation). It has the power to deny the registration if the association (its function or name) is illegal (pursuant to the previous paragraph) or in case the members of the association have a criminal record. For that purpose, the Registry may ask the members to provide relevant certificates (criminal records, residence certificats, identity documents, and others) (art. 6 par. 1, 2). In the case where the activities of the association relate to minors, the members of the association have to provide the Registry with a special certificate that they have never been charged or prosecuted for crimes against under-aged people or children (art. 6A).
They vary depending on the required constitutive procedures(there is no fixed price (quotes can be requested from law firms). No set amounts as legal fees are also involved. The relevant stamp and administrative fees vary depending on the procedure, the type of association and the applicable legislation.
In general, all associations are bound by the decisions of their governing bodies.
Any non - profit entity is bound by all the decisions and actions taken by its Board of Directors. In addition, it is liable for all the acts and omissions that its bodies may take, if they are having a negative impact on third parties. If, however, the harmful act or omission was intentional, then the natural person to whom it is attributed is also liable (art. 36).
In general associations are legal persons governed by private law (the Civil code). In some circumstances though where the state participates with one of its branches and public purpose is involved, they are governed by public law (Administrative Code).
An association is considered a legal person after a registration is validated.
The Cypriot state, has passed a bill entitled ‘Law for the development and maintenance of a Registry for Social Enterprises’.
The bill is aiming to define the mechanisms for the registration of businesses in a Social Enterprises Registry. It specifies the criteria that a natural or legal person must meet in order to register as a social enterprise. At the same time, it aims to regulate the obligations of these social enterprises. It stipulates that a business can be defined as a “social enterprise serving a public interest”, if it falls under one of the following two categories:
(a) social enterprise “of general scope”: “the primary purpose of such an enterprise should be to carry out a social mission through the promotion of positive social and/or environmental actions in the interest of association (society), and it should invest at least 70% of its profits to promote this social mission”5;
(b)” social integration” enterprise: “the primary purpose of such an enterprise should be to carry out a social mission through the employment of persons coming from vulnerable groups of the population, and these persons should constitute at least 40% of the enterprise’s workforce”6.
The membership status in the association (Society) can be attributed to any person unless the statute sets other requirements (art. 12 par. 1). All members are equal unless otherwise provided in the Statute (art. 13). Accordingly, any member may decide to leave voluntarily or could be expelled for the reasons specified in the Statute (art. 12 par. 2 and 3) without retaining any claim on the associaton (Society’s) assets (art.14). Membership can never be transferred (art 15).
Associations can pursue economic activities (without profit distribution). However, they should be of public interest (please see the section on “Public interest) and they should not be contrary to Public Order principles, national interests and national security.
The main bodies of the associations (society) are the General Assembly and the Board of Directors.
The General Assembly is the main body of the associations (society) and has general competences over the affairs that have not been delegated to another competent body (art. 19). Its function is governed by the Statute of the association (art 20 and 21). The Assembly elects its own members as well as the members of the Board of Directors. All members of the association are members of the General Assembly. It adopts decisions related to:
the admission or expulsion of a member;
the approval of the balance sheet;
the decision and the amendment of the Statute of the society, and its dissolution (art. 19).
Any decision of the Assembly that is against the law or the Statute can be challenged by any member before the competent Court. If irregularities are found then the decision is declared “null and void”. (Art. 23).
The Board of Directors/Trustees consists of at least five members that are exclusively members of the entity. The Statute may allow the appointment of non-members (art. 16). The Board of Directors is the executive body of the entity. It is in charge of the society’s affairs, it proposes draft annual plans and balance sheet to the approval of the Assembly and represents the Entity in and out of Court. The Board is also liable for acts and omissions against third parties (art. 18).
Associations operate under the Constitution and the Civil Code of Cyprus. Other legislative Acts may be relevant such as the Code of enterprises, the Commercial Code (on bankruptcies), the Tax Code, some Acts dealing with non- profit organizations and volunteering and, in case of illegal activities, the Criminal code. Various Ministries are also involved as supervisors, controllers and issuers of strategic orientations and operational guidelines, and in particular the Ministry of Employment and Social affairs, the Ministry of Economy, the Ministry for enterprises and the Ministry of Justice and Home Affairs.
These public authorities also approve public funds on associations/societies to promote socially-relevant initiatives having a general public interest. An important role is played also by Office of the Commissioner for Voluntarism7 and non -governmental organizations, which is not a regulator but, rather a support mechanism for the non-profit sector. The Commissioner is quite influential high-rank official appointed directly by the President of the Republic of Cyprus with a mandate to implement policies aimed at supporting the active participation of the citizens in the development of the non-profit sector.
In some cases, Municipalities and other regulatory and audit bodies can intervene with their own rules and regulations.
From an administrative and regulatory point of view, the Registry is in charge of analysis of legitimacy, authorisations and controls. It has to be duly notified about any changes or amendments of the statute within 30 days (art 9). Furthermore, within the first three months of the year, the society’s administration has to notify the registry about any changes of the society’s membership status, the administration, the headquarters and offices or any other information related to the decisions taken by the General Assemblies during the previous year (art. 10).
Associations (societies) are committed to accountability, transparency and integrity. Annual balance sheets and internal or external reporting should reflect these principles. To ensure a strict adherence to these “good governance” principles at corporate level, the Government is considering the creation of an independent national Commission to enhance its fight against mis-appropriations, corruption, money laundering and illicit cross-border financial flows. Its prescriptions will be also applicable to the non - profit sector8.
The resources and assets are made available by the State/EU/institutional funding, donations, and membership contributions. The management of such assets is part of the duties of the Board of Directors and the General Assembly (if stipulated in the statute).
The dissolution of the Association (Society) and the names of the liquidators must be announced to the Registry and registered in the Registry (art. 11) within 30 days . According to article 24, a society may be dissolved in the following cases:
a) at any time following an Assembly decision under art. 22;
b) if its members are less than 20 and they decide to do so (no additional provisions are stipulated by law);
c) following a Court ruling; upon request of either the administration, the 2/5 of the society’s members or the supervisory authority, if the conditions set in the Statute are not met, if the society has failed to achieve its purpose or it has deviated from its original purpose of establishment and is now pursuing different or illegal purposes (art. 4).
The dissolution is followed by the liquidation which is governed by article 25. In most cases, the administration of the association takes the role of the liquidator. This procedure is exclusively conducted by the liquidator and only the Provincial Governor has the right to intervene for a better management of the assets. The purpose of the liquidation is to check and evaluate the assets and liabilities of the legal entity, to liquidate the assets or transfer them to other entities and to pay debts and other financial obligations due to creditors. The rest, if any, is re-distributed among the members. As a result, capacity of the liquidator to conduct legal acts is limited to what is necessary to carry out the liquidation procedure. The liquidator is liable for damages in case he/she violates its obligations.
The Assembly is the main body of the Society and has general competence over every affair that has not been delegated to another competent body (art. 19).
In accordance with law 246/1990, all types of Associations (including societies) are not VAT exempt for any of their activities, even for memberships.
In 2022 the total number of associations in Cyprus was 33069.
The estimated minimum number of members of the associations in Cyprus is 900010.
The main activities covered by the associations in Cyprus are in the following areas: personal care services, education and training, environment, animal protection and waste management (i.e., reuse, recycling, recovery and disposal).11
No data available
No data available
The number of people employed in social economy (including societies, foundations, cooperatives) is relatively low. The estimated share is less than 2% of the total workforce of Cyprus. 12
Less than 20% of the population in Cyprus declares to be included in recent volunteering activities. A survey by the Volunteer Network Project of 369 citizens identified 69 citizens who had volunteered in the previous 12 months (the research was conducted in 2018). This is equal to 19% of the sample13. On this basis, we can estimate that there are around 147,500 volunteers in Cyprus.
No data available
L. 246/1990
L. 104(I)/2017
Social enterprises and their ecosystems in Europe | Country report CYPRUS, Luxembourg: Publications Office of the European Union, 2019
Study on Volunteering in the European Union Country Report Cyprus, https://ec.europa.eu/citizenship/pdf/national_report_cy_en.pdf
http://www.moi.gov.cy/moi/moi.nsf/pagede1b_gr/pagede1b_gr?OpenDocument
The following documents must be submitted for a registration: the society’s constitutive act, the personal details of the members, the society’s statute (signed by all of its members), the society’s emblem (if exist) and documents that describe the assets that will be transferred to the society after its registration and the acquisition of a legal personality.
Social enterprises and their ecosystems in Europe | Country report CYPRUS, Luxembourg: Publications Office of the European Union, 2019
Social enterprises and their ecosystems in Europe | Country report CYPRUS, Luxembourg: Publications Office of the European Union, 2019
Only general guidance about the steps to be undertaken exists.
http://www.dgepcd.gov.cy/dgepcd/dgepcd.nsf/page60_en/page60_en?OpenDocument&print
http://www.dgepcd.gov.cy/dgepcd/dgepcd.nsf/page60_en/page60_en?OpenDocument&print
The role of the Office of the Commissioner for Voluntarism is a support role with general wide range and widely defined duties.
There is no legal regulation currently in place regarding the reporting process of associations (societies).
Social enterprises and their ecosystems in Europe | Country report CYPRUS, Luxembourg: Publications Office of the European Union, 2019
Number estimated based on the minimal number of people necessary to establish an association.
Social enterprises and their ecosystems in Europe | Country report CYPRUS, Luxembourg: Publications Office of the European Union, 2019
Social enterprises and their ecosystems in Europe | Country report CYPRUS, Luxembourg: Publications Office of the European Union, 2019
https://ec.europa.eu/citizenship/pdf/national_report_cy_en.pdf