We are pleased to share that Yiasemis LLC has been selected as the exclusive Cyprus contributor to Legal 500 Venture Capital Comparative Guide 2026. The Cyprus chapter, authored by Ioannis Yiasemis, answers the same twenty-question set put to leading practitioners across more than fifteen jurisdictions in the guide — giving founders, fund managers, and corporate counsel a single, comparable reference point on how Cyprus law approaches early-stage equity investment.
The chapter reflects the practical reality of Cyprus venture capital in 2026 — a market that has moved from informal, externally-dependent funding to one with emerging domestic institutional infrastructure, growing international recognition, and a meaningfully more supportive tax and regulatory framework. Below is a short preview of the topics it covers in depth.
Inside the Cyprus chapter
Choice of entity, equity structure, and substance
Why the Cap. 113 private limited company remains the vehicle of choice, how it accommodates layered preference structures, and the substance considerations that increasingly matter where a Cyprus holding company sits above an operating subsidiary.
FDI screening and merger control
How Cyprus's new FDI screening regime under Law 194(I)/2025 — in force since 2 April 2026 — interacts with cross-border VC rounds, including the 25% holding test, the €2 million value threshold, and the impact on fund structures with non-EU limited partners. Plus how merger control applies (and when it does not) to typical venture deals.
The 2026 tax reform and the new 8% options regime
A flat 8% rate on employee share-option gains, the abolition of stamp duty from 1 January 2026, and the implications for option plan design, pre-closing structuring, and the negotiation of waterfall and incentive mechanics in priced rounds.
Vesting, leaver mechanics, and the Cyprus rule against penalties
How standard four-year vesting and good/bad leaver constructs translate into a Cyprus shareholders' agreement, why private companies cannot buy back their own shares, and the careful drafting needed to avoid bad-leaver provisions being struck down under Cyprus contract law.
Restrictive covenants — a stricter framework than England
Why Cyprus contract law treats agreements restrictive of trade as void subject to narrow exceptions, and how we structure non-competes and non-solicits as shareholder covenants rather than employment covenants to give them a more defensible footing.
Market outlook and the next twelve months
Cyprus as the fastest-climbing EU country in StartupBlink's 2025 Global Startup Ecosystem Index, the launch of the Plug and Play Innovation Centre, and the legislative developments — including the scheduled expiry of the Article 9A angel investor incentive at the end of 2026 — that will shape activity in the year ahead.
Read the complete Cyprus chapter — 20 questions covering deal documentation, investment terms, leaver mechanics, tax, and market outlook — on Legal 500.
Read on Legal 500 →About the Comparative Guide
The Legal 500 Country Comparative Guides give founders, investors, in-house counsel and external advisers a single, consistent framework to compare how a legal question is handled across multiple jurisdictions. Each chapter is contributed by a leading firm in the relevant jurisdiction and follows a common question set, so readers can move directly from one country to the next without re-reading background context. The 2026 Venture Capital edition includes chapters from firms in Brazil, China, Finland, France, Germany, India, Italy, Japan, Singapore, Switzerland, Taiwan, Turkey, the United Kingdom, and the United States, among others.
About the author
Ioannis Yiasemis is the Founding Partner of Yiasemis LLC. He is dual-qualified as an Advocate in Cyprus and a Solicitor of the Senior Courts of England & Wales, and advises clients on M&A, investments, restructurings, and joint ventures, with a particular focus on cross-border transactions involving Cyprus.
For further information about the matters covered in the chapter, or to discuss a specific venture capital transaction, please contact us at info@yiasemis.law.
The Legal 500 Country Comparative Guide chapter referenced above is published on Legal 500's website. The content of this page is intended for general informational purposes only and does not constitute legal advice. Specific advice should be sought in relation to any particular transaction.