Despite financial support from the goverment, due to the coronavirus pandemic, and restrictive measures and prolonged quarantine, dozens of companies continue to close in Cyprus.
So, in October 2021, 148 enterprises were liquidated in the country. From January to October, this indicator was equal to 1,669 compared to 1,675 in 2020 and 1,650 in 2019.
168 companies closed in Cyprus in January 2021, 207 in February, 180 in March, 139 in May, 204 in June, 158 in July, 108 in August and 164 in September.
It is noteworthy that over the past decade, more than 19 thousand have been voluntarily liquidated in the country. At the same time, according to the Department of Insolvency, the largest number of enterprises closed in 2020 - 2,235. A year earlier, this figure was 2,097, and in 2018 and 2019 - 2,378 and 2,497.
It is worth noting that over the past 10 months, only 167 applications for a personal debt repayment plan have been submitted to the Department. In fact, the data show that from March to October 2021, the number of applications is kept at a stable level. As for the decree on writing off citizens' debts in the amount of up to 25 thousand euros, their number has reached 42.
As you may know, the company is declared bankrupt if it has a debt of more than 15 thousand euros.
It is expected that a new bankruptcy law will be introduced in Cyprus in the summer of 2022, which will help prevent the liquidation of many companies.
In particular, Cyprus intends to introduce into national legislation Directive 2019/1023 of the European Parliament on timely preventive restructuring and debt repayment. The aim of the European directive, which will be aligned with national legislation, is to ensure that a viable business can completely get rid of its debts after a reasonable period of time.
The essence of the Directive is to create a preventive restructuring framework that can effectively prevent the liquidation of companies even before they become insolvent. At the same time, among other things, procedures are being established to protect transactions related to restructuring, a regulatory framework has been defined to facilitate the exit from debts of a bona fide category of debtors, and consolidation of corporate and private loans is envisaged.