The way to success through Cyprus’ Emerging Companies Market and NOMAD’s guidance


The recent introduction of the Emerging Companies Market (“ECM”) by the Cyprus Stock Exchange (“CSE”), has significantly changed the status quo in Cyprus’ business landscape. This new innovative market is governed by a simplified regulatory environment which has been specifically designed for the needs of start-up and new emerging companies.

The purpose of this article is to introduce you to this emerging market, analyse in depth the reasons why such admission may be beneficial to your company, identify all requirements and procedures and last but not least illustrate the role of the Nominated Advisor (“NOMAD”).


ECM purpose:

All companies wishing to enter into the aforementioned market, will be governed by the regulative decisions of the CSE, which will set out the necessary requirements and guidance.

In a nutshell the ECM is aiming at:

a)      Private non-listed companies pursuing funding and easy access to an alternative market;

b)     Investors inquiring for a new type of investments; and

c)      Public companies reluctant to bear the burden of higher costs of listing in regulated markets

Some of the benefits of being listed in the Cypriot ECM is the participation in an efficient run market, the recognition of the issuers’ marketability and credibility as well as the non-application of CFC rules. Important, however, is to note that investors should be aware that they are investing in companies with higher potential risk and are encouraged to study carefully and evaluate the relevant risks prior to any investment.

Cyprus tax considerations:

The profit arising from the sale of securities by Cyprus tax residents is exempt from income tax and is not subject to special defence contribution.

Furthermore, any gain realised on the sale of securities (i.e. shares or bonds) of a company listed on ECM (or any other CSE market) is not subject to any Capital Gains Tax, regardless of whether the company owns immovable property situated in Cyprus.


The decision to float:  

After the above decision has been taken, the issuer has to considerably evaluate its existing business and identify the extent to which the ECM admission requirements can be met, namely:

•             General suitability – preparation and planning;

•             Eligibility for admission;

•             Continuing obligations and filing requirements.


NOMAD’s Role:

Nominated Advisor (NOMAD) is a law firm or a financial institution or a Cyprus Investment Firm (CIF) or an audit firm or another legal entity appointed by the Council of the Cyprus Stock Exchange as a Nominated Advisor for the Emerging Companies Market of the Cyprus Stock Exchange which manages and promotes the listing of securities on the Emerging Companies Market and whose name is entered in a special list of Nominated Advisors published by the Cyprus Stock Exchange.   The major role of the NOMAD is to ensure that the issuer is appropriate to be quoted on the ECM and to assure that the rules and regulations are complied on an ongoing basis. In addition, the NOMAD will assist the company throughout the flotation process.

The NOMAD must be retained at all times to consult the issuer. A short sum up, the NOMAD represents the issuer through the listing procedure and provide advice to the issuer in respect of the compliance of the continuous obligations in the market.

Below are listed some of NOMADs’ undertakings:

-        preparing the admission document;

-        project management of the overall process leading to a listing; 

-        evaluation and presentation to the CSE ensuring that the listing requirements are fulfilled;

-        representing the issuer through the listing procedure;

-        advising in respect of the compliance of the continuous obligations:

-        in case that the issuer does not comply with its obligations, the NOMAD will take any necessary actions in order to remedy any failure, while informing the CSE on the nature of the failure and the measures that you have undertaken;

-        assisting with comfort letters and related procedures;

-        risk management advice; and

-        market practice input.


The process:

The below structure clearly illustrates the three phases - pre, during and post-admission - and the activities executed by the respective NOMAD:



Main listing requirements:

  • Audited financial statements or management accounts for the previous two years
  • “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 must have 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


General requirements:

In addition to the above listing requirements, the general requirements of the existing markets of the CSE will also apply. These are:

  • The issuer must have been properly established and operating as a public company in accordance with legal requirements of its jurisdiction, which provides it the power to issue shares to the public.
  • The issuer must be authorised to issue the specific shares which seeks to float in pursuance to the law of the country of incorporation, the memorandum and articles of association or any other document governing the terms of its incorporation and relations among its members.
  • The issuer is proposing the flotation of freely transferable securities.
  • The issuer shall not undertake any commitment in any way incompatible with the interest of its shareholders.
  • Equal treatment must be secured to the beneficiaries of securities of the same category, in respect of all rights or obligations related thereto.
  • In the case of shares, it must be ensured that any future issue shall first be offered to existing shareholders pro rata according to the amount each holds in the issuer’s share capital, unless the shareholders shall decide otherwise by special resolution.
  • Fully paid securities shall be proposed for flotation.
  • The listing must concern all the securities of the same category which have, or will be, issued, as well as all options or other derivatives which are convertible or offer the possibility of being converted into securities in the same category as the securities to be floated.
  • The issuer must be prepared and able to deliver its Register to the Central Depository and Registry and to respond to any obligation upon the undertaking or the future keeping of the Register or Registers of its shareholders.

How we can help:

Our Firm can provide you with a tailor-made solution to your specific needs and act as an officially authorised NOMAD for your admission into this emerging market. For more information, as to the timeframe, fees and requirements please contact us using the following email address: