Cyprus completes the transposition of the CSRD

As sustainability and corporate responsibility become increasingly central to businesses across the EU, companies in Cyprus must also stay ahead of, and comply with, the fast-evolving legal requirements.

The long-awaited transposition of the Corporate Sustainability Reporting Directive (the “CSRD”) into Cyprus law marks a significant development in this landscape.

It introduces comprehensive and consistent ESG reporting obligations, designed to enhance transparency and consistency.

The CSRD was transposed in Cyprus through amendments to three existing pieces of legislation, namely, the Companies (Amendment) (No. 3) Law of 2025, the Auditors (Amendment) Law of 2025 and the Transparency Requirements (Securities Admitted to Trading on a Regulated Market) (Amendment) (No. 2) Law of 2025.

These laws were published in the Official Gazette of the Republic of Cyprus, and entered into force, on 29 July 2025.

In line with the Stop-the-Clock Directive, the CSRD reporting deadlines provided in the amendment to the Cyprus Companies Law, Cap. 113 have been delayed for certain companies by two years, as follows:

Wave 1: The obligation to submit sustainability reports applies for the 2025 FY for companies that were previously within the scope of the NFRD (European Directive 2014/95 ), namely:

• large companies which are public-interest entities and exceed, on the date of closure of their balance sheet, the average number of 500 employees during the financial year; and
• public-interest entities that are parent companies of large groups and exceed, on a consolidated basis, the average number of 500 employees during the financial year on the date of their balance sheet.

For the 2024 FY, such companies may:

• prepare a non-financial statement or consolidated non-financial statement as was the case before the entry into force of this amendment to the Cyprus Companies Law, Cap. 113 ;
• include a sustainability report or consolidated sustainability report in the management report or consolidated management report.

Wave 2:  Reporting begins for the financial years beginning on or after 1 January 2027 for:

• other large companies except those caught by Wave 1;  and
• parent companies of large groups except those caught by Wave 1.

Wave 3:  Reporting begins for the financial years beginning on or after 1 January 2028 for:

• SMEs governed by the laws of Cyprus whose transferable securities are admitted to trading on a regulated market of any Member State and are not micro-enterprises ;
• small and non-complex institutions, as defined in the Capital Markets Regulation   provided that they are large companies or SMEs governed by the laws of Cyprus whose transferable securities are admitted to trading on a regulated market of any Member State and are not micro-enterprises; and
• captive insurance undertakings and captive reinsurance undertakings, as defined in Directive 2009/138/EC on Insurance and Reinsurance (Solvency II), provided that they are large companies or SMEs governed by the laws of Cyprus whose transferable securities are admitted to trading on a regulated market of any Member State and are not micro-enterprises.

It is noted that a subsidiary is exempt from the requirement to prepare its own sustainability report if such company and its subsidiaries are included in the consolidated report of the parent company.

The transposition of the CSRD into Cyprus law underlines the growing importance of sustainability in corporate governance and investor relations. It is also a push for positive change in organisations and their strategies.

With staggered reporting and deadlines based on company size and type, companies must carefully assess their reporting obligations to ensure compliance. Nevertheless, implementing the CSRD requirements is not merely a legal necessity – integrating sustainability considerations into the company’s strategy will undoubtedly also add value to the business and its stakeholders.

Our firm is available to assist you determine if your company is within the scope of the CSRD, to navigate the legal requirements and also advise you how the wider ESG – related legal developments impact you.

This legal update is for information purposes only and is not intended to constitute legal advice or be a substitute of the detailed provisions of applicable laws.