articles | 14 May 2015

7,000 companies shut down since start of crisis

More than 7,000 companies have been wound down since 2010 when the financial crisis started gripping Cyprus.

The worst year on record was 2014, when 1,837 companies shut down, according to data from the Department of Registrar of Companies and Official Receiver.

Of these, 1,674 were voluntary liquidations, and 163 compulsory – closure of a company by court order.

The slide began in 2010, when 750 businesses elected to shutter. The next year, the number rose to 981, going up to 1,144 in 2012.

In 2013,the year of the messy bailout – when the island’s second largest bank was wound down – 1,478 corporations were voluntarily liquidated.

The Official Receiver began keeping records in 1988; incidentally, in that year, just 20 companies were wound down. During the first quarter of 2015, there were 447 voluntary liquidations, compared to 356 for the same period last year.

In the last seven years alone, the Official Receiver has received a staggering 71% of the total number of voluntary liquidations recorded since the establishment of the department.

The number of compulsory liquidations and corporate bankruptcies during the last seven years account for 47% of all such cases since the Official Receiver’s establishment.

These statistics roughly correlate with unemployment figures. Joblessness in Cyprus took a sharp turn in 2011. In September of that year it stood at 8.48%. A year later it had reached 12.58%.

The island was deep in recession before March 2013, when Laiki Bank was folded, and uninsured deposits in that lender were wiped out as part of an international bailout deal for Cyprus.

By March 2013, unemployment stood at 14.78%. The jobless rate peaked in October 2013, standing at 16.83%. It currently hovers around the 16% mark.

Source: Cyprus Mail

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