Probably not, if it is a post-employment non-compete. Section 27 of the Contract Law, Cap. 149 makes an agreement void to the extent that it restrains anyone from exercising a lawful profession, trade or business, and the only exceptions written into the section cover someone selling a business's goodwill and partners agreeing restrictions between themselves. An employee is in neither category. Non-solicitation and confidentiality clauses are a different matter, and so is competing while you are still on the payroll.
What section 27 actually says
Cap. 149 was modelled on the Indian Contract Act of 1872, and section 27 keeps the Indian approach rather than the English one. English courts ask whether a restraint of trade is reasonable. Section 27 does not. It starts from the position that a restraint is void, then lists the exceptions:
- A person who sells the goodwill of a business may agree with the buyer not to carry on a similar business within specified local limits, so long as the buyer carries on a like business there and the limits are ones a court considers reasonable for that type of business.
- Partners may agree not to carry on any business other than the partnership's while it lasts, and may agree restrictions on competing with the firm after dissolution or on an outgoing partner, again within limits a court finds reasonable.
That is the list. There is no employment exception. Article 25 of the Constitution points the same way: it guarantees the right to practise any profession or carry on any occupation, trade or business, and allows restrictions only where a law imposes them for listed public purposes. A clause in a private contract is not that.
So the qualifiers employers rely on elsewhere do little here. Limiting the clause to six months, or to Limassol district, or to a named list of competitors, does not move an employee into one of the statutory exceptions.
Has a Cyprus court ever enforced one against an employee?
Not at appellate level, as far as published commentary shows. Practitioners writing in 2026 describe the position as untested in the Supreme Court and the Court of Appeal, with any decisions so far being first-instance rulings that bind nobody else. Some of those decisions upheld a tightly drawn restriction that stopped short of preventing the person from working at all, for example a bar on interfering with existing client relationships. That is really a non-solicitation covenant wearing a non-compete label.
Because Cyprus courts do look to English authority where Cap. 149 is silent, you will see arguments that a short, local covenant protecting a legitimate interest should be enforceable on English reasonableness principles. The counter-argument is that section 27 is not silent. It says void, and the legislature chose which exceptions to write in. Until an appellate court rules, an employer suing on a bare non-compete is litigating the point rather than enforcing a settled right.
While you are still employed, the rules flip
The weakness of post-termination non-competes is not a licence to compete while employed. Cyprus courts recognise an implied duty of fidelity, stronger for senior staff, which runs for the whole of the employment including the notice period. Soliciting the employer's clients for your new venture, copying the customer database, or recruiting colleagues before you leave are breaches of that duty. Where the evidence shows an employee set up a rival business while still drawing a salary, courts have treated it as a breach, with interim injunctions and compensation available. Preparing to leave is lawful. Starting to compete is not.
The Transparent and Predictable Working Conditions Law, Law 25(I)/2023, which transposed EU Directive 2019/1152 and took effect on 13 April 2023, gives private-sector employees a right to take other work outside their agreed hours. An employer may restrict that right only in writing and only for objective reasons the law recognises, such as health and safety, protecting business confidentiality, or avoiding a conflict of interest. A ban on moonlighting for a direct competitor fits that test. A blanket ban on any second job does not.
Non-solicitation and confidentiality clauses
These are where a well-advised employer puts the effort, because they restrict specific conduct rather than the right to work.
A non-solicitation clause stops a former employee from actively approaching the employer's clients, suppliers or staff for a defined period. Cyprus commentary and the first-instance decisions treat these more favourably than non-competes. Drafting decides the outcome. A clause covering the clients the employee personally dealt with in their final year, running for a year after leaving, stands a far better chance than one covering every customer the company has ever had, worldwide, indefinitely. The second is an industry ban by another name and will be read as one.
Confidentiality has the firmest footing of all. The general law on misuse of confidential information applies whatever the contract says, and since 27 November 2020 the Protection of Undisclosed Know-how and Business Information (Trade Secrets) Law, Law 164(I)/2020, which implements Directive 2016/943, gives trade secrets statutory protection with remedies including injunctions, delivery up and damages. Two limits matter. First, the information must genuinely be a trade secret: not generally known, commercially valuable because it is secret, and subject to reasonable steps to keep it so. An employer who never marked anything confidential or restricted access will struggle on the third limb. Second, neither the Law nor any contract can stop a former employee using the general skill and experience they built up in the job. The line runs between a customer list, which is protectable, and knowing how the market works, which is not.
A so-called NDA that in practice prevents the employee working in the sector at all is assessed as a restraint of trade whatever the heading says.
Garden leave and payment in lieu
UK employers often use garden leave as the workaround: keep the employee on the payroll through a long notice period, bar them from the office and from clients, and rely on the continuing duty of fidelity rather than a post-termination covenant. The mechanism exists in Cyprus too, but it is less developed. Statutory notice under the Termination of Employment Law, Law 24/1967 is modest, rising from one week after 26 weeks' service to eight weeks after six years, so any meaningful garden leave has to come from a longer contractual notice period agreed in writing. A contract that lets the employer put someone on garden leave should say so expressly. A bare instruction to stay at home unpaid during notice is a breach of contract by the employer.
Payment in lieu of notice is permitted under Law 24/1967 even without a contractual clause, but a proviso deems the employee to remain employed for certain purposes until the notice would have expired, and commentators disagree on whether paying in lieu brings the duty of fidelity to an early end. Employers who want the protection of the notice period should run it rather than buy it out. Paying an employee during a post-termination restriction does not convert a void non-compete into a valid one either.
Selling a business or leaving a partnership
The two exceptions in section 27 are real and are used daily. If you sell your Paphos restaurant or your Limassol accountancy practice, the buyer can lawfully require you not to open a similar business within a defined area for a defined time, and a court will enforce that provided the limits are reasonable for the type of business and the buyer actually carries on the business they bought. The same applies to partnership agreements under the Partnerships and Business Names Law, Cap. 116: partners can bind each other, and an outgoing partner, not to compete with the firm within reasonable limits.
One trap catches founders. Someone who sells the company and stays on as an employee gives two separate covenants, one as vendor and one as employee, and only the first sits inside the exception. A corporate lawyer structuring the sale should draft them as such.
What to do with a non-compete in your own contract
If you are the employee:
- 1Check whether the clause restrains you from working at all (a non-compete) or from specific conduct (non-solicitation, confidentiality). Only the first is presumptively void under section 27.
- 2Do not take client lists, pricing or other confidential material with you, and do not approach clients before your last day. Those are the claims that succeed.
- 3Serve your contractual notice. Walking out early gives the employer a breach claim that has nothing to do with the non-compete.
- 4If the employer threatens proceedings, get the clause reviewed before replying. A letter from the old employer to the new one is common and often overstates the position.
If you are the employer, assume the bare non-compete is unenforceable and build protection elsewhere: a non-solicitation covenant limited to clients the employee actually handled, a confidentiality clause that defines the information and survives termination, access controls that evidence reasonable secrecy steps under Law 164(I)/2020, and a contractual notice period long enough to make garden leave worthwhile. Our guide to Cyprus employment contract rules covers what else must be in writing. A claim on a restrictive covenant is a contract claim with a six-year limitation period, as explained in our guide to limitation periods, but an interim injunction depends on acting within days, not years.
Dealing with a non-compete dispute in Cyprus? Browse employment lawyers in our directory, many of whom act for both employers and departing staff. The position above reflects Cap. 149 and the 2020 and 2023 statutes as in force in October 2026, and the absence of appellate authority at that date; it is general information, not advice on your contract.