Cyprus

Market Overview
By

Nestled in the eastern Mediterranean, Cyprus has long been a sought-after destination for investors seeking a strategic business foothold in Europe and beyond. With its rich history, favorable business infrastructure, strong economy, and appealing opportunities, Cyprus remains an attractive jurisdiction for both domestic and foreign entrepreneurs, organizations, and corporations.

Business environment

Changes in 2025 versus 2024 - What has changed in the last year that has impacted the way business is conducted?

Over the past year, Cyprus has experienced several significant developments that have impacted the business environment:

Economic Indicators and Fiscal Policy
  • Credit Rating Upgrades: In November 2024, Moody's upgraded Cyprus' credit rating from Baa2 to A3, reflecting improved investment appeal. com
  • Inflation and Fiscal Surplus: Inflation stabilized at approximately 2.2% in 2024, down from 3.9% in 2023. The country also maintained a strong fiscal surplus, contributing to economic stability. cyprus-mail.com
Tourism Sector
  • Record-Breaking Tourism Figures: In 2024, Cyprus welcomed over 4 million visitors, generating revenues exceeding €3 billion. This surge underscores the sector's robust recovery and its significance to the national economy. com.cy
Energy Sector
  • Natural Gas Exploration: ExxonMobil commenced gas drilling off the Cypriot coast in January 2025, aiming to enhance energy diversification and security. Reuters
  • Gulf Energy Collaborations: Cyprus entered discussions with energy companies from Persian Gulf states regarding natural gas exploration licenses, indicating a strategic move to bolster the energy sector. com

What are the advantages of your country as a business location?

Cyprus boasts a strategic geographical position, situated at the crossroads of Europe, Asia, and Africa, making it a prime location for businesses seeking entry into these lucrative markets. This unique positioning presents a wealth of opportunities for international enterprises. Additionally, Cyprus offers an appealing tax system with one of Europe's lowest corporate tax rates at 12.5% and an extensive network of double tax treaties. Further, the country has introduced a favorable Intellectual Property (IP) regime that provides tax incentives for companies holding IP rights, reducing their effective tax rate as low as 2.5% on IP-related profits. Such tax advantages make Cyprus an enticing choice for foreign investors seeking to optimize their financial profiles. Additionally, the country is included on the OECD’s whitelist of jurisdictions and has also received positive credit rankings in 2023 from Fitch (BBB), Moody’s (Baa2) and S&P (BBB). Cyprus also finds its long-term credit rating 3 grades above the minimum investment threshold, specifically at BBB High and BBB+ by DBRS Morningstar and the Germany-based agency Scope Ratings.

The island further stands out due to its well-developed infrastructure, including modern telecommunications, global ports, and international connectivity. A skilled and educated workforce, proficient in English, strengthens Cyprus's appeal for companies seeking to establish their operations. The nation's economy has displayed resilience, exhibiting consistent growth and recovery following the economic challenges spurred by the Covid-19 pandemic. Beyond this, Cyprus diversifies its business sectors, extending well beyond traditional domains like tourism and real estate. Thriving in sectors such as ICT, fintech, shipping, renewable energy, entrepreneurship & innovation, investment funds, filming, and higher education, Cyprus's economic prospects remain robust. Moreover, its straightforward legal system simplifies business establishment and operation. Furthermore, Cyprus offers accessible residency programs for foreign investors, allowing them to secure residency through varied investment opportunities. Lastly, Cyprus's European Union (EU) membership opens doors to the EU's market and free trade with other member states, enhancing its business attractiveness on a global scale.

What are the business structures in your country?

Private limited liability company by shares

Such a company has share capital, and the liability of its members is limited by its memorandum of association to any unpaid amount, for the shares they hold. A private limited liability company by shares must have at least one (1) shareholder but no more than fifty (50), exclusive of any persons who are or have formerly been in the employment of the company and are or still continue to be members of the company. A private limited liability company cannot offer its shares for subscription to the public. This is the most common type of company.

Public limited liability company by shares

This company has share capital and the liability of its members is limited by its memorandum of association, to any unpaid amount, for the shares they hold respectively. A public limited liability company may invite the public to subscribe for its shares and may be listed on the stock exchange. The number of members of a public company must be at least seven (7). The minimum authorized and issued capital of a public company, which is offered for subscription, must be twenty-five thousand, six hundred and twenty-nine euros (€25,629).

Limited liability company by guarantee without share capital

This type of company does not have share capital and its members act as guarantors rather than shareholders. The liability of its members is limited by its memorandum of association, up to the amount that the members have undertaken to contribute respectively to the assets of the company in case of dissolution.

Limited liability company by guarantee with a share capital

This company has share capital and the liability of its members is limited by its memorandum of association, on the one hand, up to any unpaid amount for the shares they hold, and on the other, up to the amount that its members have respectively undertaken to contribute to the assets of the company in case of dissolution. This type of company can be either private or public company. If it is a public company, it can invite the public to subscribe for its shares.

Variable capital investment company

This company is a limited liability company by shares. The main characteristic of this type is that, according to its memorandum of association and the rules governing its operation, its shares do not have a nominal value but rather a variable value. The company can be incorporated after it receives a relevant license from the Cyprus Securities and Exchange Commission (CySec) to operate as Collective Investment Funds (CIF).

A variable capital investment company (VCIC) can take the form of either a private or a public company, depending on the type of collective investment fund (CIF) that such variable investment company will take (UCITS, AIF, AIFLNP, RAIF). The number of members of a private company can range from one (1) to fifty (50) members while the number of members of a public company must be at least one (1).

General Partnership

In a general partnership, all partners are general partners and therefore every partner is jointly and severally liable with all the other partners for the debts and obligations of the partnership that arise while he/she is a partner. A general partnership must have at least two (2) partners.

Limited Partnership

A limited partnership must comprise of one (1) or more persons who will be the general partners and shall be responsible for all the debts and obligations of the partnership, as well as one (1) or more persons who shall be the limited partners who will contribute a certain amount or property, valued at a specific amount to the partnership and to which persons a specified number of shares may be assigned. Limited partners are not liable for the debts and obligations of the partnership beyond the amount they have contributed. A limited partnership may have a share capital and be limited by shares. Regardless of whether it has share capital or not, a limited partnership is not considered as a legal entity with an independent legal personality.

Economy

Currency strength

Cyprus adopted the Euro as its official currency on 1 January 2008. The Euro is one of the top 10 strongest currencies in the world and is the official currency of 20 out of the 27 countries that form the European Union. Euro coins and banknotes entered circulation in 2002, and the currency is free-floating.

Inflation rates

Inflation (HICP) in September 2023 is estimated to have increased by 4.3% compared with an increase of 3.1% in August 2023. For the period January-September 2023 the HICP is estimated to have increased by 4.4% compared to the corresponding period of the previous year.

Main trade sectors

Tourism remains a cornerstone of Cyprus' economy, with 2024 marking a record-breaking year for visitor arrivals and revenue. The sector has fully rebounded from the impacts of the COVID-19 pandemic, with over 4 million tourists generating more than €3 billion in revenue. The government continues to promote Cyprus as a premier travel destination, leveraging its rich history, picturesque landscapes, and strategic Mediterranean location.

Real estate remains a strong driver of economic activity, attracting both domestic and foreign investment. Cyprus' property market saw continued resilience, with 19,155 property transfers worth €4.3 billion in 2024 [In-Cyprus]. Limassol, in particular, remains a hotspot for commercial and residential property development, with high-end projects catering to international buyers. The government has introduced new incentives for foreign investors, further stimulating demand.

The financial services sector continues to thrive, with banks, insurance companies, and investment firms benefiting from Cyprus' favourable regulatory and tax environment. The funds industry has seen exponential growth, attracting a diverse range of international investors. The ship management industry also remains robust, contributing significantly to the economy. Shipping revenues reached €1.26 billion in 2023, accounting for 4.23% of the country’s annual GDP [Kathimerini].

The energy sector has witnessed notable advancements, particularly in natural gas exploration and renewable energy. ExxonMobil commenced gas drilling off the Cypriot coast in early 2025, reinforcing Cyprus' role as an emerging energy hub. Investments in solar power and green energy initiatives continue to grow, aligning with the country's sustainability goals and EU directives.

Technology and innovation have become major economic drivers, with Cyprus emerging as a regional leader in fintech, ICT services, and start-ups. The tech sector contributed significantly to GDP growth in 2024, with fintech firms attracting substantial foreign investment. In fact, according to the Cyprus Mail, the ICT sector contributed up to 15 per cent of the country’s GDP and generated approximately €4 billion in revenue in 2024, positioning the country for further growth. . The government remains committed to fostering innovation through tax incentives, funding programs, and business-friendly policies.

As Cyprus moves forward in 2025, these key sectors—tourism, real estate, financial services, shipping, energy, and technology—will continue to shape the nation’s economic landscape, reinforcing its status as a dynamic and attractive destination for business and investment.

Legal system

How does the legal system operate? What should clients be mindful of when doing business in your jurisdiction?

Cyprus is primarily a common law jurisdiction with a justice system which is based on the adversarial model. This is a legacy from its period as a British colony.  Much of Cypriot legislation is based on the UK laws in force at the time Cyprus ceased to be a colony.  It is updated and amended regularly to ensure alignment with all relevant EU Guidelines and Directives.  Where there is no applicable Cypriot legislation, English common law and equity are applicable, and English authorities have persuasive force.  The courts are bound by the doctrine of precedent according to which where the common law has been interpreted by the Supreme Court of Cyprus in a particular way, the subordinate courts will be bound by that interpretation. This offers the parties to a commercial action the advantages of consistency, predictability, and efficiency.

Foreign investment restrictions

Regulatory environment

Cyprus, as an EU member state, operates within a regulatory framework that encompasses various sectors, each designed to promote economic growth, protect the rights of consumers and investors, and ensure compliance with international standards. In the financial realm, the Cyprus Securities and Exchange Commission (CySEC) oversees banking, insurance, and investment services, aligning the country with EU directives to maintain financial stability. The nation's competitive tax environment, with a low corporate tax rate and extensive double taxation treaties, positions Cyprus as an attractive hub for international businesses, and the government actively combats tax evasion and money laundering. Moreover, Cyprus upholds robust labor regulations and fosters fair working conditions, while consumer protection measures are in place to safeguard consumers' rights. The regulatory landscape here extends to environmental protections, legal systems, and data privacy, with an overarching commitment to EU standards.

Cyprus also ensures a conducive environment for business operations and investment. The Department of Registrar of Companies and Official Receiver facilitates the registration of various business entities, welcoming foreign investment. In the real estate and construction sectors, regulations maintain construction quality and safeguard buyer rights, while in the telecommunications and IT domains, regulatory bodies ensure competition, service quality, and data protection. These efforts are complemented by a robust legal system based on English common law principles, providing the legal foundation for contracts, property rights, and dispute resolution.

In response to global concerns, Cyprus has implemented comprehensive measures in areas such as anti-money laundering and counter-terrorism financing, aligning its regulations with international standards and EU directives. Additionally, the country complies with the General Data Protection Regulation (GDPR), ensuring the privacy and security of personal data. In healthcare and pharmaceuticals, Cyprus adheres to EU standards in the delivery of healthcare services and the regulation of pharmaceutical products. Overall, Cyprus' regulatory environment reflects its commitment to maintaining a thriving economy, protecting individual rights, and adhering to international norms in various sectors of governance.

Direct investment

The Cyprus government has an established record of seeking to encourage foreign direct investment into the country in order to diversify its economy. The tax system has played an important role in these efforts and consequently the  Cyprus tax regime has evolved into being one of the most attractive in Europe for individuals, investors and businesses.

Restrictions on foreign capital

There are currently no restrictions on ownership and investment in Cyprus.

Foreign exchange controls

Cyprus imposes no capital restrictions but as with other EU countries, travelers to the island must declare cash sums exceeding EUR10,000 upon arrival.

Firms in the Spotlight
Interviews
ViewView
Comparative Guides
ViewView
News & Developments
ViewView

ARTICLE ON THE ESTABLISHMENT OF THE NATIONAL SANCTIONS IMPLEMENTATION UNIT (NSIU)

The establishment of the National Sanctions Implementation Unit (NSIU) with the Greek acronym: EMEK, through The Law on the Establishment of the NSIU (L.150 (I) 2025 with effect as of 25th July 2025, constitutes a major development in Cyprus’ sanctions legal framework. The House of Representatives plenary approved the "National Sanctions Implementation Unit Law" (NSIU). Statements emphasized Cyprus’ commitment to high international and EU standards, enhanced protection of the financial system, and strengthened mechanisms to prevent and penalize sanctions evasion. The formation of the NSIU was supported by three legal instruments: • The Law on the Establishment of the NSIU • The Law criminalizing violations of EU restrictive measures • An amendment to the Law on the Protection of Persons Reporting Violations of EU and National Law The broad powers of the NSIU include among others: • Investigating suspected violations of national, EU and UN sanctions and imposing administrative fines (up to €100,000 plus €100 per each day for non-compliance) • Reviewing applications and issuing sanctions-related licences and exemptions • Issuing binding directives, circulars and guidance • Coordinating enforcement efforts across local regulatory and law enforcement authorities • Collecting and exchanging information with local and foreign authorities • Freezing assets Individuals and legal entities have the obligation to report to the NSIU of funds or assets belonging or controlled by sanctioned persons and designated persons listed in EU sanctions have the obligation to disclose to the NSIU all funds and assets owned or controlled. Non-compliance with the above, gives the right to NSIU to impose administrative sanctions which may have potential criminal liability. The NSIU is expected to be fully operational by the end of 2025. How MPC can assist MPC Legal closely monitors the developments relating to EU sanctions and may assist with the evaluation of the application of the new framework, provide tailored advice and prepare, submit and monitor relevant applications to the NSIU.
Marilou Pavlou Christodoulides LLC - September 29 2025

Sanctions adopted following Russia’s military aggression against Ukraine.

The European Union (EU) continues to adopt further packages of economic sanctions against Russia due to the continuance of its military aggression against Ukraine, the latest of which is summarised below. The relevant legal framework is EU Regulation 269/2014 concerning restrictive measures in respect of actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine (“Regulation 269”) and EU Regulation 833/2014 concerning restrictive measures in view of Russia's actions destabilising the situation in Ukraine (“Regulation 833”) (hereinafter collectively referred to as the “EU Sanctions”). Note: The position is constantly evolving. Additional sanctions may be introduced in the coming days and these will be the subject of future articles. This information is: of a general nature only and is not intended to address the specific circumstances of any particular individual or entity; not necessarily comprehensive, complete, or up to date; not professional or legal advice (if you need specific advice, you may consult us). 17th SANCTIONS PACKAGE The European Union adopted on 20th of May 2025 its 17th sanctions package in response to Russia’s ongoing war against Ukraine through the Council Regulation (EU) 2025/932 of 20 May 2025 amending Regulation (EU) No 833/2014 concerning restrictive measures in view of Russia’s actions destabilising the situation in Ukraine and through the Council Regulation (EU) 2025/933 of 20 May 2025 implementing Regulation (EU) No 269/2014 concerning restrictive measures in respect of actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine. The 17th package is EU’s largest ever package targeting Putin’s shadow fleet, doubling the number of vessels included in the list of those subject to a port access ban, ban on provision of a broad range of service. This package is also aiming to further restrict Russia's access to battlefield technologies, cut revenues from Russian energy imports and also introduces new hybrid, human rights, and chemical weapons-related sanctions. Key elements of the 17th package: Russian’s Shadow Fleet New 189 vessels originating from third countries were targeted (primarily oil tankers), bringing the total of designated vessels to 342. This “shadow fleet” – a loosely affiliated network of ships is responsible for transporting Russian oil while practicing irregular and high-risk shipping practices and/or supporting Russia’s energy sector.  Energy Sector EU has sanctioned major Russian energy actors including Surgutneftegaz, a major Russian oil company which provides substantial revenues to the Russian government, directly fuelling its war effort and Eiger Shipping DMCC, a Dubai based entity that controls vessels that transport crude oil or petroleum products, originating in Russia or exported from Russia, while practicing irregular and high-risk shipping practices. Military-Industrial Complex EU is imposed sanctions on more than 45 Russian companies and individuals providing the Russian army with weapons, drones, military equipment, ammunition, critical components and logistical support. New 31 companies were added to the list since they are providing direct or indirect support to Russia's military industrial complex, or engaged in sanctions circumvention, subject to tighter export restrictions concerning dual use goods and technologies. This includes companies established in Russia and in third countries (Turkey, Vietnam, UAE, Serbia and Uzbekistan). Additional Listings This package introduces 75 additional listings, including 17 individuals and 58 entities, responsible for actions undermining the territorial integrity, sovereignty, and independence of Ukraine. The sanctions imposed include asset freeze and prohibition to make economic resources available and – in the case of individuals – also includes travel bans. Trade Measures The package further expands the list of dual use and advanced technology items subject to export restrictions with the aim of cutting Russia off from key technologies, in particular for military use, such as chemical precursors to energetic material and spare parts and components of high‑precision Computer Numerical Control (CNC) machine tools. Russian Hybrid Threat and Human Rights Violation Additional restrictive measures were imposed by EU against 21 individuals and 6 entities responsible for Russia’s destabilising actions abroad. EU in addition imposed restrictive measures on 28 individuals responsible for serious violations of human rights and the repression of democratic opposition. The new listings target members of the Russian judiciary: judges, prosecutors, representative of the Supreme Court of the Russian Federation and regional courts, as well as members of the Investigative Committee. _______ Authors Marilou Pavlou Christodoulides | Partner Stella Kagia | Senior Associate
Marilou Pavlou Christodoulides LLC - September 29 2025

EU Sanctions Compliance: Guidance Through Regulatory Challenges

Spurred by recent international events involving Ukraine, Russia, China, Iran, Venezuela, and North Korea, among others, complex export controls, economic sanctions and trade embargoes continue to evolve. In particular, the EU has adopted a wide range of restrictive measures against Russian individuals and entities in order to cripple Russia’s ability to finance the war. Navigating the complex landscape of EU sanctions can be challenging, particularly for companies operating in multiple jurisdictions or with international supply chains. MPC Legal’s sanctions compliance team offers specialized key services, as listed below, to help businesses remain compliant with the EU Sanctions while minimizing risk and ensuring smooth operations. Sanctions Risk Assessment MPC Legal performs comprehensive risk assessments to identify potential sanctions-related risks in your business operations. This involves analysing your supply chains, customer base, and partner relationships to detect any links to sanctioned entities or regions. A thorough risk assessment lays the foundation for a robust compliance strategy. Legal Consultation and Compliance Strategy Once risks are identified, our Firm can help you develop a tailored compliance strategy. This includes advising on EU sanctions regulations, offering legal opinions on the matter and providing guidance on how to align your business practices with the latest laws based on our people’s deep expertise in EU regulations who offer insights into best practices for compliance. Sanctions Screening and Due Diligence To ensure compliance with EU sanctions, it's essential to conduct thorough due diligence on customers, suppliers, and other business partners. MPC Legal can assist in implementing sanctions screening procedures, including conducting background checks and utilizing specialized software to identify sanctioned individuals and entities. This proactive approach helps you avoid costly compliance violations. Contract Review and Clause Development Sanctions compliance often requires specific clauses in contracts to protect your business. Our firm’s people can review existing contracts and develop new ones with appropriate sanctions-related clauses. These clauses help ensure that all parties understand their obligations in relation to EU sanctions and mitigate risks associated with non-compliance. Training and Education Compliance is a team effort, and a knowledgeable workforce is crucial for avoiding sanctions violations. MPC Legal can provide customized training sessions for your employees, covering EU sanctions regulations and compliance best practices. This training helps ensure that everyone in your organization understands the importance of compliance and knows how to recognize potential risks. Assistance with Regulatory Inquiries and Investigations If your business is subject to regulatory inquiries or investigations related to EU sanctions compliance, our experienced personnel can provide invaluable support. We can represent you during investigations, respond to information requests, and help you navigate the legal complexities involved. Our expertise can be instrumental in achieving favourable outcomes and minimizing disruptions to your business. Ongoing Monitoring and Compliance Audits EU sanctions regulations change frequently, requiring ongoing monitoring and adjustments to your compliance strategy. Our Firm offers services for continuous monitoring of sanctions lists and regulatory updates. Additionally, it can conduct regular compliance audits to ensure your business remains in line with EU sanctions requirements. Conclusion Compliance with EU sanctions is crucial for businesses operating within the EU and internationally. MPC Legal offers a comprehensive range of services to help you navigate this complex landscape. From risk assessment and compliance strategy to contract review and ongoing monitoring, our people’s expertise can guide you through the regulatory challenges and ensure your business remains compliant while minimizing the relevant risks. Investing in these services can ultimately safeguard your reputation and keep your operations running smoothly in an ever-changing regulatory environment.
Marilou Pavlou Christodoulides LLC - September 29 2025

EU Sanctions Compliance: Guidance Through Regulatory Challenges

Spurred by recent international events involving Ukraine, Russia, China, Iran, Venezuela, and North Korea, among others, complex export controls, economic sanctions and trade embargoes continue to evolve. In particular, the EU has adopted a wide range of restrictive measures against Russian individuals and entities in order to cripple Russia’s ability to finance the war. Navigating the complex landscape of EU sanctions can be challenging, particularly for companies operating in multiple jurisdictions or with international supply chains. MPC Legal’s sanctions compliance team offers specialized key services, as listed below, to help businesses remain compliant with the EU Sanctions while minimizing risk and ensuring smooth operations. Sanctions Risk Assessment MPC Legal performs comprehensive risk assessments to identify potential sanctions-related risks in your business operations. This involves analysing your supply chains, customer base, and partner relationships to detect any links to sanctioned entities or regions. A thorough risk assessment lays the foundation for a robust compliance strategy. Legal Consultation and Compliance Strategy Once risks are identified, our Firm can help you develop a tailored compliance strategy. This includes advising on EU sanctions regulations, offering legal opinions on the matter and providing guidance on how to align your business practices with the latest laws based on our people’s deep expertise in EU regulations who offer insights into best practices for compliance. Sanctions Screening and Due Diligence To ensure compliance with EU sanctions, it's essential to conduct thorough due diligence on customers, suppliers, and other business partners. MPC Legal can assist in implementing sanctions screening procedures, including conducting background checks and utilizing specialized software to identify sanctioned individuals and entities. This proactive approach helps you avoid costly compliance violations. Contract Review and Clause Development Sanctions compliance often requires specific clauses in contracts to protect your business. Our firm’s people can review existing contracts and develop new ones with appropriate sanctions-related clauses. These clauses help ensure that all parties understand their obligations in relation to EU sanctions and mitigate risks associated with non-compliance. Training and Education Compliance is a team effort, and a knowledgeable workforce is crucial for avoiding sanctions violations. MPC Legal can provide customized training sessions for your employees, covering EU sanctions regulations and compliance best practices. This training helps ensure that everyone in your organization understands the importance of compliance and knows how to recognize potential risks. Assistance with Regulatory Inquiries and Investigations If your business is subject to regulatory inquiries or investigations related to EU sanctions compliance, our experienced personnel can provide invaluable support. We can represent you during investigations, respond to information requests, and help you navigate the legal complexities involved. Our expertise can be instrumental in achieving favourable outcomes and minimizing disruptions to your business. Ongoing Monitoring and Compliance Audits EU sanctions regulations change frequently, requiring ongoing monitoring and adjustments to your compliance strategy. Our Firm offers services for continuous monitoring of sanctions lists and regulatory updates. Additionally, it can conduct regular compliance audits to ensure your business remains in line with EU sanctions requirements. Conclusion Compliance with EU sanctions is crucial for businesses operating within the EU and internationally. MPC Legal offers a comprehensive range of services to help you navigate this complex landscape. From risk assessment and compliance strategy to contract review and ongoing monitoring, our people’s expertise can guide you through the regulatory challenges and ensure your business remains compliant while minimizing the relevant risks. Investing in these services can ultimately safeguard your reputation and keep your operations running smoothly in an ever-changing regulatory environment.
Marilou Pavlou Christodoulides LLC - September 17 2025