Cyprus

Market Overview

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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.

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Press Releases

Elias Neocleous & Co LLC Delivers Key Insights at the Legal500 GC Summit 2026

Continuing its active involvement in this prestigious international summit, Elias Neocleous & Co LLC sponsored the Legal500 GC Summit 2026 in Cyprus, marking eight consecutive years of support. The Legal500 GC Summit is widely recognised as a key platform for dialogue between in-house counsel and leading law firms, fostering collaboration, knowledge exchange and meaningful discussion of emerging legal and regulatory developments. Held at the Landmark Nicosia Hotel, the conference welcomed approximately 100 leading lawyers and in-house counsel from high-calibre companies across Cyprus. The event provided an opportunity for participants to interact, network, and discuss current legal and regulatory developments, including the recent incorporation of EU Regulation 2019/452 into Cyprus law through The Law on the Establishment of a Framework for the Control of Foreign Direct Investments (FDI) of 2025, which is scheduled to enter into force on 2 April 2026. This timely topic was the focus of an engaging panel delivered by Elias Neocleous & Co LLC. The panel explored the concept of investing with foresight under the new FDI screening mechanism and featured the following speakers: Mrs. Andrea Kallis, Partner at Elias Neocleous & Co LLC; Mr. Alexey Drobyshev, Deputy Chief Legal Officer at Sumsub; Mrs. Rafaella Charalampous, Senior Legal Counsel at Pepperstone EU Limited; Mr. Emilios Charalambous, Associate Lawyer at Elias Neocleous & Co LLC. Following the opening remarks by Mrs. Andrea Kallis, the key aspects of the new law were presented by Mr. Emilios Charalambous, who outlined its background, scope, process, and potential impact. His introduction set the foundation for a high-level and informed legal discussion. In turn, Mrs. Rafaella Charalampous, drawing on her experience in corporate structuring, shared her views on whether the new provisions are likely to deter or attract foreign capital. The discussion addressed the possibility of fund rerouting through alternative legal structures or jurisdictions with less stringent screening frameworks. In the same vein, Mr. Alexey Drobyshev provided his perspective on how the new law may be received by affected foreign investors and offered a broader assessment of whether such regulations contribute to making the European Union a safer and more attractive investment destination. The panel concluded with Mr. Emilios Charalambous offering practical guidance to the lawyers and General Counsels present on how best to support their clients under the new framework. Before closing the session, Mrs. Andrea Kallis presented four key questions that the firm had raised with the Ministry of Finance, as the supervising authority of the FDI law, together with the responses received. This provided the audience with further clarity on the regulator’s approach and intentions going forward. Overall, the panel delivered valuable insights into the operation, implications, and evolving perceptions of Foreign Direct Investment (FDI) in Cyprus, reaffirming Elias Neocleous & Co LLC’s commitment to contributing meaningfully to the legal community and to the development of an effective and sustainable services industry. For more information of inquiries, please contact our Partner Mrs. Andrea Kallis Parparinou at [email protected], or our Associate Mr. Emilios Charalambous at [email protected]
Elias Neocleous & Co LLC - February 18 2026
Real estate and construction

Court of Appeal Ruling on Unlawful Occupation Following Lease Termination

Pursuant to Article 281(1)(a) of the Criminal Code, Cap. 154 and based on a recent case law from the Cyprus Court of Appeal it has been confirmed that tenants who remain in possession of immovable property after lawful termination of a lease, may be held criminally liable for unlawful occupation. This development strengthens the legal position of property owners and clarifies the interaction between civil and criminal remedies in tenancy disputes. While a tenant initially enters into possession lawfully under a lease, that consent ceases once the lease is validly terminated and a clear demand for vacant possession is made. The offence carries penalties including imprisonment, a fine or both where applicable. Historically, disputes over possession after the end of a lease were treated predominantly as civil matters governed by contract and property law. However, this approach has now expanded in scope following a recent appellate decision. In accordance with the landlords, the ruling provides an additional enforcement mechanism alongside civil proceedings for recovery of possession and damages through criminal complaints against the tenants who remain in possession after termination of the lease. The landlords should avoid changing locks or forcibly removing tenants prior court instructions, as such actions may expose the landlord liable and are not sanctioned by this new criminal route. It is essential that termination notices are drafted clearly, served properly, and specify a deadline for delivery of possession. This strengthens the evidence of withdrawal of consent when initiating any criminal complaint. It should be noted that criminal action for unlawful possession does not substitute for a civil court order for possession. Landlords should proceed if they wish with civil claims for possession and damages, even if a criminal complaint is filed simultaneously. This judicial development marks a significant shift in the enforcement of property rights in Cyprus and how post-termination occupation is treated under Cyprus law. Both landlords and tenants should seek timely legal advice to ensure their rights are protected and to avoid unintended criminal exposure. For more information please contact our senior advocate Cathy Georgiou. ... Article by Kathy Georgiou – Senior Advocate – E&G Economides LLC [email protected] Cathy holds a Bachelor of Laws from the University of Nicosia in 2012 and she was admitted to the Cyprus Bar Association in 2013. During her career, she excelled in a wide spectrum of areas. At the same time, Cathy was trained and then specialized as a litigation and dispute resolution lawyer where she acquired significant experience at areas such as Family, Tort, Contracts, Immigration, Civil and Criminal Law. Cathy also possesses excellent contract drafting skills and is up-to-date with relevant legislation. In her current position, Cathy is focusing on projects and transactions relating to real estate law, the drafting of wills and probates, immigration/employment issues and other relevant matters related to litigation and dispute resolution.
E & G Economides LLC - February 10 2026
Commercial, Corporate and M&A

Foreign (non-EU) Direct Investment Screening in Cyprus

Cyprus has enacted its first dedicated legislation governing the review of foreign direct investments that may affect matters of security or public order. The Law on the Establishment of a Framework for Screening Foreign Direct Investments of 2025 (Law 194(I)/2025) will apply as from 2 April 2026. The new law gives effect to Regulation (EU) 2019/452, introducing a formal review process for certain investments by non-EU investors into Cyprus businesses. What is a Foreign Direct Investment The Law adopts a wide understanding of foreign direct investment. It covers any form of investment by a foreign investor that is intended to create or preserve a stable and direct relationship with a Cyprus undertaking, where the investor is able to participate effectively in the management or control of that undertaking. Foreign investors include both individuals and legal entities established outside the European Union, the European Economic Area and Switzerland. When Prior Notification Is Required The competent authority must be notified before an investment is completed if the following conditions apply cumulatively: the value of the investment reaches EUR 2 million or more, either as a standalone transaction or together with related transactions concluded between the same parties within a twelve month period;   the target undertaking operates in a sector considered sensitive under the Law; and   the investment leads to the acquisition of 25% or more of the share capital or voting rights, whether directly or indirectly. Role of the Ministry of Finance Responsibility for the assessment of FDIs rests with the Ministry of Finance, which acts as the competent authority. Where notification is mandatory, as per the above conditions, the transaction cannot be completed unless approval is granted. The Ministry also has the power to examine investments that fall outside the mandatory thresholds if they are considered capable of affecting security or public order. In such cases, the Ministry may initiate a review within 15 months of completion. Where a notifiable investment has been completed without prior notification, the review window extends to five years. Review Procedure and Timeframes Once a notification is submitted, the Ministry has 20 business days to decide whether a full review will take place. If no review is initiated, the investor is informed shortly thereafter. If the investment proceeds to screening, the Ministry must reach a final decision within 65 business days, determining whether the investment raises concerns for the Republic of Cyprus. Sanctions for Non-Compliance Failure to submit notification may result in administrative fines, alongside other corrective measures available under the Law. In serious cases, the Ministry may seek court order to prevent or pause an unlawful transaction. Any decision taken by the Ministry may be challenged before the Administrative Court. Foreign investments in Cyprus will now go through a statutory approval process based on investor origin, transaction value and sectoral activity. This introduces an additional regulatory step that did not previously exist and which may affect both the timing and execution of certain transactions. In practice, investors and sellers will need to assess at an early stage whether a proposed transaction falls within the scope of the Law, as completion without the required clearance may expose the parties to sanctions and post-completion intervention by the authorities. … Author details: Michalis Nikolaou – Advocate [email protected] Michalis holds a Bachelor of Laws (LL.B) from the University of Sunderland in the UK, and a Master’s degree (LL.M) in Commercial and Company Law from Erasmus University in the Netherlands. He successfully passed the Cyprus Bar exams in 2022 and upon the successful completion of his legal training in a reputable law firm in Limassol, where he was involved in various litigation and corporate matters, he was admitted to the Cyprus Bar Association in 2022. In his current position in our firm, Michalis focuses on corporate and commercial matters as well as drafting and reviewing corporate agreements of various sorts and legal transactions. In addition, Michalis provides assistance on cases and matters relating to real-estate transactions.
E & G Economides LLC - February 10 2026
Intellectual property

SME Fund 2026: Protect your IP with EU funding

Cost barriers for trademark applications often hinder small businesses from securing intellectual property rights. Recognising this challenge, the European Union Intellectual Property Office (EUIPO) has introduced an ambitious €60 million fund designed to assist Small and Medium-sized Enterprises (SMEs) with their IP protection efforts. This new SME Fund 2026 aims to significantly lower the financial hurdles associated with registering trademarks and obtaining other IP protections. Building on the success of previous initiatives, the program provides extensive support for a wide range of IP activities. It not only covers trademarks but also extends to patents, designs, and plant variety rights. The primary goal of the fund is to promote equal access to intellectual property protections throughout the European Union, empowering smaller businesses to defend their innovations and brands. Consequently, SMEs can now overcome previous financial barriers that limited their ability to secure essential IP rights in competitive markets. Fund aims to reduce costs for trademarks, patents, and designs The 2026 SME Fund offers financial assistance through a voucher system that significantly reduces the costs associated with various IP protections. For trademark applications and designs, businesses can receive a 75% reimbursement on fees at national, regional, and EU levels. This includes application fees, additional class fees, examination, registration, and publication costs. Moreover, the fund covers patent applications with equally generous support. SMEs can claim 75% reimbursement on national patent applications and state-of-the-art search reports, up to €1,000. For European patents, the fund offers 75% reimbursement on filing and search fees with the European Patent Office, plus 50% on legal costs for drafting and filing applications by professional representatives, with a combined maximum of €2,500. Additionally, the fund extends to plant variety protection, offering a 75% reimbursement on online application and examination fees before the Community Plant Variety Office, up to €1,500. For businesses seeking strategic IP guidance, the fund provides up to 90% reimbursement for IP Scan services . The voucher structure allows businesses flexibility in choosing the protections they need. Who is eligible under the SME FUND: Definition of SMEs under EU law The European Union defines Small and Medium-sized Enterprises based on three main criteria: staff headcount, annual turnover, and annual balance sheet total. According to EU recommendation 2003/361, businesses must fall within these thresholds: For classification purposes, a medium-sized enterprise employs fewer than 250 staff members, with an annual turnover not exceeding €50 million and an annual balance sheet total of up to €43 million. A small enterprise is defined as having fewer than 50 employees, with annual turnover and balance sheet totals each not exceeding €10 million, while a micro enterprise employs fewer than 10 staff members and reports annual turnover and balance sheet totals of up to €2 million. These ceilings apply to individual firms only. However, businesses that are part of larger groups may need to include staff headcount, turnover, and balance sheet data from the entire group when determining eligibility. Consequently, enterprises cannot qualify if 25% or more of their capital or voting rights are directly or indirectly controlled by one or more public bodies. Application Period Opens: 2 February 2026 Closes: 5 December 2026 Protecting your intellectual property is an investment in your business’s future. Our Head of IP & Data Protection, Xenia Kasapi, is available to assist with your application and advise on how to maximise your IP protection. About Xenia Kasapi Xenia holds a Bachelor of Laws from The University of Sheffield and a Master of Commercial Law from the University of Bristol. She is a member of the Cyprus Bar Association and the Chartered Institute of Arbitrators, with expertise in intellectual property, data protection, and corporate law. She is also a PhD candidate at the University of Cyprus, researching intellectual property law.
E & G Economides LLC - February 10 2026
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