Cyprus is a common law jurisdiction. Its legal system is based on English common law and principles of equity, as developed through judicial decisions. Although certain areas are governed by statute, judicial precedent remains a primary source of law and plays a central role in its interpretation and application.

Construction and engineering projects in Cyprus are subject to a range of statutory and regulatory requirements governing, in particular, licensing, health and safety, planning and building control (see answer 3 below).

A key feature of the Cypriot regime is the requirement for contractors to hold a valid licence issued by the Council for the Registration and Control of Building and Technical Works Contractors. Contractors are classified into categories (typically Classes A, B, C, D, etc.) depending on their technical and financial capacity, and are only permitted to undertake projects falling within the scope and value limits of their registered class.

In addition, projects must comply with applicable planning and building permit requirements, as well as the Streets and Buildings Law (Cap. 96) and related regulations governing the design and construction of buildings.

Health and safety on construction sites is regulated by the Safety and Health at Work Laws and the relevant Construction Site Regulations, which impose obligations on employers, contractors and consultants to ensure safe working conditions and proper site management.

Public procurement is governed by Law 73(I)/2016, where applicable, imposing procedural and compliance obligations on contracting authorities.

Unlike some other jurisdictions, Cyprus does not have a statutory regime prescribing interim payments or adjudication in construction contracts, with such matters typically governed by the contractual framework agreed between the parties

There are a number of specific statutory and regulatory requirements that parties should be aware of in relation to construction and engineering projects in Cyprus.

(a) Health and safety

Health and safety is governed by the Safety and Health at Work Laws of 1996 to 2020 (Law 89(I)/1996), as amended, and the relevant regulations, including the Safety and Health at Work (Minimum Requirements at Temporary or Mobile Construction Sites) Regulations of 2002. These impose duties on employers, contractors and project supervisors in relation to risk assessment, coordination and the implementation of preventive and protective measures. Breach of these obligations may give rise to criminal liability.

(b) Environmental issues

Environmental matters are primarily regulated by the Assessment of the Effects of Certain Public and Private Projects on the Environment Law (Law 127(I)/2018), as amended, which requires environmental impact assessments for certain categories of projects. Additional obligations arise under legislation relating to waste management, water protection and pollution control.

(c) Planning

Planning is governed by the Town and Country Planning Law (Law 90/1972), as amended, pursuant to which a planning permit is required for development. In addition, a building permit must be obtained under the Streets and Buildings Regulation Law, Cap. 96. Permits may be subject to conditions and approvals from the competent authorities.

(d) Employment

Employment matters are governed by general labour legislation, including the Transparent and Predictable Working Conditions Law (Law 25(I)/2023), the Social Insurance Law (Law 59(I)/2010), as amended, and legislation relating to working time and the employment of foreign nationals.

Subcontracting is common in the construction industry. Subcontractors are generally engaged as independent contractors and are responsible for compliance with employment law obligations in respect of their personnel, including the payment of social insurance contributions under the Social Insurance Law (Law 59(I)/2010), as amended.

Parallel obligations may arise in certain circumstances, in particular in relation to health and safety on construction sites, where duties of coordination and supervision are imposed under the applicable legislation.

Additional requirements arise under minimum wage legislation and the Equal Treatment in Employment and Occupation Law (Law 58(I)/2004), as amended. Collective agreements may also apply in certain sectors of the construction industry.

(e) Anti-corruption and bribery

Anti-corruption and bribery are primarily regulated by the Prevention of Corruption Law, Cap. 161, and the Criminal Code, Cap. 154, as amended. In addition, public procurement procedures are subject to transparency and anti-corruption requirements under the Public Procurement Law (Law 73(I)/2016), as amended.

A number of permits, licences and approvals are required at different stages of a construction project in Cyprus.

Before commencing works

Parties are required to obtain a planning permit under the Town and Country Planning Law (Law 90/1972), as amended, and a building permit under the Streets and Buildings Regulation Law, Cap. 96. Depending on the nature and scale of the project, environmental approval may also be required under the Assessment of the Effects of Certain Public and Private Projects on the Environment Law (Law 127(I)/2018), as amended.

Additional permits or approvals may be required where works affect public areas, including roads or utilities infrastructure, or where specific regulatory regimes apply.

During the works

During the execution of the works, parties must comply with the conditions attached to the planning and building permits, as well as with applicable health and safety legislation. Inspections may be carried out by the competent authorities to ensure compliance with approved plans and regulatory requirements.

Upon completion

Upon completion of the works, a certificate of final approval (certificate of approval) must be obtained from the competent authority, confirming that the construction has been carried out in accordance with the issued permits and applicable regulations. This is typically required for the lawful use and occupation of the building.

Penalties for non-compliance

Failure to obtain the required permits or to comply with their conditions may result in administrative and/or criminal penalties, including fines, stop-work orders, or, in certain cases, demolition orders. Non-compliance may also affect the ability to use, transfer or register the property.

In addition, professional or disciplinary sanctions may arise in respect of regulated professionals involved in the project. In particular, engineers may be subject to disciplinary proceedings by the Cyprus Scientific and Technical Chamber (ETEK), while contractors may face sanctions or restrictions in relation to their professional registration or licensing status.

Under Cypriot law, the concept of tort, or extra-contractual liability, is firmly established and primarily governed by the Civil Wrongs Law, Cap. 148, which is largely modelled on common law principles.

In the construction context, claims are most frequently advanced on a contractual basis, reflecting the detailed allocation of risk typically set out in construction agreements. However, causes of action in tort – most notably negligence – remain of practical significance, particularly where a claimant seeks to pursue parallel or alternative remedies against construction professionals such as architects, engineers, or consultants.

It is not uncommon in Cyprus for claimants to frame proceedings cumulatively in contract and in tort, especially in cases involving defective design or supervision. A claim grounded in tort may, in certain circumstances, offer procedural or strategic advantages, including different limitation considerations depending on when damage is discovered.

That said, Cypriot courts, in line with established common law principles, maintain a clear distinction between recoverable loss in contract and in tort. In particular, where no contractual nexus exists between the claimant and the alleged wrongdoer, recovery in negligence for purely economic loss – such as the cost of remedying defects in a building – is generally restricted. Such claims will typically only succeed where a recognised duty of care arises and the loss extends beyond pure economic loss, subject to limited and carefully circumscribed exceptions.

Construction projects in Cyprus are typically structured around a central contracting authority (commonly referred to as the employer or project owner), who engages a main contractor for the execution of the works. Alongside the contractor, a range of professional advisers – including architects, civil engineers and quantity surveyors – are appointed to provide design, supervisory and advisory services, depending on the procurement model adopted.

The main contractor will, in most cases, delegate discrete elements of the works to subcontractors and, where applicable, nominated subcontractors. This layered contractual structure is a defining feature of the construction sector in Cyprus, particularly in larger or technically complex developments.

Procurement responsibilities for materials, machinery and equipment may rest either with the employer or the contractor, depending on the contractual framework (for example, traditional procurement versus design and build). In practice, contractors frequently assume responsibility for sourcing and coordinating supply chains, although employer-led procurement is not uncommon in certain projects, especially where specific materials or systems are prescribed at the outset.

In Cyprus, the most commonly encountered procurement models are the traditional (design–bid–build) approach and the design and build model.

Under the traditional method, the employer retains a team of professional consultants to undertake the full design of the project and to administer the contract during construction. Once the design is sufficiently developed, the works are typically tendered, and a main contractor is appointed to execute the project in accordance with the design and specifications prepared by the employer’s consultants. In this structure, the contractor’s primary obligation is to construct the works, with design responsibility remaining predominantly with the employer’s professional team, subject to limited contractor-designed elements where expressly agreed.

By contrast, the design and build model has gained increasing traction in Cyprus, particularly in larger or time-sensitive projects, due to the allocation of single-point responsibility to the contractor. Under this approach, the employer will usually procure an initial or concept design, which forms the basis of the tender process. The successful contractor then assumes responsibility for both the completion of the design and the construction of the works. In practice, this is often achieved either through the appointment of the contractor’s own design team or by way of novation of the employer’s original consultants to the contractor, thereby consolidating design and construction risk within a single contracting entity.

In Cyprus, the contractual framework for construction projects is shaped by a combination of domestic standard forms, international templates and bespoke agreements.

At a local level, the standard forms issued by the Cyprus Joint Construction Contracts Tribunal (MEDSK) constitute the primary domestic suite of construction contracts. These are widely recognised and utilised across the industry, providing a structured and balanced allocation of risk between employers, contractors and consultants. The MEDSK forms cover a broad range of project types, including traditional lump-sum contracts, design and build arrangements and subcontracting structures, and are frequently adopted—often with project-specific amendments—in both private and public sector works.

In parallel, widely used local standard forms include those published by the Cyprus Scientific and Technical Chamber (ETEK) and the Cyprus Association of Civil Engineers (POEEM), which are frequently adopted in private sector developments, particularly in building projects. These are also encountered in practice, particularly in building projects, although these tend to be used more selectively or as a basis for further contractual refinement.

For projects of greater scale or complexity – particularly in infrastructure and energy – FIDIC forms of contract are regularly utilised, given their international recognition and comprehensive risk allocation mechanisms. FIDIC is also commonly encountered in projects involving international stakeholders or financing institutions.

In the public sector, government-prescribed standard forms are typically used, especially in public works and infrastructure projects, ensuring compliance with procurement regulations and administrative requirements.

Finally, it is common in Cyprus for parties, particularly in high-value or cross-border developments, to adopt heavily amended or fully bespoke (tailor-made) contracts. These are designed to address the particular risk profile, financing structure and technical demands of the project, often drawing on elements from established standard forms but significantly restructured to meet the parties’ specific needs.

Yes. Public procurement in Cyprus is primarily governed by EU-derived legislation, which has been transposed into national law through the Public Procurement Laws (Law 73(I)/2016, as amended) and related regulations.

These frameworks regulate the award of public works, services and supply contracts by contracting authorities and entities, ensuring compliance with the core EU principles of transparency, equal treatment, non-discrimination and competition.

The regime imposes detailed procedural requirements, including tendering processes, selection and award criteria, and remedies for aggrieved bidders, with oversight exercised by the Tenders Review Authority.

Private sector procurement, by contrast, is not subject to a specific statutory regime and is largely governed by freedom of contract, subject to general principles of Cypriot law.

Yes. In Cyprus, it is standard practice for employers to engage a range of professional consultants to support the delivery of construction projects.

Typically, this includes a project manager (or contract administrator, often the architect), as well as quantity surveyors responsible for cost control and valuation of the works. The design team will usually comprise an architect and various engineers (including civil, mechanical and electrical), with specialist consultants engaged where required depending on the complexity of the project.

Contractors also maintain equivalent technical and managerial functions, most commonly through in-house teams, supplemented where necessary by external specialists.

In terms of appointments, there is no single universally adopted standard form in Cyprus. While forms issued by professional bodies such as ETEK may be used in practice, it is more common – particularly in larger or higher-value projects – for parties to enter into bespoke consultancy agreements, often incorporating elements drawn from international standards but adapted to the specific needs of the project.

Yes. In Cyprus, it is common for main contractors to subcontract significant parts of the works to specialist subcontractors.

The main contractor remains fully liable to the employer for the performance of the works, including the acts and omissions of its subcontractors. This position also applies where subcontractors are nominated or otherwise appointed with the employer’s involvement, subject to the specific terms of the contract.

While there is generally no direct contractual relationship between the employer and subcontractors, employers often secure protection through collateral warranties, allowing direct recourse against key subcontractors.

Construction projects in Cyprus are typically financed through a combination of debt and equity financing.

Commercial and residential developments are generally funded by a mix of bank lending and equity contributions, with financing commonly secured against the project assets, including land and buildings, and, in some cases, shares in the project company. Such financing arrangements are typically supported by guarantees and security, including mortgages and charges over the property and other assets.

In certain cases, particularly in larger or more complex projects, parties may collaborate through joint venture arrangements or consortia, allowing for the sharing of financial resources and technical expertise.

In addition, certain projects, particularly in the areas of infrastructure, energy and sustainable development, may benefit from EU funding programmes and other public funding initiatives, which can support project viability and investment.

Larger projects, particularly in the energy sector, may also adopt elements of project finance, with lenders placing reliance on project revenues, although in practice additional security and sponsor support is often required.

A range of security instruments is commonly used in construction projects in Cyprus to protect employers.

These typically include performance bonds and advance payment bonds. Performance bonds are commonly required by employers to secure the proper performance of the contractor’s obligations and are typically issued by banks. In the Cypriot market, such bonds are commonly structured as on-demand instruments.

Performance bonds are typically maintained until completion of the works or, in some cases, until the expiry of the defects liability period, depending on the terms of the contract.

Retention is also commonly used as a form of security, with a percentage of interim payments withheld until completion and, in part, until the expiry of the defects liability period. In some cases, retention bonds may be provided as an alternative, although cash retention remains the more common approach.

Where advance payments are made, employers typically require advance payment bonds, which are usually issued by banks and are commonly structured on an on-demand basis.

There is no specific or comprehensive legislation in Cyprus governing payment mechanisms in the construction industry.

Payment is primarily governed by the terms of the construction contract agreed between the parties. In practice, standard form contracts commonly used in Cyprus, including those issued by local industry bodies such as the POEEM and forms used in public sector projects (MEDSK), typically contain detailed provisions relating to interim payments, certification procedures and payment timelines.

General principles of contract law under the Contract Law, Cap. 149 apply. In addition, the Late Payment in Commercial Transactions Law (Law 123(I)/2012), as amended, provides for statutory interest in cases of delayed payment in commercial transactions.

There is no specific statutory prohibition in Cyprus on pay-when-paid or pay-if-paid clauses.

The enforceability of such provisions is a matter of contractual interpretation under the Contract Law, Cap. 149. In principle, parties may agree payment terms, including provisions linking payment to the contractor’s receipt of payment from the employer, subject to the interpretation of such clauses by the courts.

In practice, such clauses are not widely used in their strict form and are often subject to negotiation, as they may be considered commercially onerous for subcontractors. However, standard forms used in Cyprus, including the MEDSK contracts, do incorporate provisions of this nature.

That said, it remains more common in practice for contracts to regulate the timing of payments without making payment strictly conditional upon receipt of corresponding funds from the employer.

Retention provisions are commonly included in construction contracts in Cyprus.

Typically, a percentage of each interim payment is withheld by the employer as security for the proper performance of the contractor’s obligations and the rectification of defects.

Retention is usually released in two stages: part upon completion of the works (or the issue of the certificate of completion), and the balance upon expiry of the defects liability period, provided that any defects have been remedied.

The percentage retained and the timing of release depend on the terms of the contract, although retention of approximately 5% of the contract sum is commonly encountered in practice.

In some cases, retention bonds may be provided as an alternative to cash retention, although the withholding of cash remains the more common approach in the Cypriot market.

Yes. Construction contracts in Cyprus commonly include provisions for liquidated damages in the event of delay, typically calculated on a daily or weekly basis.

Such clauses are, in principle, enforceable under Cypriot law, provided they are clearly drafted and do not amount to a penalty. Cypriot courts, following common law principles, will uphold liquidated damages provisions where they represent a genuine pre-estimate of loss or otherwise protect a legitimate commercial interest of the innocent party.

In practice, particularly in contracts negotiated between commercially sophisticated parties, it is relatively uncommon for such provisions to be successfully challenged as penalties.

Yes. Under Cypriot law, parties are generally free to agree contractual limitations or exclusions of liability, subject to certain fundamental restrictions.

In particular, liability for fraud (including fraudulent misrepresentation) cannot be excluded, and any such clauses must not offend public policy. To be enforceable, limitation and exclusion provisions must be clearly drafted and form part of the parties’ agreed contractual allocation of risk.

In practice, especially in agreements between commercially sophisticated parties, Cypriot courts will typically give effect to such provisions, including caps on liability and exclusions of certain categories of loss, provided they have been freely negotiated.

That said, the courts retain a supervisory role and may decline to enforce provisions which are ambiguous, excessively onerous, or otherwise contrary to the principles of good faith and fair dealing.

Under Cypriot law, the principle of freedom of contract is recognised, and parties are generally free to agree the grounds and procedures for termination, subject to the terms of their agreement.

Construction contracts in Cyprus typically include a range of express termination rights, including termination for cause (such as default, delay or insolvency) and, in some cases, termination for convenience, particularly in bespoke or employer-friendly contracts.

In addition, as a matter of general contract law (Cap. 149), a party is entitled to terminate the contract in the event of a repudiatory breach, namely a breach which goes to the root of the contract and evidences an intention not to be bound.

Force majeure is recognised in Cyprus only where expressly provided for in the contract. Accordingly, the scope, operation and consequences of force majeure depend entirely on the agreed contractual wording. In the absence of such provision, parties may seek to rely on the doctrine of frustration, although this is applied restrictively by the courts.

Under Cypriot law, the doctrine of privity of contract applies, with the result that third parties cannot, as a general rule, enforce rights under a contract to which they are not a party.

In the construction context, this position is typically addressed through the use of collateral warranties. These are separate agreements entered into between the contractor (and/or consultants) and third parties such as funders, purchasers or tenants, granting them direct contractual rights in respect of the performance of the works or services.

Unlike some other jurisdictions, Cyprus does not recognise a general statutory framework for third-party rights equivalent to contractual enforcement by non-parties. As such, collateral warranties remain the primary mechanism for extending rights to third parties.

In practice, these instruments are widely used in larger developments and are often required by funders or subsequent purchasers as part of the project’s contractual structure.

Yes. Construction contracts in Cyprus commonly include detailed notice provisions governing claims for extensions of time and additional payment, often requiring contractors to notify claims within specified timeframes.

Whether such provisions operate as conditions precedent depends on the drafting. Cypriot courts, applying common law principles, will generally give effect to clearly worded time-bar clauses, including those expressed as conditions precedent, even where the consequences may be strict.

In practice, standard forms such as FIDIC—which are frequently used in Cyprus—expressly provide that failure to comply with notice requirements may result in loss of entitlement. However, where the contractual wording is less explicit, such as ETEK or POEEM or MEDSK  the courts may be reluctant to treat such provisions as absolute bars to recovery.

Construction contracts in Cyprus typically require parties to maintain a range of insurances, reflecting the allocation of risk under the project.

Contractors are usually required to maintain contractors’ all risks (CAR) insurance covering physical loss or damage to the works, materials and site, generally until completion of the project. Public liability insurance is also standard, covering third-party injury or property damage during the execution of the works.

Professional indemnity insurance is required for consultants and for contractors undertaking design obligations, and is typically maintained for the duration of their liability period under the contract.

Employers’ liability insurance is mandatory under Cyprus law and must be maintained throughout the period of employment.

For larger or more complex projects, additional project-specific insurances may be required, such as delay in start-up (DSU) or advance loss of profits (ALOP), particularly where the project is intended to generate revenue.

In practice, many contractors maintain annual insurance policies covering multiple projects, subject to project-specific requirements and limits.

Construction and engineering disputes in Cyprus are typically resolved through litigation or arbitration.

Litigation before the Cypriot courts remains a common method of dispute resolution, particularly where no arbitration agreement exists. The courts have jurisdiction to hear contractual and tortious claims arising out of construction projects.

Arbitration is also widely used, especially in MEDSK and POEEM contracts involving larger or more complex projects, or where there is an international element and the parties agreed to enter into an arbitration agreement. Arbitration proceedings are governed by the Arbitration Law, Cap. 4, and the International Commercial Arbitration Law (Law 101/1987).

Adjudication is not established as a statutory dispute resolution mechanism under Cypriot law. However, it has recently been introduced on a contractual basis through the updated MEDSK standard forms, which incorporate adjudication as an interim dispute resolution procedure. Accordingly, its availability and operation depend entirely on the parties’ agreement rather than any legislative framework.

Alternative dispute resolution methods are also available, including mediation and other forms of amicable settlement, which may be agreed between the parties on a contractual basis.

The Cypriot courts are generally supportive of both domestic and international arbitration.

In relation to domestic arbitration, the courts recognise and uphold arbitration agreements and will generally stay court proceedings in favour of arbitration where a valid arbitration agreement exists.

In relation to international arbitration, the courts adopt a similarly supportive approach and facilitate the recognition and enforcement of arbitral awards in accordance with Cyprus’ obligations under the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards.

Enforcement of arbitral awards is typically carried out through an application to the Cypriot courts. In straightforward cases where there is no challenge, enforcement may be obtained within a relatively short timeframe, although the duration will depend on the circumstances of the case and whether any objections are raised.

Where challenges or procedural issues arise, enforcement may take longer, particularly if court proceedings are contested.

Yes, limitation periods apply to the commencement of claims in Cyprus.

The primary legislation governing limitation periods is the Limitation of Actions Law (Law 66(I)/2012), as amended.

For contractual claims, the limitation period is generally six years from the date on which the cause of action accrued. However, shorter limitation periods apply in certain cases. In particular, claims relating to agreed or reasonable remuneration of contractors, architects, engineers and other independent professionals are subject to a limitation period of three years.

The applicable limitation period will depend on the nature of the claim and the specific circumstances of the case.

Multi-party disputes are relatively common in construction and engineering projects in Cyprus, given the number of parties typically involved, including employers, contractors, subcontractors and consultants.

In practice, the main contractor typically assumes primary responsibility towards the employer for the performance of the works, including works carried out by subcontractors, subject to the terms of the main contract.

Liability between multiple parties is determined by the courts based on the contractual arrangements between the parties and the extent to which each party is found to have contributed to the loss, in accordance with general principles of contract and tort law.

The allocation of liability will therefore depend on the specific facts of each case, the contractual framework governing the parties’ relationship, and the principal cause of action upon which the claimant relies.

While parties are generally free to agree contractual provisions addressing the allocation or limitation of liability, including provisions which seek to limit a party’s liability to a proportionate share of the loss, such clauses are not commonly encountered in the Cypriot construction market.

The construction sector in Cyprus is currently facing a combination of economic and regulatory challenges, while continuing to present significant opportunities for growth.

Key challenges include increased construction costs, driven by inflationary pressures on materials and labour, as well as higher financing costs, which continue to affect project viability and investment decisions. Although supply chain disruptions have eased, cost volatility remains a concern. The sector is also impacted by ongoing shortages of skilled labour.

A further challenge arises from recent administrative reforms affecting the permitting process. In particular, the implementation of the ‘Ippodamos’ digital system, together with the restructuring of local authorities, has resulted in delays in the issuance of planning and building permits and a backlog of applications, impacting project timelines.

Notwithstanding the above, the sector continues to benefit from sustained investment in real estate development, tourism and infrastructure projects. Additional opportunities arise from the increasing focus on sustainable construction, including energy-efficient developments and renewable energy projects, supported by EU funding and national initiatives.

In the medium to long term, the ongoing digitalisation of permitting processes and the adoption of new construction technologies are expected to enhance efficiency and support further growth in the sector.

Investment in the construction sector in Cyprus is currently concentrated in a number of key areas, reflecting both domestic demand and foreign investment trends.

Residential development remains the primary driver of investment, particularly in urban centres such as Limassol, Nicosia and Larnaca, supported by strong demand from both local purchasers and foreign investors.

Significant investment is also directed towards commercial and mixed-use developments, including office buildings, retail spaces and high-rise developments, particularly in Limassol, which continues to attract international business activity and real estate investment.

Tourism-related projects, including hotels, resorts and leisure developments, remain a key area of investment, supported by Cyprus’ position as a regional tourism hub and ongoing efforts to enhance infrastructure and visitor facilities.

Infrastructure and civil engineering projects, including road networks and public works, also continue to attract investment, supported in part by public funding and EU programmes.

In addition, there is increasing investment in energy and sustainable development projects, including renewable energy and energy-efficient construction, driven by environmental policies and growing demand for ‘green’ buildings.

Technological innovation is expected to have an increasing impact on the construction and engineering sector in Cyprus over the next five years, both in terms of project delivery and the management of contractual relationships.

In this context, ‘technology’ encompasses both the use of digital tools to manage contractual obligations, such as building information modelling (BIM) and other data-driven systems, as well as the incorporation of technology into the construction process itself, including modular construction and advanced design methodologies.

The use of such technologies is expected to increase, particularly in larger and more complex projects, although adoption may vary depending on cost considerations, technical expertise and project scale.

The growing use of technology is also likely to present challenges for traditional construction contracting models. In particular, standard form contracts may not always adequately address the allocation of risks associated with the use of digital tools, off-site construction methods or integrated project delivery approaches. As a result, contracts are likely to evolve through more bespoke drafting to address such issues.

In addition, technology is expected to play a greater role in the management and resolution of disputes. The increased availability of project data is likely to enhance the evidential basis for assessing claims relating to delay, disruption and defects. The use of data analytics and, to a more limited extent, artificial intelligence, may contribute to more efficient dispute resolution processes in arbitration and litigation.

Ongoing supply chain pressures and the escalation of material costs are expected to continue to impact the construction sector in Cyprus over the coming year.

Employers and contractors will need to actively engage with these challenges in order to agree an appropriate and commercially viable allocation of risk. This is likely to be reflected in contractual provisions addressing price fluctuation, procurement strategies and potential delays.

The current environment has also introduced a degree of caution in the market, with both developers and contractors placing increased focus on costs and return on investment when assessing the viability of projects.

At the same time, these challenges present opportunities. Market participants are increasingly exploring diversification into new sectors, as well as the adoption of new technologies and methods of working, both to address current pressures and to support the longer-term evolution of the industry.