Cyprus business development organisation law: new funding opportunities for SMEs

By Ramona Livera and Alexandra de Gouveia In July 2026, the Cyprus Business Development Organisation Law 2026 (Law 124(I)/2026) was enacted, providing for the establishment and operation of the Cyprus Business Development Organisation. The organisation is intended to improve access to finance for eligible enterprises registered and operating in the Republic of Cyprus and to address funding gaps identified in the market, in accordance with applicable national and EU state aid rules. The law seeks to address financing gaps identified in the Cypriot market and to facilitate access to appropriate sources of funding for businesses that may face difficulties in obtaining adequate financing through traditional financial institutions and market mechanisms. Initially, the organisation’s role is anticipated to focus on identifying gaps in the availability of finance and facilitating connections between eligible enterprises and appropriate sources of funding In this sense, the organisation may serve as a bridge between businesses seeking finance and potential public, European or other funding sources. In carrying out its activities, the organisation will be required to operate in accordance with applicable national and European Union rules on state aid, as well as the broader regulatory framework governing public funding and financial support to enterprises. The law also seeks to promote and support entrepreneurship, strengthen the international outlook and competitiveness of eligible enterprises, and foster innovation, including their digital and green transition. These areas may also give rise to regulatory, compliance and investment considerations under the evolving EU legal framework. In addition, the aw aims to facilitate the utilisation of European funds and participation in European instruments supporting eligible enterprises. By ‘eligible enterprises’ the law refers to micro, small and medium-sized enterprises which are registered and operate in the Republic of Cyprus. The organisation is expected to become an important institutional mechanism for supporting the financing and sustainable development of Cypriot businesses, while simultaneously promoting economic growth, investment and innovation. It is anticipated that regulations will be enacted and published in due course to regulate matters relating to the implementation of the law and facilitate its effective application and enforcement. The relevant regulations will be particularly important in determining the practical eligibility criteria, conditions and requirements applicable to businesses seeking support. Key considerations for businesses seeking funding For eligible enterprises, accessing the new funding framework may involve a range of legal, corporate and transactional considerations, including: eligibility and regulatory compliance, including assessing whether the business meets the requirements of the relevant financing scheme and ensuring compliance with applicable regulatory and contractual requirements; financing arrangements, including reviewing and, where appropriate, negotiating financing documentation and considering any related security or guarantee requirements; corporate structuring and restructuring, including determining the appropriate structure for investments and corporate arrangements and assessing whether existing debt or corporate structures need to be reorganised to meet funding requirements; legal due diligence and transactional considerations in connection with proposed financing, investment transactions or corporate reorganisations; and contractual and dispute-related matters that may arise in connection with financing arrangements. Businesses considering opportunities under the new funding framework should assess the relevant legal, corporate and financing requirements at an early stage. Appropriate legal structuring and due diligence can help identify potential eligibility or transactional issues in advance, facilitate compliance with applicable funding conditions and support the efficient implementation of the proposed financing. As the organisation becomes operational and the relevant Regulations and financing instruments are introduced, businesses may also need to review their existing corporate and financing arrangements to determine whether any restructuring, additional security arrangements or other legal steps are required to access available funding opportunities. Businesses should therefore continue to monitor developments regarding the Organisation’s operational framework and the funding opportunities it may help facilitate. Ramona Livera is a senior associate and Alexandra de Gouveia is a trainee lawyer at Elias Neocleous & Co LLC