Cyprus Business Now: energy, loans, pension funds, gaming, employment, tax treaty

Business & economy wrap-up from the day beforeCyprus is punching above its weight in the European labour market as the latest Eurostat figures reveal a significant surge in the number of people finding work during the opening months of 2026. Indeed, Cyprus was highlighted as one of the standout performers across the bloc, recording an increase in the employment rate of 0.4 per cent between the final quarter of 2025 and the first quarter of 2026. This notable rise places Cyprus alongside Belgium, Lithuania, Slovakia, and Sweden, which all achieved identical growth of 0.4 per cent during the same period. Italy topped the list of countries where employment expanded, registering an increase of 0.5 per cent. Across the European Union as a whole, the employment rate for individuals aged 20-64 reached 76.3 per cent in the first quarter of 2026, representing a marginal rise from the 76.2 per cent recorded in the fourth quarter of 2025. Cyprus retained the third-highest number of pension funds in the eurozone despite a decline of more than 30 per cent over the past five years, according to figures by the Central Bank of Cyprus (CBC). The Central Bank of Cyprus (CBC) released its first statistical report on pension funds for 2025 on Friday, providing an overview of developments in the assets and liabilities of Cyprus-based pension funds, as well as information on the number of funds and their members. According to the report, the total number of pension funds in Cyprus stood at fewer than 600 at the end of 2025, reflecting a decline of more than 30 per cent during the previous five years following the implementation of legislation governing occupational retirement provision. Despite the reduction, Cyprus continues to rank third in the eurozone in terms of the number of pension funds, behind Ireland, which has around 5,000 funds, and Spain, which has approximately 1,000. The Republic of Cyprus on Friday signed an agreement with the government of the Hong Kong Special Administrative Region of the People’s Republic of China aimed at eliminating double taxation on income and combating tax evasion and tax avoidance. “The agreement creates a modern and reliable framework for tax cooperation that is expected to facilitate business activity and strengthen investment flows as well as trade transactions,” the finance ministry said in a statement. “It will also contribute to reducing the overall burden by encouraging sustainable investments, without creating opportunities for tax evasion or tax avoidance, while ensuring legal certainty,” the ministry added. According to the announcement, the bilateral agreement provides for a clear tax treatment of transactions between the two jurisdictions, offering certainty and stability for investors. The convention also provides for the exchange of tax information between the competent authorities and establishes procedures for the settlement of tax disputes. The profitability of Cyprus’ banking sector fell by 23.6 per cent during the first quarter of 2026, according to updated aggregate figures by the Central Bank of Cyprus (CBC). The Central Bank of Cyprus (CBC) published updated aggregate data for the Cypriot banking sector on Friday, covering profitability, balance sheets and capital adequacy, with a reference date of March 31, 2026. According to the figures, banking sector profitability declined by €62 million, a drop of 23.6 per cent, to €202 million during the first quarter of 2026, compared with €264 million recorded in March 2025. The CBC said that the decline was mainly driven by a reduction in net interest income (NII) and by losses arising from foreign exchange differences. At the same time, the total assets of the banking sector increased by €274m, a rise of 0.4 per cent, during the first quarter of 2026. Cyprus’ real estate sector continued to expand sharply in February, with building permits recording strong growth across most categories and pointing to a broader pipeline of residential development. According to a report from the Cyprus Statistical Service (Cystat), a total of 711 building permits were authorised during the month. The total value of these permits reached €379.9 million, while the total covered area amounted to 314,697 square metres. The permits provide for the construction of 1,708 dwelling units, underlining the continued strength of residential activity across the island. During the first two months of the year, 1,500 building permits were issued, up from 1,008 in the corresponding period of 2025. That amounts to a 48.8 per cent year-on-year increase, marking a significant acceleration in construction-related approvals. Cyprus, Greece, Israel and the United States established the Eastern Mediterranean Energy Centre in Houston on Friday and agreed to develop a joint roadmap for future energy cooperation. The agreement was reached during talks involving Energy Minister Michael Damianos, Greek Energy Minister Stavros Papastavrou, Israeli Ambassador Yechiel Leiter and US Energy Secretary Chris Wright. According to a joint statement, the four countries will begin a series of working group meetings in the coming months to prepare a roadmap setting out objectives and actions in areas including energy security, offshore natural gas development, infrastructure, innovation and research. The roadmap is expected to be approved before the end of the year. Zubr Capital investment director Nikita Krivelevich has pointed to artificial intelligence, strong founding teams and Cyprus’ growing gaming ecosystem as key drivers shaping the future of mobile gaming, in comments made during an interview focused on the firm’s investment strategy and its backing of Cyprus-based Soloband Games. Speaking exclusively to the Cyprus Mail about the private equity firm’s approach, Nikita Krivelevich said Zubr Capital, which focuses on Series A and Series B investments, typically targets companies generating more than four to five million dollars in annual revenue, with cheque sizes ranging between five million and 12 million dollars. He said the firm takes a generalist approach rather than focusing on a single sector, although it shows a preference for B2B SaaS companies, mobile applications, artificial intelligence and gaming-related businesses. Nikita Krivelevich highlighted gaming as a particular area of focus due to the firm’s partnership with Wargaming and its experience evaluating more than 20 companies over the past five years, including its decision to invest in Soloband Games, a studio operating in the Merge 2 mobile gaming segment. He said the investment decision was driven by a combination of strong product positioning, a clear market niche and an experienced team, adding that in some cases the firm had chosen not to invest when those elements were missing. The non-performing loan ratio within Cyprus’ domestic banking sector remained unchanged at 1.6 per cent during March 2026, when compared with the figures from December 2025. According to official data from the Central Bank of Cyprus (CBC), total non-performing loans stood at €835 million at the end of March, against a total loan portfolio of €51.3 billion. For comparison, the total volume of non-performing loans in December 2025 was also €835 million, although this was measured against a larger total portfolio of €52.1 billion. Moreover, the data reveals that the non-performing loan ratio for households climbed to 4.4 per cent. The Cyprus Securities and Exchange Commission (CySEC) on Friday issued a public warning regarding an online entity operating without the requisite regulatory approval. The regulator stated that the website j2t.tech does not belong to an entity that has been granted authorisation for the provision of investment services or the performance of investment activities. The commission, which serves as the national financial supervisory authority, is highlighting this discrepancy to ensure the protection of the investing public. Investors are urged to consult the official website of the commission before conducting business with investment firms. This essential step allows members of the public to ascertain the entities that are properly licensed to provide investment services or conduct investment activities in Cyprus. The Finance Ministry on Friday announced the upcoming maturity of the 13-week Treasury Bills associated with the third issue of 2026, which spans the period from March 20, 2026, to June 19, 2026. These government debt instruments, identified under the code TB13C26, are scheduled to reach their full maturity on June 19, 2026. The ministry has confirmed that the final day for trading these bills on the secondary market is June 15, 2026. Freedom24 has announced the appointment of Yerzhan Abdykerov as a member of the company’s Board of Directors, following approval from the Cyprus Securities and Exchange Commission (CySEC). According to its statement, Abdykerov will contribute to the company’s strategic development in his new role, while continuing to oversee Freedom24’s retail business. His responsibilities include the development of the company’s European offices, as well as marketing, sales, customer support and the further enhancement of the customer experience across all key markets where Freedom24 operates. The company said Abdykerov brings many years of experience in the financial sector and has made a significant contribution to the development of Freedom24’s retail business. Cyprus sought to strengthen its profile as a destination for technology companies, start-ups and investors during the Dublin Tech Summit 2026, held end of May at the RDS Dublin in Ireland. The country was represented through an information stand by the Ministry of Energy, the Cyprus Trade Centre in London and Invest Cyprus, as part of efforts to promote Cyprus’ business environment and growing innovation ecosystem to an international audience. The Dublin Tech Summit is regarded as one of Europe’s leading technology and innovation gatherings, bringing together 8,000 participants from more than 70 countries, alongside more than 200 international speakers and around 160 exhibitors from the global technology and digital economy sectors. According to the ministry, the Cyprus stand attracted strong interest from technology executives, investors, entrepreneurs and industry professionals from Europe and other markets. The Institute of Certified Public Accountants of Cyprus (Selk) will hold its 65th annual general meeting on Thursday, June 18, at the Nicosia municipal theatre, marking 65 years since its establishment and its contribution to the accounting profession and the Cypriot economy. The annual meeting, Selk’s main institutional event, is expected to bring together state officials, business representatives, members of the public and private sectors, as well as accountants and auditors from across Cyprus. This year’s event comes at a time when the profession is facing growing demands linked to digital transformation, artificial intelligence, sustainability and an increasingly complex regulatory environment. The Digital Cooperation Organisation (DCO), which Cyprus is a member of, has announced the launch of its Global Expert Community (GEC), a new international platform aimed at mobilising expertise and strengthening collaboration to support high-impact digital initiatives across member states and beyond. The organisation said the initiative represents a further step in its efforts to translate digital cooperation into practical action by expanding access to specialised knowledge and encouraging cross-border collaboration. As digital transformation continues to reshape economies and societies around the world, the Global Expert Community is intended to bring together international perspectives and practical expertise to help develop innovative solutions and advance more inclusive and sustainable digital economies. Deemah AlYahya, Secretary-General of the DCO, said the increasingly complex nature of digital challenges requires stronger international cooperation and broader access to expertise. “Today’s digital challenges require stronger collaboration and access to diverse expertise,” AlYahya said. The Central Bank of Cyprus (CBC) has announced that excess liquidity in the Cypriot banking system declined to €17.4 billion at the end of 2025, down from €18.4 billion a year earlier. The figures were included in a report entitled “The implementation of monetary policy in Cyprus”, which reviewed developments during 2025. According to the central bank, the value of its monetary policy bond portfolio, consisting of securities acquired under the Asset Purchase Programme (APP) and the Pandemic Emergency Purchase Programme (PEPP), fell from €6.5 billion to €5.7 billion during the year. The balance sheet of the Central Bank of Cyprus remained broadly stable in 2025, with total assets increasing marginally from €28.6 billion at the end of 2024 to €28.7 billion by the end of last year. The Cyprus Cement Public Company Ltd announced on Friday that the firm has proceeded with the acquisition of its own shares. The move follows the execution of a decision taken by the extraordinary general meeting of shareholders held on June 26, 2025. During a meeting on June 11, 2026, the company successfully purchased 1,650 of its own shares. The shares were acquired at a price of €1.295 each. The total value of this specific transaction amounted to €2,136.76.