Cyprus Business Now: weekly wrap-up

Here are the top business stories in Cyprus from the week starting August 17: Cyprus has broken into Europe’s ten largest video game industries by revenue, with more than 400 companies on the island generating an estimated €3.2 billion from games in 2025. The finding comes from the first industry report published by the Cyprus Game Makers Association (CYGMA), which attempts to measure a sector that has expanded rapidly but remained largely absent from official statistics. According to the report, 415 game studios and related companies were operating from Cyprus last year. Cyprus-based publishers released 571 new mobile games, which recorded about 615 million downloads, placing the island third worldwide behind China and Vietnam and ahead of the US. The mobile segment as a whole generated an estimated €1.8bn. A further 36 PC and console titles were released, selling about 1.5 million copies, with total revenue from that part of the industry estimated at €1.4bn. Tourist arrivals to Cyprus fell by 1.1 per cent in July, but a 55.8 per cent jump in visitors from Israel kept the overall decline small while nearly every other major market weakened. A total of 582,754 tourists arrived during the month, compared with 589,116 in July 2025, according to figures released on Tuesday by the statistical service (Cystat). Although July remained below last year’s level, arrivals were 5.7 per cent higher than in July 2024, when the island welcomed 551,229 tourists. For the January to July period, arrivals reached 2,238,769, down by 8 per cent from 2,432,129 during the corresponding period of 2025. Cyprus therefore received 193,360 fewer tourists during the first seven months of the year. However, the gap has continued to narrow. At the end of June, arrivals for the year were still 10.1 per cent below 2025, while the monthly decline stood at 1.7 per cent. Crypto users in Cyprus are being urged to check exactly which company holds their assets after the end of the EU’s Markets in Crypto-Assets Regulation, known as MiCA, transition forced unauthorised providers to withdraw and gave fraudsters a convincing new way to target investors. Since July 1, 2026, companies may provide crypto-asset services in Cyprus only if they are permitted to do so under the MiCA. The deadline did not mark the introduction of MiCA itself. Rules covering crypto-asset service providers had applied since December 30, 2024, but Cyprus allowed businesses already operating under its previous national framework to continue temporarily. That arrangement ended on July 1 or earlier if a company’s MiCA application was approved or rejected. The Cyprus Securities and Exchange Commission (CySEC) has warned investors against nine entities that are not authorised to provide investment services or carry out investment activities. In a notice issued on August 14, the regulator said the websites linked to the entities do not belong to firms licensed under article 5 of the Investment Services and Activities and Regulated Markets Law of 2017. Among those named are m4-platform.com and its associated website m4-markets-latam.vercel.app, along with waltonmarketltd.com and investiumlimited.com. CySEC also identified evercrest.capital, gofx.com, tazerpro.com, quantacfd.com, cypriantrustbank.com and omnixmarkets.com. Cyprus has renewed its efforts to attract shipowners to its flag, pointing to tax stability, its European Union status and a strong international inspection record as the registry continues to expand. The Shipping Deputy Ministry said that registering under the Cyprus flag gave owners access to more than a national ship register, particularly as regulatory demands, security concerns and the cost of operating vessels continue to increase. Shipping Deputy Minister Marina Hadjimanolis recently said “one of the Deputy Ministry’s main priorities is to further strengthen the competitiveness of the Cyprus flag and the country’s shipping sector”. Addressing a shipping symposium in Limassol in June, Hadjimanolis said the ministry had been simplifying procedures and creating a more service-oriented environment for companies operating in and from Cyprus. Cyprus recorded annual inflation of 4.4 per cent in July 2026, placing it among the countries with the highest price increases in the European Union, according to figures released on Wednesday by both the Cyprus Statistical Service (Cystat) and Eurostat. The Harmonised Index of Consumer Prices (HICP) rose by 4.4 per cent compared with July 2025 and increased by 0.7 per cent between June and July, according to the statistical service. Eurostat data showed that Cyprus had the joint third-highest annual inflation rate in the EU, alongside Bulgaria, with only Romania at 8.2 per cent and Lithuania at 5.4 per cent recording higher rates. The figure was considerably above the 3.0 per cent EU average and the 2.9 per cent euro area average, meaning Cyprus continued to experience substantially stronger price pressures than the wider European economy. Cyprus has opened a public consultation on changes to its minimum tax rules for large multinational and domestic business groups, with the proposed amendments aimed at bringing national legislation fully into line with EU and international requirements. The consultation, which remains open for comments until September 5, 2026, concerns amendments to the law implementing the global minimum tax framework known as Pillar Two. The changes follow observations from the European Commission during its review of how Cyprus has incorporated the relevant EU rules into national law. The legislation implements the EU directive on ensuring a global minimum level of taxation for multinational enterprises and large domestic groups, as amended by a further EU directive adopted on December 14, 2023. At its simplest, the Pillar Two system requires large multinational and domestic groups with annual revenue of more than €750 million to face a minimum effective tax rate of 15 per cent. Cyprus Airways will expand its year-round network from Larnaca with new direct services to Rome and Munich from December, while also increasing its weekly flights to Heraklion from late October, the airline announced on Wednesday. The new Larnaca-Rome route is scheduled to begin on December 11, 2026, with two flights a week during the winter, operating every Monday and Friday on a year-round basis. The new service will further strengthen Cyprus Airways’ presence in Italy, where the airline already operates a year-round route between Cyprus and Milan, as well as a seasonal summer connection to Venice. The new direct Larnaca-Munich service will begin on December 17, 2026, with two weekly winter flights operating every Thursday and Sunday throughout the year. Cyprus Airways said Munich would add another European destination and connectivity hub to its network, giving passengers another option for travelling between Cyprus and mainland Europe. The government’s plans to reform the pension system were on Wednesday presented to trade unions and other stakeholders, with President Nikos Christodoulides hailing the plans as “the largest and most substantial reform to the pension system carried out since 1980”. He said that the government “aims for more justice, adequacy, and security for every generation” in enacting the reform, and that the reform itself will be “based on two non-negotiable principles: more dignified pensions today, and a sustainable social insurance fund for tomorrow”. Additionally, he said, the reform will “give the greatest support to our low-income pensioners” and “strengthen households’ disposable income”. “Our message to every pensioner, to every worker, to every young person is clear: this reform is being done for you,” he said. Construction activity across the European Union weakened sharply in June, according to Eurostat data released Thursday, although Cyprus is entering the period from a comparatively strong position, backed by a substantial pipeline of projects and rising housing demand. Seasonally adjusted production in construction fell by 1.3 per cent in the euro area and 1.0 per cent across the EU in June compared with May, according to Eurostat’s first estimate. The figures marked a reversal from May, when construction production had increased by 0.2 per cent in the euro area and 0.1 per cent in the EU. On an annual basis, production was 0.7 per cent lower in the euro area in June than a year earlier, while the EU recorded a marginal 0.2 per cent increase. The monthly decline was broad-based, with euro area production falling by 0.9 per cent in building construction, 1.4 per cent in civil engineering and 1.8 per cent in specialised construction activities. Larnaca has been ranked the third-best destination in southern Europe for an autumn shoulder-season getaway, according to a new travel index examining sunshine, temperatures, rainfall and accommodation costs. The Cypriot town placed ahead of several established Mediterranean destinations in the 2026 Shoulder Season Index, compiled by UK travel insurance comparison company Quotezone. Larnaca was ranked behind Antalya in Turkey and Tenerife in the Canary Islands, while Greece’s Crete and Malta completed the top five. The ranking comes as almost half of travellers appear increasingly willing to move their main holidays away from the peak summer months, amid concerns about extreme heat and rising holiday costs. The additional €50 million per year which the government’s planned pension reform will cost the taxpayer for the first five years after the reform’s implementation falls “within the framework of the state’s financial capabilities”, employers’ and industrialists’ federation (Oev) director-general Michalis Antoniou said on Thursday. “The first impressions are that this is a serious effort, within the framework of the country’s economic capabilities, at first glance,” he told the Cyprus News Agency, before adding that “a comprehensive approach is being taken, but we need to look carefully at the details”. Asked about the discussion held on Wednesday when the government first presented its plans to employers’ organisations and trade unions, he said that it was “the first time it was so productive since this effort began, since the issues were now concrete, with numbers, scenarios and understandable examples”. On the matter of the €50m per year expense for the taxpayer, he said that it will be examined “with the help of our advisors”. Cyprus must look beyond the immediate public cost of the Great Sea Interconnector (GSI) and consider whether the project can transform the country from an electrically isolated island into an energy hub for the Eastern Mediterranean, according to energy systems expert and former Cyprus Energy Regulatory Authority (CERA) chairman Andreas Poullikkas. Poullikkas, a professor of energy systems at Frederick University, pointed out that the debate over the Cyprus-Greece GSI project had focused heavily on its financial cost, particularly the contribution required from the Republic. While scrutiny of such a major investment was justified, he argued that cost alone could not determine its strategic value. “The real question Cyprus should be asking is much bigger. What kind of energy infrastructure do we want to hand over to the next generations of Cyprus?” Poullikkas said. He argued that Cyprus needed to decide whether it wanted to remain electrically isolated or use its geographical position as a strategic advantage and develop into an energy hub in the Eastern Mediterranean. Cyprus recorded a sharp slowdown in annual fuel price growth in July 2026, with prices for fuels and lubricants for personal transport rising 9.9 per cent year-on-year, according to Eurostat data. The increase was significantly lower than the 18.6 per cent annual rise recorded in June and the 20.5 per cent increase registered in May. Despite the slowdown, fuel prices in Cyprus remained higher than a year earlier, although the island recorded one of the more moderate annual increases in the European Union. Across the EU, the price of fuels and lubricants for personal transport rose by 16.9 per cent in July compared with July 2025, following annual increases of 20.7 per cent in May and 13.7 per cent in June. Fuel prices were higher year-on-year in 25 of the EU’s 27 member states in July. In 13 countries, the annual increase recorded in July was larger than the increase seen in June. Cyprus residents are expected to make a record 2.1 million trips abroad this year, up from 1.96 million in 2025, according to the Association of Cyprus Travel & Tourism Agents (ACTTA), with Greece remaining the dominant destination. ACTTA president Charis Papacharalambous told the Cyprus News Agency (CNA) on Friday that overseas travel by Cyprus residents was increasing by around 7 per cent, putting the total on course to exceed two million for the first time. “I believe we will have a new record. If we had 1.96 million trips last year, this year we will reach 2.1 million,” Papacharalambous said. The projected total would amount to around 2.2 trips per permanent resident each year, he added. Papacharalambous said the most important development was that residents continued to travel, with overseas trips increasingly viewed as a necessity rather than a luxury. “The resident of Cyprus continues to travel,” he said, attributing part of the increase to improved air connectivity, which has expanded the range and frequency of available destinations. Cyprus, Greece, Malta and Italy will meet in Limassol on September 9 for an expanded maritime cooperation meeting, with Italy taking part for the first time, Deputy Minister of Shipping Marina Hadjimanolis said on Friday. The meeting will mark the expansion of the Cyprus-Greece-Malta cooperation framework and the first time Italy has joined the grouping. The inclusion of Italy is the result of targeted and sustained efforts to strengthen regional cooperation and the strategic alliances of the Republic of Cyprus in the maritime sector, Hadjimanolis told the Cyprus News Agency (CNA). “This expansion is the result of our targeted and persistent efforts to strengthen regional cooperation and the strategic alliances of the Republic of Cyprus in the maritime sector,” Hadjimanolis said. She added that Italy’s participation would give the framework greater momentum while demonstrating a shared desire for closer coordination and meaningful dialogue on the challenges and opportunities shaping the future of shipping. “Italy’s presence strengthens the dynamic of the framework and confirms our common will for closer coordination and meaningful dialogue around the challenges and opportunities shaping the future of shipping,” she said.