Cyprus Business Now: weekly wrap-up

Here are the top business stories in Cyprus from the week starting August 31: Euro area consumers became slightly more optimistic about inflation and economic growth in July, although the latest European Central Bank (ECB) survey comes as Cyprus continues to face significantly stronger price pressures than the wider euro area. The ECB has reported that median consumer expectations for inflation over the next 12 months fell to 2.9 per cent in July from 3 per cent in June. Expectations for inflation over the following three years also eased, to 2.7 per cent from 2.8 per cent, while expectations five years ahead remained unchanged at 2.4 per cent. Consumers’ perception of inflation over the previous 12 months also edged down, from 3.6 per cent to 3.5 per cent. Cyprus should focus not on being the biggest in artificial intelligence, but on being “the most agile”, while placing citizens and trust at the centre of its ambitions, according to National AI Taskforce member Orfhlaith Ni Chorcora. Ni Chorcora is a senior IT executive with more than 30 years of international experience, including senior roles at Oracle and Equinix. Her work has focused on digital transformation, ecosystem development and building strategic partnerships across Europe, the Middle East and Africa. Commenting on the AI strategy, she said one of its ambitions is “to promote research and innovation using AI and to ensure Cyprus continues to hold its competitive position as an innovation hub in the Eastern Mediterranean”. Central to the success of that vision, she explained, is the belief that such innovation thrives where there is a diverse ecosystem of players, including researchers, funders, founders, technology providers, innovation hubs and exceptional talent, combined with friendly regulation, ease of doing business and a culture of trust. The Cyprus Treasury’s Power BI platform has attracted 537 unique users in the nearly five months since its launch, accountant-general Andreas Antoniades said. Speaking to the Cyprus News Agency (CNA), Antoniades said the platform formed part of the Treasury’s broader strategy to upgrade its digital services and strengthen transparency, accountability and efficiency in fiscal management. The Power BI tool provides citizens with reliable and regularly updated information on the implementation of the state budget. Users can access ready-made and customised reports, interactive dashboards and graphical presentations showing monthly budget execution by ministry, government department and revenue and expenditure category. The Corporate Cyprus Padel League will return for a second year with record participation and a new partnership with the Marcos Baghdatis Tennis Academy, according to an announcement from the organisers. It said that 40 teams and 140 players from companies and organisations in Nicosia and Limassol have registered for the 2026 competition, compared with 27 teams and 104 players in its inaugural year. Registrations have now closed, while a waiting list has been created following further interest from companies wishing to participate. According to the announcement, the league aims to bring Cyprus’ business community together through sport, combining competition and teamwork with entertainment and opportunities to build professional connections. The organisers also said that the Marcos Baghdatis Tennis Academy will host all Limassol matches at its facilities at City of Dreams Mediterranean. Four ERA department stores in Cyprus changed hands for a nominal €1 after Gencom Ltd agreed to take over their leases, staff and outstanding supplier orders worth about €4 million. While the commercial terms were announced by Ermes in May 2025, a detailed competition decision published in the Official Gazette on August 28 provides a fuller picture of what was transferred, who controls the buyer and the business plan behind the acquisition. The agreement was signed on May 8, 2025 and notified to the Commission for the Protection of Competition on June 20. It was unanimously approved on July 17, while completion of the transfer was announced on September 1, 2025. The transaction covered ERA Mall of Cyprus in Nicosia, ERA Apollon in Limassol, ERA Korivos in Paphos and ERA Zenon in Larnaca. Cyprus’ tourism revenue rose by 0.2 per cent in June 2026, despite tourist arrivals falling by 1.7 per cent, as higher spending per visitor offset the drop in visitor numbers. Specifically, tourism revenue reached €423.1 million, compared with €422.3 million in June 2025, according to figures released on Monday by the statistical service (Cystat). Tourist arrivals declined to 489,965, from 498,527 in the corresponding month of 2025. However, the slight monthly increase was not enough to reverse the weaker performance recorded during the first half of the year. For the January to June 2026 period, tourism revenue is estimated at €1.22 billion, compared with €1.37 billion during the same period of 2025, representing an 11.4 per cent decrease. Cyprus recorded a general government fiscal surplus of €770.6 million in the first seven months of 2026, equivalent to 2 per cent of GDP, according to preliminary figures released on Monday by the statistical service (Cystat). The surplus was €11m higher than the €759.6m recorded during the corresponding period of 2025, although its share of GDP declined slightly from 2.1 per cent. Total government revenue rose by 4.1 per cent to €8.91 billion between January and July 2026, compared with €8.56bn in the same period a year earlier. Cystat said the increase reflected an additional €354.1m in revenue over the first seven months of 2025. Revenue from taxes on income and wealth rose by 7.7 per cent, an increase of €157.5m, reaching €2.19bn compared with €2.03bn a year earlier. The Stelios Philanthropic Foundation announced up to €260,000 in direct financial support for the families of those killed in the ferry sinking off the northern coast of Cyprus. Eight people have been confirmed dead following the sinking on August 30, while another 18 remain missing. Sir Stelios Haji-Ioannou, creator and owner of the easy family of brands and founder and president of the Stelios Philanthropic Foundation, “offers his most sincere condolences to the families and loved ones” of those confirmed dead, according to an announcement issued on Monday. Moreover, the announcement said that Sir Stelios “sends his thoughts and prayers to the families and loved ones of the 18 people still reported as missing as a result of the sinking of the ferry”. IKEA Cyprus is joining a new wave of price cuts announced on Tuesday as the Swedish furniture retailer seeks to revive demand amid rising housing costs and squeezed household budgets. According to a report from Reuters, the price reductions are part of a €1.2 billion investment by IKEA retailers across Europe, aimed at attracting cash-strapped consumers following two consecutive years of falling revenue. “The cost of living is increasing and it’s getting tougher and tougher for many people,” said Juvencio Maeztu, CEO of Ingka, IKEA’s biggest retailer. “For many people, home is a bedroom in a shared house, and it’s even more important to offer storage and organised solutions,” he added. In Cyprus, the IKEA franchisee Housemarket is among the operators that have agreed to implement price cuts. Cyprus is preparing a new interbank payment service that would allow customers to send money using only the recipient’s mobile phone number, with its introduction currently being considered for the first quarter of 2027. Plans are expected to enter a more detailed stage in early September, when JCC Payments holds its first substantive meeting with members of the Association of Cyprus Banks (ACB). The meeting will examine the technical and procedural requirements for a Cypriot service modelled on Greece’s IRIS system. The project is expected to be developed by JCC in cooperation with Greek interbank payments operator DIAS. In practical terms, customers of participating banks would no longer have to enter or exchange an IBAN when making an eligible transfer. Instead, they would select or type the recipient’s mobile number through their banking application. Cyprus could gain firmer legal ground to restrict Airbnb-style rentals in areas where housing pressure can be proved under a European Commission proposal due later this year, but the island would first have to establish where the pressure exists and how much short lets contribute to it. The Affordable Housing Act is still being prepared, meaning no EU-wide rental cap, licensing quota or ban has been agreed. Instead, the Commission says publicly available data should be used to identify “areas of housing stress”, where national, regional or local authorities could apply proportionate measures to protect housing affordability, including measures affecting short-term rentals. This is not a blanket EU crackdown. The Commission also says restrictions must be accompanied by policies to increase supply, including new construction, the return of vacant properties to use, additional social housing and simpler planning and permitting. Cyprus enters a decisive four-day round of global shipping talks in London on Tuesday, as member states seek agreement on rules that will determine how quickly ships must cut emissions, what non-compliance will cost and whether billions of dollars will pass through a new Net-Zero Fund. The negotiations place Cyprus, one of Europe’s leading maritime states, back at the centre of a dispute that divided the European Union last year. Cyprus and Greece abstained when the International Maritime Organisation’s (IMO) extraordinary environmental session voted in October 2025 to postpone formal adoption of the Net-Zero Framework for one year. The measure had been approved in April but was not adopted, leaving its future open to further negotiation. The Shipping Deputy Ministry subsequently explained that Cyprus had sought to create room for a broader agreement, supporting an IMO framework that was both ambitious and workable. A narrowly backed measure, it argued, could prove difficult to implement and encourage more regional rules. Cyprus’ National AI Strategy has examined how artificial intelligence could improve everyday life and make education, employment and public services more accessible to people with visual and hearing disabilities, according to an announcement from the Office of the Chief Scientist for Research, Innovation and Technology. According to the announcement, the discussions took place during meetings with Pelagia Karpasiti, director of the Ayios Varnavas School for the Blind, and Kika Hadjikakou, director of the Georgios Markoudeaf school, as part of the consultation on the National AI Strategy 2032. Together with staff from the two schools, the group considered the everyday difficulties faced by people with visual and hearing disabilities and identified areas in which AI could offer practical support. At the centre of the discussions was the need for accessibility to be built into digital services and applications from the outset, rather than added later. The announcement said this would require the active involvement of people with disabilities and their representative organisations throughout the design process. Cyprus’ success in replacing lost Russian visitors by opening up new tourism markets has won international recognition, Deputy Tourism Minister Kostas Koumis said. Speaking at the opening of an international development seminar in Nicosia this week, Koumis pointed to a joint report by Oxford Economics and global tourism platform TOURISE, which presents Cyprus as a leading example of tourism resilience and market diversification. The report, entitled ‘Resilience in a World That Doesn’t Reset’, examines 85 major tourism crises over the past 25 years and identifies diversification as one of the strongest safeguards against disruption. In the case of Cyprus, it documents how the island responded to the loss of the Russian market following Russia’s invasion of Ukraine, while emphasising the tourism sector’s performance in 2024 and 2025. Keo’s planned €25 million beverage factory in Kato Polemidia has cleared its environmental screening, bringing the Limassol project a step closer to construction. The environmental authority said it had no objection to the development, subject to a series of conditions, and decided that a full environmental assessment was not required. In its reasoned finding, dated August 27, the authority said the anticipated effects were not considered environmentally significant and could be managed through the proposed mitigation measures. The decision followed an assessment of the project’s information report, a site visit and consultation with the Limassol district local government organisation. However, the environmental finding does not amount to final planning approval. Construction is expected to begin once the remaining permits have been secured and is estimated to take around 24 months. Cyprus recorded the steepest decline in tourist accommodation overnight stays in the EU during the first half of 2026, with nights spent in hotels and other tourist accommodation falling by 7.7 per cent when compared with the same period last year, according to Eurostat data. The decline placed Cyprus at the bottom of the EU rankings, as overall tourism accommodation activity across the bloc increased during the first six months of the year. Eurostat reported that there were 1.321 billion overnight stays in tourist accommodation across the EU between January and June 2026, up 1.7 per cent from 1.299 billion in the first half of 2025. Cyprus was one of nine EU countries to record a decline in overnight stays over the period, with its 7.7 per cent drop the largest fall among member states. Romania recorded the second-largest decrease, with overnight stays falling by 6.7 per cent. Eurobank raised €600 million through a seven-year green senior preferred bond on Tuesday, with the issue 2.8 times oversubscribed as investors responded strongly to the bank’s latest debt offering. The bond, which can be called by Eurobank after six years, was priced at a spread of 98 basis points over the mid-swap rate. Initial guidance had placed the pricing at around 125 basis points above mid-swap, implying a yield of approximately 4.54 per cent. The strong demand allowed the bank to tighten the spread substantially before completing the €600 million issue. Cyprus had one of the lowest shares of internet users paying for film, series or sports streaming services in the EU in 2025, according to Eurostat data. Some 26.97 per cent of internet users in Cyprus had paid for such a subscription during the reference period, well below the EU average of 32.68 per cent. The figure placed Cyprus 20th among the 27 EU member states, with only Estonia, Portugal, Croatia, Romania, Hungary, Italy, Lithuania, Latvia, Slovenia and Bulgaria recording lower rates. Ireland had by far the highest share, at 63.94 per cent, followed by Denmark at 61.11 per cent and the Netherlands at 59.23 per cent. More planning and building permit applications were cleared than filed in Larnaca in July, allowing the district authority to work through older cases while keeping pace with new demand. The Larnaca district local government organisation (EOA) said its results were the best in Cyprus for Category I planning and building permits during the month. It completed 267 Category I planning permits, compared with 256 new applications, giving it a processing rate of 104 per cent. The gap was wider for Category I building permits, with 420 cases completed against 339 received. This produced a processing rate of 124 per cent. Larnaca also stayed ahead of incoming applications in Category II planning permits, completing 142 cases while receiving 133, for a rate of 107 per cent. However, the picture was weaker for Category II building permits, where 114 cases were completed and 138 were submitted, leaving the rate at 83 per cent. Financial technology and stockbrokerage company Freedom24 is exploring the possibility of establishing a presence in Geneva as the European financial technology firm considers Switzerland a market of long-term strategic interest, the company said on Wednesday. The assessment will examine opportunities across wealth management, digital financial infrastructure, responsible artificial intelligence and data governance, areas where Switzerland’s established expertise overlaps with capabilities already developed by the company. Freedom24 is a division of Freedom Holding Corp and provides investment and financial technology services to European clients. Among the options being considered are business models that would combine the relationship-driven approach associated with Swiss wealth management with proprietary technology developed across the wider Freedom Group. Cyprus’ hotel sector is hoping to limit its losses for 2026 to around 10 per cent, after a difficult spring was followed by more encouraging bookings in July and August, the director-general of the Cyprus Hotel Association (Pasyxe) Christos Angelides said on Wednesday. “After the major difficulties experienced in March, April and May, with losses of around 30 per cent for the period and cancellations for the rest of the season, it appears that the efforts made by the private sector, the Deputy Ministry of Tourism and all the parties involved, such as ACTTA, Hermes and their members, have borne fruit,” Angelides told the Cyprus News Agency (CNA). “We recovered a significant amount of the lost ground in June,” he stated, adding that July and August had performed at satisfactory levels given the large number of cancellations that had preceded them. Angelides said the performance was particularly encouraging because 2025 had been a historic year for the hotel industry, with almost all hotels operating at full capacity. Limassol’s seafront will become an open-air gateway to the world of shipping on October 10, as the Thalassa festival returns with a full day of interactive activities aimed particularly at children and young people. The fifth “Thalassa 2026” festival, jointly organised by the Shipping Deputy Ministry and Limassol municipality, will take place from 9am until 7pm at the Limassol Multifunctional Seaside Park, along the Molos promenade. Held under the central message “Experience the sea – Get to know Shipping”, the festival is designed to bring the public closer to the sea and the maritime sector through creative, educational and hands-on experiences. According to the organisers, particular emphasis will be placed on giving children and young people an enjoyable introduction to the many different aspects of shipping, while encouraging a broader maritime and environmental culture among the public. Cyprus banks reported stable lending standards and stronger household demand for credit during the second quarter of 2026, while uncertainty surrounding the Middle East crisis weighed on some business investment plans, according to the Central Bank of Cyprus (CBC). Credit standards for loans to enterprises and for household borrowing, including housing loans and consumer credit, remained unchanged in 2026Q2 compared with the previous quarter. The survey found that all factors affecting credit standards across the different loan categories had a neutral impact during the quarter. Banks had previously expected some tightening of lending standards, but those expectations were not realised. Fast Track sounds reassuringly simple until a passenger pays for it and discovers that the queue it skips is not the queue holding them up. At Larnaca Airport, the useful question is not whether there is an express lane. There is. The question is which part of the journey it covers. A traveller may still have to check in a bag, clear security, pass border control and wait at the gate. Paying to move more quickly through one of those stages does nothing to the other three. The confusion is particularly easy in Cyprus because the island is in the European Union but not yet part of the border-free Schengen area. A flight from Larnaca to Athens, Paris or Frankfurt is therefore not treated like an internal Schengen journey. Passengers still cross an external Schengen border, even when they hold a Cypriot or another EU passport. That remains the position today, despite the government’s aim of joining Schengen this year. President Nikos Christodoulides set accession in 2026 as the target in January. However, a June Council briefing said Cyprus was completing its first Schengen evaluation, while the Commission’s current guidance continues to list the island outside the border-free area. Cyprus’ new-home market split sharply along district lines in the first half of 2026, with Nicosia recording the most sales, Limassol attracting the largest share of spending and Paphos posting the highest house prices. According to Landbank Analytics, 3,594 off-plan apartments and houses were sold for a combined €1.149 billion during the six-month period. The islandwide totals were first released in July, but the latest breakdown shows how sharply prices, property types and demand differed from one area to another. Nicosia and Limassol, for example, each recorded just over 1,000 sales. However, the 1,063 transactions in Nicosia were worth €232.9 million, little more than half the €435m generated by Limassol’s 1,050 sales. The same divide was apparent across the wider market. Nicosia and Larnaca accounted for 54.1 per cent of transactions but only 36.6 per cent of their value. By contrast, Limassol and Paphos attracted 60.3 per cent of the money invested with 43 per cent of sales. Cyprus brought its home-grown maritime technology to an international audience in Hamburg on Wednesday, with local companies presenting tools designed to make ships safer, cleaner and more efficient. The Cyprus Maritime Innovation Event was jointly organised by the Ministry of Energy and the Shipping Deputy Ministry as part of SMM Hamburg, which runs from September 1 to 4. Around 2,300 exhibitors from as many as 70 countries are taking part in this year’s exhibition, while about 50,000 participants from 120 nations are expected to attend. Opening the Cyprus event, trade and industry officer Andri Katomoniatou Iakovou and Cyprus’ deputy chief of mission in Germany George Stavrinou spoke about the longstanding commercial and maritime relationship between the two countries. Cyprus shoppers continued to give Jumbo a lift in August, with sales at its stores on the island rising by approximately 9 per cent year on year, following a 14 per cent increase in July. For the first eight months of 2026, Jumbo’s sales in Cyprus grew by around 6 per cent, remaining slightly ahead of the group-wide growth rate. Across the Jumbo group, sales increased by approximately 9 per cent in August, continuing the improvement recorded during the previous month. As a result, group sales for the January-to-August period rose by around 5.8 per cent year on year, placing the retailer slightly ahead of management’s full-year target of approximately 5 per cent. The Cyprus Chamber of Commerce and Industry (Keve) on Thursday called for stronger support for families, particularly larger families, after meeting with the Pancyprian Organisation of Large Families to discuss Cyprus’ worsening demographic outlook and its economic consequences. The meeting involved an extensive exchange of views on the demographic problem facing Cyprus, with the two sides examining the social and economic implications of falling births, an ageing population and a deteriorating balance between births and deaths. “The demographic issue is one of the biggest challenges that our country will have to address over the coming decades,” Keve said. The chamber said the continued decline in births, ageing of the population and deterioration in the birth balance were creating significant challenges for both the sustainability of the welfare state and the future growth of the economy. The Central Bank of Cyprus (CBC) on Thursday published a piece of analysis by economist Marios Louca arguing that deeper European integration was becoming increasingly important as geopolitical tensions reshaped global trade, investment and economic policy. The article, titled “More Europe in a Fragmented World: Geoeconomic Fragmentation, China’s Rise and Europe’s Strategic Response”, examined the changing global economic landscape and the implications for Europe’s competitiveness and resilience. “The global economy is entering a new phase in which geopolitical considerations increasingly shape economic relationships,” he said. Cyprus tourism continued to show resilience and momentum in the first half of 2026, despite disruption caused by developments in the Middle East and turbulence in air transport during March and April, government spokesman Konstantinos Letymbiotis said on Thursday. Speaking to media representatives at the Presidential Palace, Letymbiotis compared this year’s performance with 2024, which had been the best year in the history of Cypriot tourism at the time, before 2025 set a new record. Despite the exceptional circumstances affecting two critical months of 2026, tourist arrivals during the first half of the year remained slightly higher than in the corresponding period of 2024, while tourism revenue increased by 7.5 per cent. “From May onwards, the picture has been steadily improving and the gap from the 2025 record has been narrowing significantly,” Letymbiotis said. The Cyprus Securities and Exchange Commission (CySEC) has urged Cyprus investment firms to review proposed European rules that could require some of the largest firms to become credit institutions. CySEC issued the relevant circular shortly after the European Banking Authority (EBA) launched a consultation on August 25 covering draft regulatory technical standards (RTS) for the reclassification of investment firms as credit institutions. The consultation follows changes to the Capital Requirements Directive (CRD) framework and is intended to make the assessment of when an investment firm should obtain a banking licence more proportionate, transparent and risk-based. Under Article 8a of the CRD, investment firms with total assets exceeding €30 billion are generally required to obtain authorisation as credit institutions rather than continue operating solely under a MiFID investment firm authorisation. Cyprus has seen no evidence that large companies are leaving because of the global minimum tax, Finance Minister Makis Keravnos said this week, dismissing reports of an impending corporate exodus as unfounded. Speaking at the Finance Ministry, Keravnos addressed concerns surrounding Pillar Two, the global minimum tax framework developed through the Organisation for Economic Co-operation and Development (OECD) and the G20. He said claims that the rules were pushing major businesses away from Cyprus had come from “isolated voices which, if they do not serve personal interests, seem to arise from some obsessions”. Keravnos explained that the Finance Ministry is preparing an amending bill following a decision by the European Commission, describing this as a standard process arising from consultations with Brussels and Cyprus’ obligations under the OECD framework. However, he stressed that Pillar Two does not impose a 15 per cent tax on every company operating in Cyprus. Instead, it applies only to large multinational and domestic groups with annual revenue exceeding €750 million. Cyprus’ latest rise in inflation is being driven by imported energy costs rather than excessive domestic demand or looser fiscal policy, economist Tassos Yiasemides said, warning that the pressure is gradually spreading through the wider economy. Speaking to the Cyprus News Agenccy (CNA) after the Consumer Price Index reached 3.5 per cent in August, Yiasemides said the increase was concentrated almost entirely in energy, with petroleum product prices rising by 20.3 per cent year on year. He argued that the figures clearly showed industrial products remaining largely unchanged, while “petroleum products and electricity alone are driving the index higher”. The increase, therefore, was not the result of an overheating economy but an imported change in costs, which was now beginning to reach other areas. Geopolitical upheaval and uncertainty surrounding developments in the Middle East were keeping international energy prices high, Yiasemides explained, while trade tensions between the world’s largest economies were adding another layer of risk. Geely Auto will enter the Cyprus car market in 2026, after signing a strategic partnership with KKS Mobility Ltd, led by automotive executive Charalambos Pilakoutas, to become the Chinese manufacturer’s importer and distributor on the island. According to an announcement released on Friday, the agreement was signed in Amsterdam on September 3 by Aiden He, CEO of Geely Brand Europe and vice president of strategy and product at Geely Auto Europe, and Charalambos Pilakoutas, CEO of KKS Mobility. The partnership marks Geely’s planned entry into Cyprus and forms part of the company’s wider international expansion. “Entering Cyprus represents an important step in growing Geely’s footprint across Southern Europe,” said He. “Together with KKS Mobility Ltd we are proud to offer local customers safe, intelligent, and reliable everyday driving, combining our global engineering expertise with accessible, high-value electric and hybrid technology,” the CEO added.