Here are the top business stories in Cyprus from the week starting January 20:
Limassol has the highest rental prices in Cyprus, averaging €4,492 for houses, while Famagusta has the lowest, with apartments averaging €745, according to a report released on Monday from Landbank Analytics.
Moreover, capital markets are expected to continue being influenced by the demands of the digital transition, the rise of artificial intelligence, and new regulatory requirements, according to CySEC chairman George Theocharides.
“The increasing institutional and regulatory demands, the digital transition, the European Central Bank’s monetary policy, and sustainable investments will continue to be key factors shaping the capital markets, the investment sector, and investment funds in 2025 in Cyprus and the broader European region,” Theocharides said on Monday.
He added that “international economic conditions and geopolitical risks will present significant challenges to the markets”.
On another note, the Cyprus Chamber of Commerce and Industry (Keve) announced the launch of the EcoSMEnergy project on Tuesday.
This initiative, co-funded by the European Union under the LIFE Programme, aims to support small and medium-sized enterprises (SMEs) in Europe address challenges related to high energy consumption.
“These businesses are grappling with improving energy efficiency, a lack of awareness, insufficient incentives, and limited access to financing solutions,” the chamber said in its statement.
“At the same time, they must navigate complex information systems and fragmented support structures, hindering the adoption of sustainable practices,” it added.
Turning to the financial sector, the Central Bank of Cyprus (CBC) has taken significant steps in the past two years to strengthen the financial resilience of the nation’s banking system.
These measures, detailed in its 2023 macroprudential policy report to parliament, aim to mitigate systemic risks and ensure stability in the financial sector. In 2024, the CBC introduced updated capital requirements for Cypriot banks identified as Other Systemically Important Institutions (O-SIIs).
The adjustments are part of a broader strategy to safeguard the financial system against potential vulnerabilities. Five major banks—Bank of Cyprus, Hellenic Bank, Eurobank, Astrobank, and Alpha Bank—have been designated as O-SIIs and are required to maintain specific capital reserves over the next three years.
As the real estate sector continues to evolve, Cyprus Property Developers Association director general Mersina Isidorou has called for reforms to jointly-owned buildings laws, as the House reviews new legislation to tackle regulatory gaps.
She pointed out that the 2023 law on the management of common buildings and related matters, which is currently under review by the House committee on internal affairs, is aimed at rectifying longstanding regulatory gaps.
“The term ‘communal living’ has, unfortunately, become synonymous with a range of challenges for property owners, tenants, and the real estate industry at large,” Isidorou said.
She stressed that the rapid growth in shared ownership properties necessitates a robust legal framework to meet the evolving demands of this sector. In an effort to refine the legislation, Isidorou mentioned that the association recently convened a roundtable.
The scenarios, which include baseline and adverse projections, aim to evaluate the financial sector’s ability to withstand negative economic and financial shocks while identifying systemic risks. Under the baseline scenario, Cyprus’ economy is projected to grow by 3 per cent in 2025, 3.1 per cent in 2026, and 3 per cent in 2027.
Conversely, the adverse scenario foresees a contraction of 2.5 per cent in 2025, followed by a steeper decline of 4.7 per cent in 2026, before a modest recovery of 0.7 per cent in 2027. Growth for 2024 is estimated at 3.7 per cent, based on historical data.
On the banking front, the Bank of Cyprus has made significant progress in implementing measures designed to alleviate financial pressures on its customers, particularly through reduced charges and lower interest rates.
According to the bank, nearly all the commitments announced have been fulfilled, with additional initiatives underway.
Among the measures is a one per cent interest rate subsidy for housing loans under the government’s housing subsidy scheme for young couples and young people up to the age of 41.
Meanwhile, Eurobank Holdings has successfully completed the issuance of Tier 2 subordinated bonds worth €400 million, attracting robust demand that reached €2 billion, according to an announcement released on Wednesday.
Alongside the bond issue, the bank has announced an exchange offer for Hellenic Bank’s Tier 2 bonds, valued at €200 million with a 10.25 per cent coupon, as part of its strategy to optimise its capital base.
Regarding the €400 million bond issue, Eurobank stated that investor confidence in its creditworthiness led to demand that exceeded the offer by five times.
This allowed the bank to secure €400 million at a reduced credit spread of 200 basis points, down from an initial indication of 225 basis points.
In the maritime sector, Shipping Deputy Minister Marina Hadjimanolis, and Gender Equality Commissioner Josie Christodoulou hosted a press conference on Wednesday at the Presidential Palace to launch the ‘Women in Shipping’ campaign.
This initiative, a collaboration between the commissioner and the Deputy Shipping Ministry, seeks to raise awareness and highlight the growing role of women in the maritime sector.
Hadjimanolis began by offering her warm congratulations to the commissioner and her team for their innovative work, which she noted is “perfectly aligned with the priorities of President Nikos Christodoulides.” “I would like to express my deepest gratitude to Despina Theodosiou Panayiotou, Elpi Petraki, Natalia Bury Loyal, Pavlina Panayiotou, and Veronica Agatha Pupou for their participation in the video,” she said, commending them as inspirational role models.
Following the meeting, Victoras Papadopoulos, director of the president’s press office, briefed the media, stating that the president had congratulated Kazakos on behalf of the government for his election to the prestigious role.
This makes Kazakos the first Cypriot to lead the global organisation, and Kazakos was selected unanimously by the ICS board of directors from a field of internationally recognised candidates.
In the finance sector, CFA Society Cyprus on Thursday announced the signing of a Memorandum of Understanding (MoU) with the Cyprus Stock Exchange (CSE).
According to the announcement, this partnership “marks a significant step towards enhancing the professional standards and development of the financial markets in Cyprus”.
“The MoU reflects the shared commitment of CFA Society Cyprus and the CSE to promote transparency, ethical practices, and advanced financial knowledge within the local market,” the announcement added. The society explained that the agreement “sets the stage for ongoing collaboration between the two institutions, with a focus on fostering a dynamic and resilient financial market”.
Despite a significant shift towards environmentally friendly cars in 2024, interest in Cyprus’ eco-friendly vehicle scheme appears to have stalled, according to data on applications submitted thus far.
The scheme, currently in its third phase, launched in February 2024 as part of its second iteration and is set to run until mid-2026. Recently, the road transport department extended the deadline for application submissions, reflecting the varied uptake across different vehicle categories.
The third phase of the scheme offers a total of 5,583 grants aimed at promoting vehicles with zero or low CO2 emissions and other sustainable transport options.
The primary goal of the scheme is to reduce the environmental impact of transportation by cutting CO2 emissions and air pollutants.
The allocated budget for this phase amounts to €36.5 million, out of a total budget of €53 million.
In the real estate sector, the Cypriot market remained stable in 2024, compared to the year before, reflecting the challenges faced by the sector, according to the Cyprus Real Estate Agents Registration Council.
In a statement released on Thursday, the council said that the sector was affected by a decline in people’s purchasing power, and high lending rates.
Additional factors that restrained the property market, the council added, include increased construction material costs, driven by geopolitical instability and conflicts in the wider region, as well as high property prices.
A proposed law aims to tackle the issue of unlicensed hotels and tourist accommodations in Cyprus by offering a temporary operating licence for up to six years.
This follows the failure of previous legislation to resolve the issue, leaving many businesses still operating without the necessary certification.
Kyriakos Hadjiyiannis, Disy MP and chairman of the Tourism Committee, has introduced the bill to create a special regime for establishments that have failed to meet licensing requirements.
Hellenic Bank on Friday issued a warning to its customers to remain vigilant against phishing scams, following a resurgence of fraudulent activities targeting its clients.
The bank said that fraudsters have been impersonating Hellenic Bank through emails and text messages, acting as if they are part of its customer service department.
In the latest financial statistics, the number of Management Companies and Undertakings of Collective Investments (UCIs) in Cyprus stood at 323 during the third quarter of 2024, according to the Cyprus Securities and Exchange Commission (CySEC).
In addition, the total value of assets under management recorded a slight decrease, dropping to €9.1 billion. Based on its quarterly statistics bulletin for the third quarter of 2024, CySEC supervises 323 Management Companies and Undertakings of Collective Investments (UCIs), as opposed to 335 during the same period of the previous year, recording a decrease of 3.58 per cent.
The government said Thursday that sometime over the next few weeks it will unveil a ‘strategic plan’ for attracting foreign investment to Cyprus, while also asking local businesspeople and industrialists for their feedback on how to render the economy more competitive.
Energy, Commerce and Industry Minister George Papanastasiou said the government will set up an umbrella organisation hosting the various agencies that process applications – on a fast-track basis –from foreign investors.
“We lag behind when it comes to issuing permits…we’ve got to address the bottlenecks,” Papanastasiou said at an event held at the finance ministry building and attended by industrialists and entrepreneurs.
According to the government’s definition, “the term foreign direct investment means the participation of more than 10 per cent in the share capital of an enterprise resident in one country, by an investor resident in another country (direct investor) and implies the existence of a long-term interest on the part of the foreign investor.”
Meanwhile, the ministry of transport has announced plans for a significant expansion of Vasiliko port. This project aims to establish a new industrial port under the management of the Cyprus ports authority (CPA).
On January 21, 2025, the CPA submitted a proposal for European Union co-funding through the “connecting Europe facility” (CEF) programme. This initiative supports projects related to the trans-European transport network infrastructure.
The proposed expansion includes the construction of nine new berths, totalling 2,355 metres in length, breakwaters, a deepened approach channel, and enhanced land use around the port. Upon completion, the port is expected to handle up to 1,772 ships annually. The total cost of the project is estimated at €350 million.
The development will proceed in phases. For phase A, with a budget of €85 million, Cyprus has requested €38.5 million in co-funding from the CEF.
According to a post on social media platform X, drilling began Friday morning in Block 5’s gas reservoir named Electra, carried out by American multinational corporation ExxonMobil and QatarEnergy.
“Cyprus is proceeding with research activities, aiming to become an alternative and reliable source of Natural Gas for the EU,” Christodoulides said.
Cyprus issued a Navtex on Sunday in relation to the start of drilling at the Electra field.
