Cyprus Business Now: weekly wrap-up
Here are the top business stories in Cyprus from the week starting December 22:
The increase was approved by the council of ministers on Tuesday, following a proposal by the ministry of labour and social insurance.
Labour Minister Marinos Mousiouttas said the decision was based on macroeconomic and social data, including inflation, economic growth and employment trends.
He said the adjustment aimed to strengthen the purchasing power of low-paid workers without harming competitiveness.
The choice of Lefkara, a village with international recognition for its cultural heritage, was intended to anchor Cyprus’ European role in a narrative of continuity and outward orientation, while at the same time underlining the island’s strategic position in the eastern Mediterranean.
Against that backdrop, officials described the event as the first public marker of a presidency prepared over months at administrative and political level.
Speaking at the ceremony, President Nikos Christodoulides described the moment as “a milestone day in our European journey”, explaining that Cyprus was not merely assuming an institutional role, but “primarily responsibility. Responsibility towards Europe, towards our fellow citizens, towards the future.”
Speaking after the conclusion of the meeting of the Council of Ministers at the Presidential Palace, he said that the Government, after assessing the overall macroeconomic and social data, decided to issue the amending decree on the Minimum Wage Limit of 2025, in accordance with the proposal of the Ministry of Labor and Social Insurance, which provides that the monthly minimum wage for full-time employment, after completing six months of continuous employment, increases from 1,000 to 1,088 euro.
The proposal for the adjustment of the National Minimum Wage took into account the level of inflation for 2024 (1.8%) as well as the forecast for 2025 (0.2%), which cumulatively amounts to 2%, the economy’s growth rate for the same two years, which is expected to be 3.9% and 3.4% respectively, significantly higher than the Eurozone average, the drop of unemployment to 4.9% in 2024, with a forecast of 4.3% for 2025, which is considered a full employment level.
The association said its research was conducted between December 10 and December 19, based on three separate retail price surveys carried out exclusively in supermarkets in Nicosia. The survey covered a total of 34 food and beverage items.
The research aimed to calculate the cost for both four- and six-member households across three categories, a “rich” basket including all 34 products, an “economic” basket covering 19 items and a reduced basket for the weakest income groups based on just 11 products.
According to the results, the total cost of the “rich” basket for a four-member household in Nicosia is estimated at €160.12, rising to €226.97 for a six-member family.
Compared with 2024, the association said there was no differentiation, with the overall cost remaining at approximately the same levels.
The agreement provides for salary increases, additional annual leave and improved loan terms for bank employees.
According to a statement by Etyk, the understanding was reached with the Bank Employers’ Association following months of negotiations, which intensified in recent months.
Etyk said the talks gained momentum after the re-establishment of the Bank Employers’ Association, which, after almost a decade, assumed responsibility for negotiating the renewal of the collective agreement with the union.
“After months of tough negotiations, the two sides managed to reach an agreement in principle for the renewal of the collective agreement, which generally seems to satisfy both sides,” Etyk said.
The agreement covers the period 2023–2027 and includes both one-off and general pay increases for all staff.
According to the findings, 64.6 per cent of the population belonged to the middle income class last year, while 27.8 per cent were classified in the lower income class and 7.6 per cent in the upper income class.
The classification follows the methodology recommended by the Organisation for Economic Co-operation and Development (OECD) and is based on equivalised disposable household income, which adjusts total household income for household size and composition.
Under this framework, the middle income class includes individuals living in households with income between 75 per cent and 200 per cent of the national median, while income below 75 per cent places households in the lower income class and income above 200 per cent in the upper income class.
In its statement, the council said the very small size of most Cypriot firms remains a key constraint on growth, noting that around 90 per cent of businesses employ fewer than 10 people.
That fragmentation, it argued, limits productivity, access to finance, innovation capacity and the ability of companies to compete internationally.
Larger firms, it said, typically benefit from economies of scale, stronger bargaining power with suppliers and customers, easier and cheaper access to funding, greater scope for research and development and improved resilience through diversification.
Scale also allows businesses to expand abroad, whether through exports, foreign subsidiaries or strategic cross-border mergers.
Peo said the goal of creating a more socially just tax system has not been achieved by the legislation passed.
The union said it will continue to push for a fairer distribution of tax burdens and for a redistribution of state resources in favour of workers, pensioners and vulnerable groups.
These measures include the need to reduce VAT on basic goods, electricity and fuel, introduce major changes to social policy, and move towards taxing wealth and excess profits.
Peo said it had submitted detailed positions to the centre for economic research at the University of Cyprus, the finance minister and the House of Representatives.
The aim of the bill is to modernise its structure and align it with current economic and institutional realities.
The meeting lasted more than an hour and a half and focused primarily on the proposed legislation prepared by the central bank.
“I would like to thank the governor of the central bank,” the finance minister said after the meeting, adding that they had been given the opportunity to be briefed on the new bill concerning changes to the governance of the CBC, which is being prepared by the institution itself.
Governor Patsalides described the meeting as “very useful” and said discussions had begun with the proposed bill for the central bank.
The chamber said the agenda presents “a coherent and realistic framework to bolster the European economy and enhance the bloc’s strategic standing“.
In its statement, Keve welcomed the focus on strengthening the competitiveness of the European economy.
It said that the emphasis on deepening the single market, supporting businesses (especially small and medium-sized enterprises), attracting investment and reducing administrative and regulatory burdens “resonates with the needs of both the European and Cypriot business communities”.
According to the chamber, these priorities “directly reflect the needs of entrepreneurs and firms across the EU who increasingly call for a business environment where growth is underpinned by reduced bureaucracy and improved conditions for investment and innovation”.
The chamber said the overhaul “marks a historic step” in modernising the country’s tax system and strengthening competitiveness at a time when the economy is seeking sustainable growth and investment.
In its statement, Keve said the adoption of the reform laws represents “a milestone modernisation that aligns the tax framework with the realities of the contemporary economy and lays the foundations for a competitive and sustainable economic model“.
According to Keve, the reform “offers a historic opportunity to upgrade Cyprus’ competitiveness by reinforcing stability, transparency and the island’s international appeal as a business and investment destination”.
The chamber also welcomed the fact that long-standing proposals from the private sector were incorporated into the final framework, shaping what it described as a more functional and development-oriented tax system.
The central bank said gross domestic product (GDP) growth in Cyprus is forecast to reach 3.5 per cent in 2025, compared with a revised growth rate of 3.9 per cent in 2024.
The forecast further anticipates that during the period 2026 to 2028, GDP growth will average 3 per cent per year.
The projections were published as part of the central bank’s December 2025 forecasts for the main macroeconomic aggregates of Cyprus, covering GDP, unemployment, inflation and inflation excluding energy and food.
The publication also includes an analysis of potential deviations from the baseline scenario for both GDP growth and inflation.
The decision followed the annual review of credit institutions falling under the O-SII definition, which assesses systemic importance and determines the level of the O-SII capital buffer they must maintain due to their role in the economy.
The institutions identified as O-SIIs are the Bank of Cyprus, Eurobank Limited formerly known as Hellenic Bank Public Company Ltd, and Alpha Bank Cyprus Ltd, according to the Central Bank of Cyprus.
The central bank explained that the strengthening of the systemic importance of these institutions, either through organic growth or through mergers and acquisitions, led to an increase in the required O-SII capital buffers for each of the designated banks.
The decision applies to UCITS and alternative investment funds that hold assets in transferable securities listed on regulated markets and whose net asset value is calculated on a daily basis.
CySEC said it reached the decision after assessing the relevant legal framework and prevailing market circumstances.
“The Securities and Exchange Commission, in exceptional cases and in the unit-holders’ interest, by virtue of a decision and at its initiative, may suspend the redemption of UCITS units,” as provided under article 20(1) of the Open-Ended Undertakings for Collective Investment Law, CySEC said.
He also warned that any decision should be taken with extreme caution to avoid collateral effects from a hasty move.
Persianis said that “extremely careful judgment and prior analysis” were required, stressing that decisions taken without sufficient preparation could have negative repercussions across the economy.
In that context, he said several economic parameters should be taken into account.
First, he noted that average and median salaries calculated on the basis of gross domestic product differ significantly from estimates based on gross national product.
“The latter more correctly reflects the per capita income in Cyprus and is more relevant to reality,” he said, adding that analysis based on GDP is misleading because the data are “contaminated, and driven, by a small number of sectors of the economy”.
In a statement, Oev thanked the legislature and, in particular, the House finance committee, noting that the bills “were processed at speed without compromising the quality of the final outcome, even as parliament was simultaneously handling the state budget”.
At the same time, it expressed appreciation to the government and the Finance Ministry, citing their openness to well-documented proposals from the business community and the structured approach followed in shaping and finalising the tax framework.
Oev also singled out the Tax Department and its commissioner, saying their engagement with the federation’s leadership and technical staff “allowed for detailed discussion and refinement of provisions aimed at strengthening competitiveness, safeguarding transparency and improving tax compliance”.
The seafront route, according to a report in Philenews, has begun appearing in promotional material and holiday packages marketed by major European tour operators.
While construction continues, the timetable points to full delivery in 2026, building on the first section that was opened in 2024 by President Nikos Christodoulides.
In the meantime, the walkway has quickly taken on a life of its own. Over the past year it has become a regular destination for residents and visitors, used daily for walking, exercise and casual leisure against the backdrop of the coastline.
Local authorities see this early uptake as a strong signal for Peyia and the wider Paphos district, particularly as the area seeks to broaden its tourism mix towards nature-focused, sports and sightseeing activities.
The document focuses on the practical application of Law 101(I)/2025, specifically addressing the fee structures and charges that will be applied to Cypriot Companies for the Administration of Undertakings for Collective Investments (CCAUCIs).
In addition to financial obligations, the consultation seeks to refine the elaboration and reporting requirements for certain material changes that may occur under the updated legislative framework.
The regulatory body also used the paper to outline its own discretionary powers in its capacity as the Competent Authority, covering the licensing, supervision, and ongoing oversight of these specialised administration firms.
Detailed within the text is the proposed regulatory approach and the specific actions CySEC intends to take to ensure the sector operates with transparency and stability in Cyprus.
The election, held to choose the council’s president and board members for the next three-year term, recorded a turnout of 83 per cent of registered voters, with the process reported to have proceeded smoothly.
Kineyirou won 71 per cent of the vote, defeating his challenger who received 29 per cent, confirming his continuation at the helm of the regulatory body.
Alongside the presidential race, Marina Constantinidou, Iacovos Iacovides and Herodotos Herodotou were elected to the three available positions as elected members of the council’s board.
“I would like to express my warm thanks to all licensed real estate agents for the trust they have once again shown in me,” Kineyirou said following the announcement of the results.
The reform, which will come into force on January 1, 2026, was described by Selk as “a significant institutional milestone for the tax system of the Republic of Cyprus, following a period of more than 23 years without an overall and structural review”.
The institute said the new framework “reflects the need to modernise the tax system so that it can respond more effectively to contemporary economic conditions, international developments and the increased demands for transparency, simplicity and tax justice”.
“The adoption of the tax reform constitutes a substantive institutional development that creates the conditions for a more modern, coherent and functional tax system,” Selk president Odysseas Christodoulou said in a statement.
“Its effectiveness, however, will depend to a large extent on the rational, consistent and timely implementation of the new provisions in practice,” he added.
Following an announcement made on October 17, 2024, and the subsequent Circular No. 674, the regulator clarified that firms currently registered under the existing national framework are permitted to continue their activities until their application is either approved or rejected.
The provision of these services is strictly limited to the duration of the transitional period, which is set to expire on July 1, 2026, or until a decision on the application is reached, whichever occurs first.
“CASPs that do not apply for authorisation by the above deadline are required to submit a wind-down plan, as the provision of crypto-asset services will no longer be permitted after the end of the transitional period,” the regulator stated.
In a statement, the association said it acknowledged “the importance of the dialogue that preceded the legislative process and the opportunity provided to social and productive stakeholders to submit their positions and recommendations”.
Representing the fastest-growing sector of the Cypriot economy, with a contribution of around €8 billion to gross domestic product, TechIsland said it had actively participated in the process, submitting well-documented views with the objective of maintaining and strengthening the country’s international competitiveness.
With the legislative process now complete, the association said the focus should shift to implementation, in particular the clarity and practical functionality of the new provisions, as well as their real impact on business operations and, by extension, on the economy.
According to an announcement, members were fully briefed on the content of the agreement and were given the opportunity to request clarifications, resolve questions and express their views on what was described as a particularly important issue.
During the general assemblies, members of Etyk voted by secret ballot on the proposal submitted by the organisation’s board of directors for the approval of the renewal of the collective agreement as presented. The result was an approval rate of 97.61 per cent.
In this context, the announcement notes that the outcome of the vote “once again confirms that colleagues and members of Etyk are distinguished by responsibility, prudence, maturity, proper planning and sound strategy”.