Parliament Approves Cyprus Business Development Agency
Cyprus’ House of Representatives unanimously approved legislation on Tuesday establishing the Cyprus Business Development Agency (KOAE), following the adoption of several amendments proposed by lawmakers.
The agency is intended to improve access to finance for small and medium-sized enterprises, startups and self-employed professionals, helping address longstanding funding gaps in the market.
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Approval of the legislation also enables the government to unlock between €50 million and €69 million from the Recovery and Resilience Fund.
What Changes
One of the key amendments, jointly proposed by DISY, DIKO and the ALMA movement, requires the criteria governing the agency’s maximum financing exposure, including lending to connected enterprises, to be set through regulations approved by Parliament.
The amendment strengthens parliamentary oversight while providing a clearer governance framework for the agency.
Parliament Backs Bill After Debate
Although the bill received unanimous support, several MPs criticised the government for submitting it only on June 25, leaving Parliament with limited time to examine the legislation.
DISY MP Savia Orphanidou said lawmakers had completed their review in the national interest, stressing that easier access to finance is essential for the sustainability of businesses. She also welcomed safeguards added during parliamentary scrutiny, including the planned €60 million capital allocation through 2030.
AKEL MP Andreas Pasiourtidis said the agency should prioritise very small businesses and welcomed provisions strengthening board governance, annual reporting to Parliament and disclosure requirements relating to politically exposed persons.
DIKO MP and House Finance Committee Chair Christiana Erotokritou said similar institutions have operated successfully in other countries for years, adding that the legislation now includes modern safeguards to ensure responsible use of public funds.
Meanwhile, Giannis Laouris of Direct Democracy noted that Cyprus is the only EU member state without a dedicated institution supporting small businesses. He warned that failure to pass the bill would have put between €50 million and €69 million in Recovery and Resilience funding at risk, while maintaining reservations about establishing KOAE as a semi-state organisation.
Why It Matters
The new agency is expected to expand financing options for businesses that often struggle to secure bank financing due to limited collateral or short credit histories.
If implemented effectively, KOAE could strengthen Cyprus’ SME ecosystem, improve access to capital for startups and self-employed professionals, and help convert Recovery and Resilience funding into long-term economic growth.
