Opens in a new tab

Breaking news

Central Bank Of Cyprus Lowers Growth Forecasts Amid Middle East Conflict

The Central Bank of Cyprus (CBC) has lowered its GDP growth forecasts for 2026 and 2027 as the conflict in the Middle East continues. Growth is now expected to reach 2.5% in 2026, down 0.2 percentage points from previous projections, while the estimate for 2027 stands at 2.9%. Inflation risks, meanwhile, are expected to remain elevated.

Rising Inflationary Concerns

Updated projections also point to higher inflation. Headline inflation is now forecast at 3.2% in 2026, 0.5 percentage points above earlier estimates. According to the CBC, the increase mainly reflects the impact of the conflict in the Middle East. Core inflation, which excludes energy and food prices, remains unchanged at 2.3%.

Sectors Under Strain And Market Dynamics

Sectors linked to international investment, including tourism, shipping, construction, and real estate, could come under pressure from higher oil prices and growing geopolitical uncertainty, the bank said. Further risks stem from possible fuel shortages and supply chain disruptions, which could add to price pressures affecting energy, industrial goods, and food.

Risk Factors And Outlook

Under its baseline scenario, the CBC assumes the conflict will continue until the final quarter of 2026 before gradually easing. Risks to growth remain tilted to the downside, while inflation risks continue to point upward. Much will depend on both the duration and intensity of the hostilities.

Among the factors highlighted by the bank are fuel shortages, higher energy and import costs, and pressures linked to climate change. A possible agreement between the United States and Iran would represent a positive development. Uncertainty persists, however, as the deal has yet to be finalized.

Domestic Demand And Resilient Labor Market

Despite the external challenges, rising disposable incomes and private consumption are expected to support domestic demand. Additional support is projected to come from non-residential private investment, although short-term geopolitical developments could affect the timing of some projects. Labour market conditions are expected to remain relatively stable, with only a slight increase in unemployment forecast.

Cyprus Company Registration: Two To Four Days, Unless Security Checks Intervene

Cyprus aims to register companies within two to four working days when applicants submit complete documentation. However, regulatory approvals, sanctions checks, foreign ownership and national security considerations can extend the process or prevent registration.

Energy, Commerce and Industry Minister Michael Damianou outlined the timeframe in a written response to MP Efrem Christou, who asked about company formation procedures and the checks required before approval.

Fast Registration Depends On Complete Documentation

Damianou said authorities seek to process complete applications within two to four working days, regardless of a company’s structural complexity. The timeframe also depends on whether applicants pay an additional fee for expedited processing.

According to the official incorporation requirements, the standard registration fee is €165, rising to €235 for companies without share capital. Expedited processing costs an additional €100.

Applicants must submit an approved company name, a memorandum and articles of association, and forms HE1, HE2 and HE3. Public companies must also provide form HE5.

Regulated Businesses Require Additional Approval

Companies operating in certain sectors must obtain prior clearance from the relevant authorities or professional bodies. These include medical and dental businesses, law firms, insurance and reinsurance companies, and firms supervised by the Cyprus Securities and Exchange Commission.

The Central Bank of Cyprus must also approve company names associated with payment institutions, electronic money and foreign exchange services. Additional restrictions apply to educational institutions using terms such as “university” or “college”, casino operators, broadcasters and wine producers.

Non-profit organisations seeking to register without “Limited” or “Ltd” in their names also require ministerial authorisation.

Sanctions And Foreign Ownership Trigger Extra Checks

Applications involving shareholders, directors or company secretaries subject to EU, UN or US sanctions receive additional scrutiny. Registration can proceed only if the competent sanctions authority does not prohibit it. Damianou noted that US sanctions are considered indirectly but have not been incorporated into Cyprus legislation in the same way as EU and UN restrictions.

Applications involving Turkish interests are also subject to additional review. Under procedures introduced around 20 years ago, the registrar must consult national security services before proceeding with registrations involving Turkish interests or businesses that could threaten the Republic’s security.

Damianou distinguished these cases from applications submitted by Turkish Cypriots, saying there is “no substantial difference” in how their registration documents are examined. Applications may nevertheless be refused if classified information raises concerns about national interests or national security.

Public Servants Face Separate Restrictions

Under Article 65 of the public service law, government employees cannot act as directors, company secretaries or shareholders in private or public companies without prior special permission from the finance minister.

Proposed Law Would Expand Registrar’s Powers

The government is also seeking to strengthen the Registrar of Companies’ authority to address potential security risks. An amendment to the companies law, submitted to Parliament on September 17, would allow the registrar to reject applications, refuse company filings or remove existing businesses from the register on grounds including national security, public order, public interest and the protection of state sovereignty.

The proposal, approved by the Council of Ministers on August 6, remains before the House commerce committee. It would allow authorities to withhold detailed justifications where disclosure could reveal sensitive information, while informing affected companies of the general grounds for decisions.

The bill follows parliamentary discussions about companies controlled by non-EU nationals, particularly those with Turkish ultimate beneficial owners, and possible implications for property ownership through foreign-controlled businesses. Further details are available in the proposed amendment and earlier parliamentary reporting.

Balancing Investment And Oversight

Cyprus is seeking to maintain an efficient company registration process while strengthening checks on ownership, sanctions compliance and potential security risks.

The two-to-four-day target supports the country’s appeal to entrepreneurs and international investors, but the actual timeline depends on the nature of the business, the documentation submitted and any additional regulatory or security reviews required.

Uol
Aretilaw firm
eCredo
The Future Forbes Realty Global Properties

Become a Speaker

Become a Speaker

Become a Partner

Subscribe for our weekly newsletter