Cyprus Faces A New Reckoning Over Airbnb-Style Rentals As Regulatory Pressure Mounts

Cyprus is preparing tighter rules for self-service accommodation after an Audit Office report exposed widespread licensing failures across the short-term rental sector, prompting renewed calls for stricter enforcement from the hotel industry.

The report examined licensing practices across self-service accommodation and the wider tourism sector, highlighting compliance gaps and raising fresh questions over the effectiveness of the current regulatory framework.

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Licensing Under Scrutiny

The findings gained additional attention following the collapse of a building in Germasogeia on April 11, 2026, where three self-catering apartments were operating, intensifying concerns over oversight and safety.

In a statement issued yesterday, the Cyprus Association of Tourist Enterprises (STEK) said the report confirmed long-standing concerns that accommodation continues to operate without the required licences, effective inspections or sufficient coordination between public authorities. According to the association, these shortcomings have weakened the state’s ability to properly supervise the sector.

STEK argued that inadequate regulation extends beyond unfair competition for licensed hotels. It said weak enforcement also adds pressure to the housing market, makes it more difficult for permanent residents to find affordable homes, affects neighbourhood quality of life and may pose risks to visitor safety.

Seven Proposals

As the Deputy Ministry of Tourism prepares new legislation, STEK has proposed seven measures for inclusion in the draft bill:

Effective and systematic inspections to detect illegal accommodation.
Stronger enforcement, including administrative and financial penalties.
Mandatory display of registration numbers on digital platforms and cooperation with authorities to remove illegal listings.
Limits on the number of days properties can be rented on a short-term basis, in line with practices adopted in several European countries.
Powers for local authorities to restrict or prohibit short-term rentals in areas facing housing pressure or significant disruption.
A mandatory overnight stay levy.
Common safety, health and insurance standards across all hospitality providers.

Audit Finds Widespread Non-Compliance

As of May 6, 2026, Cyprus had 8,464 licensed self-service accommodations registered in the Self-Catering Accommodation Register. However, the Audit Office found that many properties advertised on online booking platforms were either missing from the register or displayed incorrect registration details, making effective supervision difficult.

Of the 20 properties that could be identified, only six (30%) were properly registered and held valid licences. Ten (50%) displayed no registration number and did not appear in the official register, while four (20%) used registration numbers that were either no longer valid or belonged to different properties.

Deputy Ministry Points To EU Rules

Responding to the findings, the Deputy Ministry of Tourism acknowledged that some properties advertised on digital platforms are either unregistered or fail to display a registration number. It said the issue will be addressed through the implementation of Regulation (EU) 2024/1028, whose provisions became applicable on May 20, 2026, strengthening the registration and verification framework for short-term rental platforms.

Hotel Sector Also Faces Licensing Problems

The Audit Office found that compliance issues extend beyond self-service accommodation. As of April 27, 2026, only 168 of Cyprus’ 728 hotels and tourist accommodations (23%) held a full operating licence, while another 158 establishments (22%) were operating under temporary permits.

The remaining 402 establishments, representing 55% of the total, were operating without either an operating licence or a temporary arrangement. The report concluded that the facilitation measures and transitional arrangements introduced in recent years have not achieved the intended level of compliance across the sector.

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

by THEFUTURE.TEAM

November 9, 2026

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.

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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.

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