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Cyprus Sees Sharp Rise In New Mortgage Lending In May As Deposit Rates Remain Among Eurozone’s Lowest

New mortgage lending in Cyprus rose sharply in May 2026, highlighting continued demand for housing finance despite elevated borrowing costs. Net new housing loans increased to €145.5 million from €106 million in April, according to the Central Bank of Cyprus.

Overall Lending Gains Momentum

Net new lending across all categories reached €361.9 million in May, up from €331.3 million a month earlier, reflecting stronger credit activity among both households and businesses.

Mortgage Rates Continue To Rise

The average interest rate on new housing loans increased to 4.06% in May from 3.73% in April, as demand for residential financing remained resilient despite higher borrowing costs.

Consumer And Small Business Lending Expand

Consumer lending also strengthened, with new loans rising to €23.9 million from €21.8 million in April.

Lending to non-financial corporations for amounts up to €1 million climbed to €63.4 million from €39.4 million, while loans exceeding €1 million declined to €121.5 million from €156.8 million, pointing to softer activity among larger corporate borrowers.

Borrowing Costs Show Mixed Trends

Interest rates moved in different directions across lending categories. Consumer loan rates eased to 6.95% from 7.19%, while rates on business loans of up to €1 million edged higher to 4.27%. The average rate on loans above €1 million fell to 3.85%.

Deposit rates also increased modestly. One-year household time deposits rose to 1.25% from 1.20%, while comparable deposits for non-financial corporations increased to 1.31% from 1.23%.

Deposit Rates Remain Among The Eurozone’s Lowest

According to the Central Bank of Cyprus, lending rates remain broadly in line with the euro area median. Deposit rates, however, continue to rank among the lowest in the eurozone, reflecting the banking sector’s strong liquidity position.

Borrowers Shift Toward Fixed-Rate Mortgages

Borrowers continued to favour longer fixed-rate mortgages in May. Loans with variable rates or an initial fixed-rate period of up to one year accounted for 17.8% of new housing lending, down from almost 100% at the beginning of 2022.

The shift reflects a growing preference for payment certainty as households adapt to a higher interest-rate environment.

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.

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