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Stek Renews Call For Tougher Action On Illegal Short-Term Rentals

The Association of Cyprus Tourist Enterprises (Stek) has renewed its call for stricter oversight of short-term holiday rentals, arguing that a recent Audit Office report confirms long-standing concerns about weak regulation and enforcement.

Audit Findings Reinforce Long-Standing Concerns

According to Stek, the report exposes significant shortcomings in the supervision of online short-term rental platforms, raising concerns about visitor safety and the reputation of Cyprus’ tourism industry.

“The weaknesses in the supervision and control mechanisms for electronic short-term rental platforms constitute a significant risk to the safety of users and may have a direct negative impact on the credibility and quality of Cyprus’ tourism product,” the association said.

For years, Stek has argued that the existing legal framework has failed both in design and implementation, allowing accommodation providers to operate without the licences required by law.

Calls For A Stronger Regulatory Framework

Maintaining a property register alone is no longer sufficient, the association said. Instead, Cyprus needs a comprehensive system based on inspections, effective supervision and meaningful enforcement to ensure all accommodation providers operate under the same rules and safety standards.

Beyond creating unfair competition for licensed hotels, the rapid expansion of short-term rentals has also increased pressure on housing availability, disrupted residential neighbourhoods and, in some cases, created safety concerns for guests.

Stek welcomed the Deputy Ministry of Tourism’s plans to revise the legislative framework, describing the review as an opportunity to address longstanding weaknesses and bring Cyprus closer to practices already adopted in several European countries.

What Stek Wants To See

Among the proposed measures are systematic inspections, stronger enforcement powers backed by meaningful financial penalties and mandatory registration numbers displayed on all online listings.

Stek also supports closer cooperation between booking platforms and public authorities to remove illegal listings more quickly, as well as introducing a maximum annual rental period for short-term accommodation.

Additional proposals include allowing local authorities to restrict short-term rentals in areas facing housing shortages or excessive tourism pressure, introducing an overnight stay levy and applying common safety, health and insurance standards across all accommodation providers.

Europe Is Tightening Regulation

Pressure for reform is growing across Europe as governments seek to address the impact of short-term rentals on housing affordability and local communities.

Several cities, including Paris, have introduced stricter limits on the number of days primary residences can be rented each year, while EU rules that entered into force in May 2026 require hosts to register properties through a common database, making it easier for authorities to identify illegal listings.

The issue is becoming increasingly significant in Cyprus. Eurostat data show that guests booked 1.71 million overnight stays through online platforms such as Airbnb, Booking and Expedia during the fourth quarter of 2025.

Across the EU, online short-term rental accommodation recorded 144.3 million guest nights in the first quarter of 2026, up 9.7% from a year earlier, highlighting the sector’s continued expansion and the growing focus on stronger regulation.

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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