AGP Executive Report

Cyprus–Libya Business Links: The Cyprus Chamber of Commerce and Industry (Keve) met Libya’s National Development Agency to explore new trade and investment partnerships, with focus on construction, renewable energy and modernising ports and airports, plus b2b meetings with Cypriot firms. Copyright & Music Fees: Cyprus businesses are questioning demands for payments over commercial use of copyrighted music, after a 2017 law left key implementation steps unfinished, including the planned Copyright Authority. Digital Payments Shift: Cyprus banks report a rapid move to digital channels, with noncash payments up 8% in volume and 9% in value in the second half of 2025, while digital transaction ratios at Bank of Cyprus and Eurobank are now near-total. Inflation Pressure: Cyprus recorded 4.4% annual inflation in July, among the EU’s highest, matching Bulgaria and trailing only Romania and Lithuania. Minimum Tax Rules: Cyprus has opened a public consultation on tightening minimum tax rules for large groups under Pillar Two, with comments due by Sept. 5. Energy Interconnection: Greece submitted an EU TEN-E investment approval application for the Great Sea Interconnector, linking Cyprus, Greece and Israel, after progress on the project’s ownership and approvals. Regional Security Watch: NATO said it is ready to defend allies amid reports Iran is considering strikes on US military assets in Europe, with Cyprus mentioned as a possible target; Cyprus also says it is not an Iranian target. Medicine Recall: A recall of certain Remedica medicines has raised concerns among patients in Cyprus, with guidance issued by the Health Insurance Organisation and advice not to stop treatment without a doctor’s input.

Geopolitics & Security: NATO says it is ready to respond to threats after the Financial Times reported Iran has assessed strikes on US-linked military assets in Europe, naming Bulgaria and Cyprus, and even looking at attacks on subsea fibre-optic cables in the Strait of Hormuz. Local Precautions: Cyprus has taken “enhanced precautionary measures” for months, with officials stressing Cyprus is not a target, while Greek forces keep F-16s and a frigate stationed in the area. Regional Defence Posture: Bulgaria has increased security at Bezmer air base after approving US refuelling aircraft use, and Greece is weighing Patriot deployment options to strengthen air defence. Aviation & Tourism: Cyprus Airways expands its year-round network from Larnaca with new direct services to Rome and Munich from December, plus more flights to Heraklion. Cyprus Economy & Policy: Cyprus moves to tighten minimum tax rules for large companies, while CySEC warns funds about an EU-wide risk management review. Digital Connectivity (North): Turkish Cypriots and Turkey sign an “additional” fibreoptic internet protocol to fix gaps in the original deal.

Tax Policy: Cyprus has opened a public consultation on tightening minimum tax rules for large groups, aligning Pillar Two with EU requirements and introducing a qualified domestic minimum top-up tax from Jan 1, 2026. Payments & Banking: Cyprus is preparing “Cyprus IRIS” to let people transfer money using only a mobile phone number, using Greece’s IRIS model, with a target now pushed to early 2027. Energy Infrastructure: The Great Sea Interconnector is moving forward after Meridiam agreed to take a majority stake, but seabed surveys and a NAVTEX notice are still pending as geopolitics complicate the Greece-Cyprus link. Regulation & Markets: CySEC has warned fund managers that ESMA’s EU-wide risk management review will start locally in late 2026 or early 2027, focusing on how firms govern and run risk controls. Geopolitics: Iran is reportedly considering retaliation scenarios that could include Cyprus if the US escalates, though government sources in Nicosia say the island is not a target. Real Estate Demand: A new market report says Dubai residents are increasingly looking to Cyprus property, with overseas buyer activity up 16.9% in H1 2026. Tech & Industry: Cyprus’ gaming sector has broken into Europe’s top ten by revenue, with €3.2bn estimated from 415 studios in 2025.

CySEC Enforcement: Cyprus’ financial watchdog flagged nine unlicensed investment websites, warning investors to verify authorisation on the CySEC register before depositing money. IVF Fallout: A BBC investigation says at least 30 children, mostly British, may have been conceived in northern Cyprus using sperm/egg donors different from those chosen by parents, prompting UK travel advice updates and renewed scrutiny of clinic practices. Tourism Labour Pressure: Hotel unions SEK and PEO accuse some hotels of using temporary agency workers supplied via intermediaries, creating “two-speed” employment and calling for tougher labour inspections. Smart Mobility Upgrade: Cyprus’ transport ministry launched a €41.9m tender for vehicle-actuated “smart” traffic lights in Nicosia and Limassol, with installation due to start in early October. Gamescom Push: Cyprus makes its Gamescom debut with a national delegation led by CYGMA, aiming to attract investors and partners as the island’s gaming sector reportedly tops €3.2bn in revenue. Energy Infrastructure: The Great Sea Interconnector project moved forward as IPTO submitted an investment application for the next section, while a navtex is expected “as soon as possible” for seabed surveys. Digital Finance: Kraken expanded U.S. stock access across the EEA, offering traditional shares alongside tokenised “xStocks” in one account. Property Claims in the North: Greek Cypriot owners’ applications to the north’s Immovable Property/Compensation Commission continue to rise, with 8,755 filed as of mid-August.

CySEC Crackdown: Cyprus’ financial watchdog has warned investors about nine unauthorised entities, saying their websites are not linked to firms licensed under Cyprus’ Investment Services and Activities and Regulated Markets Law, urging people to double-check the operator behind any crypto or investment offer. MiCA Transition Watch: Crypto users are being told to verify the exact legal entity holding their assets after MiCA’s July 1, 2026 transition, as some providers exited and fraudsters shifted tactics. Banking Recognition: Eurobank was named Cyprus’ leading bank for both retail and large enterprises in Euromoney’s 2026 awards, highlighting stronger corporate lending and digital progress after the Hellenic Bank merger. Maritime Talent Pipeline: DP World Limassol wrapped up a two-month internship for four university students, with several past interns later joining the port’s teams. Port/Transport Pressure: The Cyprus-Greece ferry passenger link may not last beyond 2027 unless state subsidy continues, with demand and fuel costs cited as key hurdles. Tourism & Retail Trends: Cyprus’ gaming sector is breaking into Europe’s top tier, with CYGMA estimating €3.2bn revenue in 2025, while local shopping is shifting toward live-shopping and “mystery” promotions. Health & Regulation Alarm: Northern Cyprus IVF investigations claim at least 30 children may have been conceived using wrong sperm or egg donors, while a separate jet ski licensing probe follows an accident and renewed questions about rental rules. Economy Snapshot: Cyprus GDP grew 3.3% in Q2 2026, outpacing the EU average, with officials pointing to fiscal management and investor confidence. Energy/Prices: Gasoline and diesel prices across Europe rose sharply year-on-year, with Cyprus also seeing increases.

Energy & Industry: Cyprus’ energy minister pushed back on claims that solar is “loss-making,” saying curtailments are about grid stability and pointing to large amounts of solar energy wasted in 2025-26 due to constraints and limited storage. Trade & Exports: The Ministry of Energy opened a €1.7m de minimis fund to help Cypriot firms take part in major trade fairs in 2027, including Fruit Logistica, ProWein, Gulfood and Anuga, with a focus on industrial and agricultural products. Finance & Regulation: CySEC flagged nine unauthorised investment entities, while Housing Finance Bank appointed Robert Kusiima Mugabe as chief operations officer as it accelerates digital growth. Economy & Risk: Eurostat data show Cyprus bankruptcy filings fell 41.7% in Q2 2026, though the island’s small case numbers can make quarterly swings look sharper. Society & Labour: Eurostat reports Cyprus’ young people leave home later than the EU average, with youth unemployment down to 9.3% in 2025. Legal: An appeals court ordered the extradition of a Russian national to face trial in a €160m fraud case tied to a state space programme. Business & Growth: JPB agreed a full takeover of Genesis Logistics, and Euroseas locked in earnings through 2028 as profit hit $33.2m.

Cyprus Growth Watch: Cyprus posted 3.3% real GDP growth in Q2 2026, far outpacing the eurozone’s 1%, with Finance Minister Makis Keravnos citing disciplined fiscal policy, a stable financial system and stronger investor confidence. Crypto & Regulation: Revolut’s Cyprus crypto arm has a new chief executive, Georgios Vasiliou, as the Limassol-based unit remains CySEC-authorised under MiCA. Markets & Shipping: Euroseas locked in earnings visibility, securing contracts for over 95% of available fleet days for the rest of 2026, while reporting Q2 profit of $33.2m. Banking Politics: Scope warns Cyprus’ more fragmented Parliament could complicate reforms, with renewed talk of a windfall tax on banks when lawmakers return in September. Capital Markets Oversight: CySEC flagged nine unauthorised investment entities and urged investors to verify licences before dealing. Business Deals: JPB Cyprus Holding agreed to acquire 100% of Genesis Logistics, pending competition clearance. Primary Sector Plan: The €109.3m strategy to boost Cyprus’ primary sector through 2029 targets higher GDP contribution, sustainability and resilience, with projected output and job creation. EU Consumer Rules: Cyprus consumers will benefit from the EU’s right-to-repair rules, pushing repairs over replacements for eligible household and electronics. Shipping Registry Push: Cyprus renewed efforts to attract shipowners with tax stability, EU status and an improved service environment as the registry expands.

Agriculture Push: Cyprus is rolling out a €109.3m “Strategy for the Development of the Primary Sector” through 2029, aiming to lift the sector’s GDP contribution (currently 1.8%). A completed 2025 evaluation says the €106.2m investment could generate €138.6m in total output, add €70.8m to GDP and create around 1,370 jobs, with funding via the CAP and national resources. Banking & Elections: With elections reshaping Parliament, Cyprus banks’ strong post-2022 profits may face renewed political pressure when lawmakers return in September, including talk of a windfall tax and changes to banking laws—though banks are wary of higher taxation. State Milestone: President Nikos Christodoulides marked 66 years since the Republic’s proclamation, calling the state Cyprus’ “most important achievement” and stressing priorities on security, economic upgrading, modernising the state and improving quality of life. Connectivity Upgrade: A new undersea cable, Ugarit 2, is set to connect Cyprus and Syria by early 2028, replacing the older 1995 link and boosting capacity for regional digital connectivity. Energy Link Scrutiny: Commentators are urging a reality check on the Great Sea Interconnector, questioning viability, governance and assumptions in feasibility work, plus route and cost risks.

Cyprus Economy: Cyprus GDP grew 3.3% year-on-year in Q2 2026, outpacing the euro area and EU as growth accelerated to 0.8% quarter-on-quarter. Housing Market: New-home sales slid sharply in Q2, with new-build apartment and house transactions down 42.2% and value down 46.6%, though demand appears to have shifted toward lower- and mid-priced homes. Energy Infrastructure: The Great Sea Interconnector faces fresh scrutiny after a call for a “reality check” on viability, governance and assumptions in earlier studies, as Cyprus-Israel power-link investment steps move forward. Connectivity & Telecoms: Cyta and partners are building the Ugarit 2 undersea cable to connect Cyprus and Syria, targeting service by early 2028 with higher capacity than the current link. Finance & Remittances: Citizens Bank PLC partnered with Cyprus-based Nec Pay to expand inward remittances from Europe, supporting Bangladeshi expatriates and families. Tourism & Costs: Turkey’s coastal hotel prices are easing amid weaker demand tied to the Iran war, with Cyprus also seeing price declines, while last-minute booking patterns shift. Environment: Cyprus-linked research highlights invasive lionfish being turned into food as the Mediterranean’s non-native species surge continues.

Cyprus Growth Watch: Cyprus’ economy accelerated to 3.3% annual growth in Q2 2026, outpacing the euro area and EU, with GDP up 0.8% quarter-on-quarter. Property Market: New-home sales slid sharply in Q2, with new-build apartments and houses down 42.2% by volume and value down 46.6%, though demand appears to have shifted toward lower- and mid-priced homes. Tourism & Travel: Cyprus’ tourism picture is mixed: Paphos airport passenger traffic rebounded, while hotel operators warn of revenue pressure despite August demand; separately, Iran-war-linked weakness is reported to be pushing down Turkey’s coastal hotel prices. Energy & Infrastructure: Cyprus’ first utility battery project has entered commercial operation, and the Cyprus–Israel power link is moving through the next investment stages. Finance & Banking: Citizens Bank PLC partnered with Cyprus-based Nec Pay to expand inward remittances from Europe, supporting Bangladeshi expatriate flows. EU Rules Impact: The EU’s biometric Entry/Exit System is driving long border queues and holiday plan changes, adding pressure to travel demand across Europe. Environment & Food: Cyprus is turning invasive lionfish into food as Mediterranean seas warm and non-native species spread faster. Regional Diplomacy: Egypt and Cyprus’ foreign ministers highlighted momentum in economic, investment, energy and tourism cooperation, including faster implementation on Egyptian worker employment in Cyprus.

Property Market Shift: Cyprus’ new-home market lost momentum in Q2, with new-build apartment and house sales down 42.2% by volume and 46.6% by value, but demand didn’t vanish—buyers appear to have moved toward lower- and mid-priced homes (up to €300,000), while Nicosia showed relative strength. Macroeconomy: Cyprus GDP grew 3.3% year-on-year in Q2 2026, outpacing the eurozone and EU, with quarterly growth also improving to 0.8%—supported by trade, vehicle repairs, ICT, finance/insurance and construction. Investment Funds: The Central Bank of Cyprus reported 353 investment funds in June, with assets rising 2.5% to €8.37bn. Energy Infrastructure: Cyprus-Israel power-link projects moved into the “money stage,” with investment requests and approvals progressing. Tourism & Tech: Cyprus is pushing AI-driven upgrades to tourism services and exploring an AI/fintech workforce strategy. Finance & Markets: Cyprus’ investment funds growth and bank lending targets remain in focus, alongside ongoing developments at the Cyprus Stock Exchange.

Cyprus Economy: Cyprus GDP grew 3.3% year-on-year in Q2 2026, outpacing the eurozone and driven by trade, repairs, ICT, finance and construction. Investment Funds: The number of investment funds in Cyprus rose to 353 in June, with assets up to €8.37bn. Energy Infrastructure: IPTO submitted an investment approval request for the Cyprus–Israel Great Sea Interconnector, saying the project is viable and will boost supply security and renewables integration. Sports Transfers: Aris Limassol rejected Kortrijk’s second €800,000-plus-add-ons offer for midfielder Alex Opoku Sarfo, with talks ongoing. Tourism & Tech: Cyprus is pushing an AI-driven “Smart Tourism” strategy to 2032, while separate coverage highlights Cyprus’ growing AI and fintech ambitions. Regulation & Markets: Cyprus’ used-car sector faces new EU recycling rules, and Cyprus’ stock market saw suspensions tied to company reporting.

Banking Outlook: Greek banking groups with Cyprus operations posted stronger-than-expected Q2 results, with faster lending growth and rising fee income helping analysts lift 2026–27 targets for Eurobank and Alpha Bank. Energy & Infrastructure: The Great Sea Interconnector (GSI) project advanced as Greece’s grid operator filed an investment request for the Cyprus–Israel section, moving regulators toward decisions on cross-border cost allocation. Tech & Skills: Cyprus pushes AI and fintech growth, but a skills mismatch is emerging as STEM enrolment lags while demand for STEM-linked jobs rises. EU Rules for Cars: New EU recycling rules entered into force, tightening controls on used-car exports and raising recycled-plastic requirements, with major provisions starting from 1 Sept 2028. Local Economy & Costs: Paralimni secured planning permission for a town-centre redevelopment aimed at boosting shop activity and visitor access, while consumer groups renewed scrutiny of Cyprus fuel price rises. Trade Links: The Cyprus Chamber of Commerce and Industry in Australia outlined follow-up work to expand trade and investment opportunities across tech, finance, renewable energy, education and healthcare. Sports Business: Aris Limassol midfielder Alex Opoku Sarfo drew reported interest from Belgian side KV Kortrijk, with his €1m market value and contract until May 2028 in focus. Tourism & Culture: Paphos’ August programme highlights mostly free cultural events, including outdoor cinema and music nights. Public Safety & Migration: A UN report flagged increased migrant deaths on the Central and Eastern Mediterranean routes, including more drownings linked to the Greece–Cyprus corridor. Aviation Memory: Cyprus marked the 21st anniversary of the Helios Airways Flight 522 crash.

Electricity Interconnector: IPTO has submitted the next formal investment request for the Great Sea Interconnector, with regulators in Cyprus and Israel now set to assess costs and how the cable will be recovered—an undersea link aimed at ending Cyprus’ electricity isolation. Tourism Demand: Paphos Airport reported a 7% rise in passenger traffic in July year-on-year, with UK, Greece, Israel and Poland among the biggest contributors as the summer season stabilises. AI for Tourism: Cyprus is consulting on a “Smart Tourism 2032” plan to embed AI across tourism services, positioning the island as a “Living Lab” and focusing on adoption by small and medium-sized operators. Crypto & Regulation: Cyprus is pushing on-site audits for crypto custodians, while separate coverage highlights how founders should think about licensing based on the specific activity—not just the “best licence.” Energy & Geopolitics: EU imports of Russian-derived petroleum via intermediaries rose in July, with Spain and Cyprus among top recipients—another sign sanctions are being routed through third countries. Local Business Pulse: Entertainment venues say August is busy but customers remain cautious, with occupancy around 80% and calls for more flexibility on hiring non-EU catering workers. Security & Infrastructure: The UK is buying extra air-raid warning sirens for RAF Akrotiri to cover both the base and Akrotiri village. Crossing Controls: Customs at Agios Dometios seized 245kg of cattle hides and entrails in a car, with the driver fined and the goods destroyed.

Central Bank of Cyprus: The CBC has extended the deadline for tenders to mint, package and deliver Cyprus euro silver and gold collector coins, pushing submissions to September 25, 2026 (from September 4) and keeping the lowest-price award basis. Capital Markets: The Cyprus Stock Exchange extended the suspension of Reputation Exchange Plc shares for another two months, until October 19, 2026, citing the lack of a listing adviser and the missing 2025 annual report. Corporate Finance: Demetra Holdings continued its buyback, repurchasing 3,660 shares on August 12 at €1.465 each under its approved scheme. Energy & Infrastructure: The Great Sea Interconnector project advanced as Greece’s Admie submitted an investment request for the Cyprus–Israel electricity link to both countries’ regulators under EU TEN-E rules. Regional Power Link Push: US lawmakers urged support for the Great Sea Interconnector as a strategic gateway for the IMEC corridor. Tax Reform Watch: A guide on Cyprus tax reform 2026 highlights common filing mistakes companies still make after the new rules took effect. MFSA Governance: Malta’s MFSA chief said it’s easier to keep “bad players” out than to license and punish, underscoring a tougher stance on market conduct. Tourism Outlook: Paphos hoteliers expect 85–90% occupancy in August, while Famagusta targets 80–85%, with pricing pressure and more last-minute demand shaping results.

Energy Interconnector Push: US lawmakers are urging the Trump administration to back the Great Sea Interconnector, a planned undersea power link connecting Israel–Cyprus–Greece, estimated at over $2bn and backed by EU funding. Crypto & Markets: CySEC has imposed €126,500 in fines on twelve Cyprus companies, while Cyprus Stock Exchange is set to suspend trading in six firms over financial reporting issues. Tourism & Hotels: Cyprus hotel demand remains mixed: Famagusta sees a lift from last-minute bookings, while Paphos hoteliers warn of a revenue squeeze despite August activity. Aviation Safety Check: Cyprus transport authorities say inspections found no safety concerns over Ryanair operations after a passenger incident on a Thessaloniki–Munich flight. Cyber/Consumer Fraud: Police report a Nicosia woman losing over €2,200 in an online accommodation scam, warning the public not to pay via links sent by messages. Education & Growth: NKUA’s Cyprus branch says applications are surging, with a 20% acceptance rate for its medical school, as facilities and dorm access are completed. Business & Economy: Cyprus trade dynamics stay in focus, with reports on the trade deficit widening and broader signals of economic slowdown easing. Media Freedom: The Cyprus Journalists’ Union raises alarm over three criminal cases involving journalist Makarios Drousiotis, warning of risks to press freedom.