Smart investing, living and doing business in Cyprus: all this month's updates at a glance.
Welcome to the May edition of the Cyprus-Consult newsletter. This month, we bring you new legislation, real estate trends, economic figures, and insights on international tax law relevant to investors, buyers, and entrepreneurs in Cyprus.
Real Estate and Market Trends
The Cyprus real estate market will remain dynamic in 2025. In the first four months of this year, 5,541 real estate transactions were recorded, a 12% increase compared to the same period last year.
- Famagusta saw the strongest monthly growth with a 33% increase in April.
- Larnaca remains the most affordable region with a median home price of €302,534, while Limassol remains at the top of the price range with a median of €650,000.
- The average rental yield for apartments is 5.42%, with peaks of up to 7% in Limassol.
- program permanent residence permit remains attractive: from a property value of €300,000, non-EU citizens can gain access to a residence card in Cyprus.
Economy and Tourism
Cyprus continues to perform strongly economically:
- The country realized a budget surplus of €580 million in Q1 2025, accounting for 1.6% of GDP.
- The economy grew by 3% in the first quarter, and inflation remains on track towards the ECB's target of 2%.
- Larnaca and Paphos airports handled more than 1.15 million passengers in April (+20.6% year-on-year).
- Tourism revenue rose by 35% to €148.9 million in the first two months of the year.
Legislation and Regulations
Important legal updates with direct impact for companies and investors:
- New decrees clarify the application of anti-abuse provisions for payments to “low-tax” and “blacklisted” jurisdictions.
- Cyprus companies must demonstrate that the receiving party meets at least 5 of 6 substance criteria (such as local administrative seat, operational costs, physical presence, etc.).
- The tax authorities may request supporting documents and failure to meet the conditions may lead to the withholding of withholding tax (WHT).
- The CJEU confirmed that EU Member States may refuse tax exemptions on dividends in the case of artificial structures, even when they do not involve “conduit companies”.
Current Investment Themes
- Startups in Cyprus are booming, with the country climbing to 40th place in the world ranking of fastest-growing ecosystems (StartupBlink Index).
- Demand for property in Larnaca and Paphos is increasing as Limassol becomes too expensive for many investors.
- The Ombudsman calls for equality in property ownership laws for foreigners.
- Rental laws are being revised and banks are currently auctioning properties at up to 27% below market value.
What can you do?
Do you want to invest, emigrate or optimize your tax structure through Cyprus?
Book your no-obligation consultation: https://cyprus-consult.com/1-on-1-consultatiegesprek/
