CYPRUS Law and Practice Contributed by: Kyriacos Scordis, Anna Borovska and Constantinos Kazamias, Scordis, Papapetrou & Co LLC
1. Trends 1.1 M&A Market
• the health sector. The introduction of the new Long-Term Strategy for the Sustainable Development of Cyprus, prepared by the Economy and Competitiveness Council with EU funding, proposes a new development model until 2035 which will render Cyprus as “one of the best places in the world to live, work and be active”. A green and digital transition is at the heart of the strategy, while the goal is to shape the economy in such a way that it is strong enough to absorb external shocks in the future and to strengthen emerging sec - tors, in which Cyprus has a comparative advantage and which to date have probably not been taken full advantage of, such as: • information and communication technology; • higher education; • the primary sector with agro-technology; • sustainable tourism, health and agri-tourism; Another major development in Cyprus was the imple - mentation of a limited tax reform. The new provisions introduce a few changes, the most notable (from a corporate perspective) being the increase in the cor - porate tax rate from 12.5% to 15% in conjunction with (i) the abolition of stamp duty and the deemed dividend distribution on profit earned after 1 Janu - ary 2026, and (ii) the reduction of the special defence contribution rate on actual dividend distributions from 17% to 5% for profit generated after 1 January 2026. In addition, a special rate of tax for profits arising from the disposal of crypto-assets was introduced, namely a flat rate of 8%. 1.3 Key Industries Key industries for M&A activities continue to be those stated in 1.1 M&A Market and 1.2 Key Trends . During 2025 there was a significant increase in M&A activity, with an emphasis on technology and digital technol - ogy, fintech, financial services, hospitality, and con - sumer and retail sectors. • professional services; • renewable energy; and • small-scale industry.
This year saw a significant increase in M&A activity in Cyprus, with a number of headline transactions with particular emphasis in the banking, retail and insurance sector. One of these was the conclusion of the purchase of a majority stake in Hellenic Bank by Eurobank of Greece, followed by a squeeze-out and eventual merger of Hellenic Bank with Eurobank’s own Cypriot subsidiary. In addition, Alpha Bank reached an agreement for a strategic combination of insurance activities in Cyprus, between Universal Life Insurance Public Company Ltd and Altius Insurance Ltd. This acquisition is expected to create one of the top three insurance groups in Cyprus. Another major development in the Cypriot bank-relat - ed M&A market was the acquisition of AstroBank Pub - lic Company Ltd by Alpha Bank Cyprus Ltd, establish - ing Cyprus’s third largest bank. On the retail side, CTC group divested most of its retail activities, with the most significant being the sale of its network of DIY stores. In addition, there are certain sectors that continue to expand despite the current economic climate: amongst these are specific construction and real estate segments, while M&A in relation to tourism, financial services, the health services sector and energy has continued to grow at an increased pace as buyers with long-term plans look for relevant oppor - tunities. Notably, the recent acquisition of ExxonMobil Cyprus Limited by Petrolina (Holdings) Public Limit - ed is an indicator of M&A activity and consolidation across all sectors. 1.2 Key Trends Top M&A activities in 2025 continued to revolve around the following: • banks; • the tourist industry; • real estate; • energy; • technology; • retail; and
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