Cyprus Business Development Organisation: SME Funding in 2026
Cyprus Law Chambers | Law Chambers Nicos Papacleovoulou LLC. Sources checked: 6 September 2026. This guide concerns the Cyprus Business Development Organisation (Κυπριακός Οργανισμός Ανάπτυξης Επιχειρήσεων, ΚΟΑΕ), referred to here as KOAE.
What does the new law mean for a Cyprus business?
Cyprus has created a public-law organisation to help eligible businesses access finance where market funding is insufficient. The important distinction is that an enabling law is not a funding approval: a business must identify the relevant scheme, satisfy its terms and obtain the required decision before treating support as available.
As at 6 September 2026, the official sources checked for this guide did not identify a verified open KOAE application call, application portal or deadline. This is a statement about what we could verify, not a claim that every possible funding channel has been exhausted. The statute expressly makes loans, co-lending, guarantees, grants and advisory support dependent on schemes and their terms. See Law 124(I)/2026, section 6.
What has been confirmed, and what still needs checking?
The Cyprus Business Development Organisation Law 2026, Law 124(I)/2026, was published on 24 July 2026. Section 68 provides for commencement on a date determined by Cabinet in a decision published in the Official Gazette. Read the published statute.
On 7 August 2026, the Presidency announced that Cabinet had approved commencement and appointed the first board. The announcement describes a move into organisational development and the gradual development of activities. It should not be read as an invitation for every SME to apply immediately. See the Presidency announcement of 7 August 2026.
For a particular funding opportunity, the next evidence to obtain is the official scheme and call: its operator, opening date, eligibility rules, financing instrument, eligible expenditure, selection process and application route. We do not publish an interest rate, grant percentage or approval timetable here because those scheme-specific terms have not been verified.
Which businesses could be relevant?
Section 2 identifies micro, small and medium-sized enterprises registered and operating in the Republic of Cyprus. It refers to the EU SME definition. Registration alone therefore should not be presented as sufficient qualification. See Law 124(I)/2026, section 2.
SME status involves staff headcount and financial measures, with ownership and group relationships also relevant to the assessment. A small Cyprus company within a larger group should not assess its status using only its own payroll. The European Commission explains the framework in its SME definition guidance.
The Presidency also identifies self-employed persons among the intended beneficiaries. Their position still requires assessment against the applicable definition and scheme. A business in Paphos, Limassol, Nicosia, Larnaca or another part of the Republic should check the same published criteria, including any geographic or sector restrictions in the particular call.
What forms of support does the framework contemplate?
Section 6 enables loans and other credit, co-lending, guarantees, grants and advisory or skills programmes through schemes. It also provides for participation in investment vehicles principally directed towards SME equity or quasi-equity. These are statutory powers, not a catalogue of products confirmed as open today. Read section 6.
The organisation is designed to complement, rather than compete with, existing finance providers. It cannot accept deposits. Its activities must comply with the applicable state-aid framework and anti-money-laundering requirements. Read sections 5 and 8–10.
In practical terms, do not treat a grant, a repayable loan and a guarantee as interchangeable. For each offer, establish who owes what, whether security is required, when money is released and what happens if the project changes or the conditions are breached.
Five legal-readiness checks to make before an application
The following is our practical preparation checklist. It is not an official KOAE application-document list and does not establish eligibility.
1. Identify the applicant and its ownership
Assemble current registration and constitutional documents, directors and shareholders, beneficial ownership information and a clear group chart. Resolve inconsistent names or ownership records before they are repeated in an application. Ask your accountant and legal adviser to test the relevant SME classification, rather than relying on the description “small business”.
2. Define the project and funding need
Prepare a short project description, costed budget, proposed use of funds and realistic cash-flow forecasts with your accountant. Separate working capital, equipment, premises and development expenditure. Match invoices, quotations, licences and delivery dates to the intended project, while leaving room to adapt to the eventual scheme rules.
3. Review existing borrowing and proposed security
Locate loan agreements, guarantees, charges and relevant shareholder arrangements. Check whether new debt, additional security, asset disposals or changes of ownership require consent. A headline reference to public support does not establish that an existing lender has agreed or that a director will avoid personal exposure.
4. Assemble public-support and compliance records
Keep an organised record of existing or previously received public support, the recipient entity, award dates, relevant conditions and funded costs. Have the applicable state-aid treatment checked for the proposed scheme. Resolve identity and source-of-funds evidence early, and use a verified secure channel rather than sending sensitive records to an unverified funding intermediary.
Related guide: Cyprus KYC and source-of-funds preparation.
5. Check authority and contractual timing
Confirm who can authorise the application, borrow, grant security and sign project contracts. Before committing to expenditure, check whether the scheme restricts project commencement or requires approval first. Do not invent that restriction where it does not apply, but do not assume that expenditure incurred early will be eligible.
For example, a Paphos business planning to purchase equipment should not sign an unconditional order merely because a funding law has been enacted. Consider an appropriate financing condition or staged commitment, aligned with the supplier’s terms and the actual scheme timetable. This is an illustrative risk-management example, not a report of a client case.
Before accepting funding, ask four questions
What must be paid, repaid or secured, and by whom?
Which conditions must be satisfied before the funds are released?
What reporting, monitoring and ongoing project obligations continue afterwards?
What happens if the project changes, a deadline is missed, or a grant must be recovered?
Have the actual offer and funding agreement reviewed alongside your commercial contracts. A financing decision and the legal consequences of signing the documents are separate questions.
Frequently asked questions
Can my business apply to KOAE now?
An open KOAE application call, portal and deadline were not verified in the official sources checked on 6 September 2026. Obtain the current official scheme and application instructions before applying or committing expenditure in reliance on funding.
Does the new law guarantee my business a grant?
No. The law creates a framework and powers. A grant is only one possible form of support, and access depends on the relevant scheme, its conditions and the required approval.
Can a self-employed person be considered?
The Presidency’s 7 August 2026 announcement includes self-employed persons among the intended beneficiaries. The applicant must still satisfy the relevant enterprise definition and the particular scheme’s eligibility rules.
Is KOAE a replacement for my bank?
No. Its statutory purpose is to address identified funding gaps without competing with existing finance providers. The law also prohibits KOAE from accepting deposits.
Will a guarantee remove my company’s repayment obligation?
Do not assume that it will. Review the loan and guarantee documents to establish repayment duties, security, recourse and any personal obligations. The label “guaranteed loan” is not a substitute for reading the terms.
How Cyprus Law Chambers can assist
Our Paphos-based team can assist with the Cyprus corporate and contractual workstream: identifying the applicant and signing authority, reviewing ownership and governance records, and examining proposed loan, guarantee, security and project documents. Financial forecasts and tax or specialised funding assessments should be coordinated with the appropriate advisers.
For our existing service scope, see Corporate and Commercial Law.
To request an initial assessment, tell us the business activity, proposed applicant, ownership structure, project, anticipated financing need and any official scheme or offer already received. Formal advice is subject to conflicts, client due diligence and an agreed engagement. We do not control funding selection or lending decisions and cannot guarantee approval.
Cyprus Law Chambers | Law Chambers Nicos Papacleovoulou LLC | Paphos, Cyprus | law@papacleovoulou.com | +357 26 933218.
Primary sources and scope
Implementation announcement: Presidency of the Republic, 7 August 2026.
SME classification: European Commission guidance.
General information only, not individual legal, tax or financial advice. The Greek statutory text and applicable official instruments govern. Funding availability and scheme terms must be checked at the time of the proposed application. Sources checked on 6 September 2026.
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