Cyprus SMEs Eligible for Grants and Loans Under Special Government Scheme.
In an effort to support businesses and help boost the economy, the Cyprus Ministry of Finance approved a liquidity grant of €800 million to help finance SMEs through the Cyprus Entrepreneurship Fund.
Companies that are eligible to apply for a grant are those that have up to 250 employees.
Not forgetting the businesses that are registered and operating in Cyprus but have up to 3,000 employees, the Cyprus government has decided in conjunction with the European Investment Bank to offer a lending scheme- which now has a surplus of €500 million. It is envisioned that such loans will be backed 80% by the Pan-European Guarantee Fund.
As per the guidelines issued by the European Commission, further incentives to help new businesses include an Interest Subsidy Scheme towards loans which have been or will be obtained from March 1, 2020 to December 31, 2020. This will extend to self-employed persons and is intended for businesses facing liquidity issues.
Under the Interest Subsidy Scheme, interest on loans for SME’s will be subsidized for a total of 4 years, the breakdown being:
i.) for the first 2 years, interest is subsidized up to 3.5 percentage units,
ii.) for the third and fourth years, the interest is subsidized by 2 percentage units.
The interest on loans to large businesses will be subsidized by 1.5 percentage units.
For companies that have up to 50 employees, there are lump-sum grants amounting to:
i.) Up to 1 person employed: €1250
ii.) From 2 to 5 employees: €3000
iii.) From 6 to 9 employees: €4000
iv.) From 10 to 50 employees: €6000
For more information or to incorporate your business in Cyprus, please contact our lawyers at Emily@eaglaw.co