True heart Café:
GZG advises on the registration of Cyprus’ First Social Enterprise.
Earlier this week, President Nicos Christodoulides announced a comprehensive package of measures to boost employment of people with disabilities, recognizing the role that social enterprises play in building a more inclusive economy.
We are thrilled to have played a crucial role in this development, as a year ago, we were instructed to advise on the registration of True Heart Café, Cyprus's first registered social enterprise.
What are social enterprises?
A social enterprise is a business model that places social, environmental, and community purposes at the heart of its commercial operations. Unlike traditional companies, whose primary objective is the generation of profit for shareholders, social enterprises reinvest their surplus into advancing their mission, thus supporting marginalised communities, promoting sustainability, or creating employment opportunities for people facing barriers to the labour market. They operate across a wide range of sectors, including hospitality, retail, healthcare and education. Such model has long been embedded in the business culture across Europe and is increasingly recognised by governments as a vital bridge between the private sector and the public good. The introduction of this business model in Cyprus, marks a significant step forward in the island's social and economic landscape.
Equal opportunities for All.
President Christodoulides announced a series of new measures aimed at boosting participation of people with disabilities in the labour market, stressing that the government's aim is for them to "work, create, contribute, be recognised for their many abilities, and have equal opportunities." He acknowledged that there was "a critical gap", noting that "a significant number of school leavers with disabilities, after leaving special education, were neither included in higher education programmes, nor in work, nor in day centres."
Among the most significant measures for the social enterprise sector, the government announced an increase in the subsidies offered to social enterprises, from EUR 10,000 to EUR 25,000, to hire people for "special purposes” without denoting temporary hires.
The subsidy will be offered until 2030, and investments up to EUR 150,000 in social enterprises will not be taxed.
The new package of measures, the maturing legal and regulatory framework, and the reinforcement of financial support mark a significant development, signaling that Cyprus recognizes the social enterprise model and actively incentivises its growth as a vehicle for inclusion. The policy, spanning five ministries, is designed to accompany young people with disabilities from education into employment.
Marking a new journey.
Our team’s work on the registration of True Heart Café was, in hindsight, an early marker of an evolving landscape, and we are extremely proud to have been among the first to participate in this journey. The mandate involved detailed and constructive negotiations over the trading name, as another established foundation was already operating under a similar name. Our team reached an amicable resolution, respecting the interests of all parties.
The legal infrastructure is now in place, the regulatory framework is developing, and the state is actively investing in an ecosystem that allows social enterprises to thrive. We are very keen in supporting the next generation of purpose-driven enterprises as Cyprus continues to build a more inclusive and dynamic economy.
Feel free to reach out to our team for any questions on the establishment of social enterprises in Cyprus, and the relevant legal and regulatory landscape, including the newly announced subsidy and tax incentive framework.