Background information

The aim of the scheme is to encourage investments in digital entrepreneurship and to enhance the degree of integration of digital technology into business. The scheme aspires to contribute to the strategic objectives of the Recovery and Resilience Plan of Cyprus by strengthening and accelerating the digital transition of the Cypriot economy. It also aims to increase the percentage of SMEs that use communication technologies to enhance the digital identities of businesses, provide new opportunities for businesses within the frame of the digital transition and promote digital technology technologies such artificial intelligence, blockchain, computational cloud and massive data.

The scheme is adapted and will be implemented on the basis of the Regulation (EU) No 1407/2013 of 18 December 2013, on the application of Articles 107 and 108 of the Treaty on the Functioning of the European Union on de minimis aid.

Content of measure

Beneficiary businesses of the scheme are

1. Existing small and medium enterprises (SMEs), established before 2022 and still in operation, that will implement expenditures for digital upgrading including e-commerce
2. New SMEs, established after 1 January 2022. New SMEs must propose investing in e-commerce, advanced digital technologies, such as ‘Distributed Ledger Technology’ (i.e., blockchain), heterogenous data sources,the computational cloud, or artificial intelligence in order to be eligible for this measure.

Subsidies granted range between €5,000 and €50,000. The percentage of the subsidy is 50% of the eligible cost of proposals. However, for SMEs located in mountainous or disadvantaged areas, the percentage subsidy is 60% of the eligible costs and the maximum subsidy is €60,000.

Use of measure

The budget available for the scheme is €10 million.

Target groups

Workers	Businesses	Citizens
Does not apply to workers	Applies to all businesses	Does not apply to citizens

Actors and funding

Actors	Funding
National government Employers' organisations	European Funds National funds National Recovery and Resilience Facility

Social partners

Social partners' role in designing the measure and form of involvement:

	Trade unions	Employers' organisations
Role	No involvement as case not in social partner domain	Consulted
Form	Not applicable	Consultation through tripartite or bipartite social dialogue bodies

Social partners' role in the implementation, monitoring and assessment phase:

• No involvement
• Main level of involvement: Peak or cross-sectoral level

Involvement

The Ministry of Energy, Commerce and Industry invited the employers’ organization as well as the Cyprus Information Technology Enterprises Association (CITEA) to participate in designing the scheme. Additionally, the participants in the dialogue were requested and submitted in written their suggestions in relation to the provisions of the Scheme, which have been incorporated and/or considered at the final version of the Scheme. The responsibility for the coordination and implementation of the Scheme is the Industry and Technology Service of the Ministry of Energy; social partners are not involved in the process of the implementation.

Views and reactions

After the successful implementation of the first Call on the digital upgrading of businesses in 2022, the employers’ organisations demanded the reopening of the scheme and welcomed the decision of the government in doing so. They have also called not only for the continuation but the enrichment of the scheme with an even larger budget. The positive response of businesses to the call is indicative of the need of businesses for modernisation through digital upgrading.

Sources

• 15 February 2023: Σχέδιο ψηφιακής αναβάθμισης των επιχειρήσεων (www.meci.gov.cy)