Philenews

The European AI Act and its Implications for Cypriot Businesses

Published January 18, 2026, 09:17
The European AI Act and its Implications for Cypriot Businesses

The European Union has adopted the Artificial Intelligence Act (AI Act), a groundbreaking regulatory framework that directly impacts businesses, including Cypriot SMEs. The regulation is based on the principle of risk management, aiming to ensure safety, transparency, and respect for fundamental rights. Any company developing, using, or procuring AI solutions is subject to its provisions, even if located outside the EU, as long as the AI results are used in the European market. The obligations arising from the AI Act are clear, and the penalties for non-compliance can be significant, reaching up to €35 million or 7% of global turnover. To help SMEs prepare, the Data ProTech project, funded by the EU and implemented by the Office of the Commissioner for Personal Data Protection, the Cyprus Chamber of Commerce and Industry (CCCI), and the University of Limassol, is developing an online self-assessment tool and educational materials. Data ProTech aims to strengthen compliance with both the GDPR and the AI Act, taking into account the specific needs and challenges of Cypriot SMEs. A confidential questionnaire is currently underway to record the challenges and opportunities arising from the use of AI in businesses, the results of which will be used to create practical educational materials. Compliance with the AI Act and GDPR is not only a legal obligation but also an opportunity for Cypriot businesses to enhance their credibility, trust, and competitiveness in the digital market. With the right support, such as that provided by Data ProTech, SMEs can address the challenges and leverage the opportunities offered by AI.