The Ministry of Commerce, Industry and Tourism will assign to a recognised consulting firm to carry out a detailed study, for the introduction of business incubators in Cyprus. Although the final form and the details pertaining to the operation and management of the incubator will be decided upon completion of the study, the basic features of the incubator, as they have emerged from the study so far carried out by the Ministry, are outlined below.

Business incubators are an institution through which the necessary support is given to new inventors in order to develop and commercialise their innovative ideas, while at the same time they help create and organise a new enterprise which will utilise the new products which will be developed.

The initial stages of enterprises in the high-tech field involve many risks, which act as a deterrent for external investors. As a result, many excellent ideas are left unexploited. Incubators aim at helping new inventors in the early stages in order to materialise, develop and trade their innovative ideas and create new productive enterprises. Countries where companies succeed in this field, have capitalised on their success.

The various managing bodies of the incubator and their responsibilities as well as the details pertaining to the incubator´s operation will be defined upon the completion of the detailed study. In general, the responsibilities of the above bodies will be:

• To adopt a policy concerning the sectors where incubators will be involved
• To approve the various procedures
• To supervise incubator development and the progress of incoming enterprises
• To terminate the stay in the incubator of any enterprises which fail to fulfil their obligations.

The incubator will offer the following basic services:

The incubator will offer full office services:

• Office space
• Laboratory space
• Basic furniture
• Telephone
• Telefax
• Computer network
• Internet connection,
• Electronic and conventional mail
• Messenger services
• Air conditioning.

The incubator will also provide:

• Access to Data Bases,
• Access to a transfer of technology network,
• Scientific and consulting support.

Applications submitted should involve a research and development plan, based on an innovative technological idea, which will aim at developing a final product preferably with an export orientation. Information about admission conditions and criteria and other matters (e.g. associates, field of expertise, sectors etc.) will be issued by the competent managing bodies of the incubator.

Individuals or small groups will be able to participate in the incubator provided they will submit to the competent committee a complete operational plan which will satisfy the pre-defined selection criteria. The incubator authorities may also consider applications involving the participation of non-Cypriot inventors.

An enterprise will stay in the incubator for a maximum of 2 years, unless the incubator approves an extension.

An individual (or group) who will be admitted to the incubator will have the obligation to form a limited liability company (LTD) in which:

• 50% of the company shares will be given to the inventor/s,
• 25% of the shares will go to the inventor´s associate/s who will deposit a sum covering 25% of the capital. The inventor will have the right to deposit this sum and acquire the shares for himself. (The above mentioned sum will be deposited gradually and in conjunction with the use of the government subsidy).
• 25% of the shares will go to the incubator.

The incubator will finance the limited liability company (through special budgets of the Ministry of Commerce, Industry and Tourism) with a grant of up to £100.000. In case the limited liability company starts operating commercially after it leaves the incubator, the company will have to pay back 20% of the total grant amount without any interest within a period of 10 years. The incubator will release funds according to six-monthly budgets and reports describing the progress of the limited liability company.

The company should, within a period of 24 months from the date of the signing of its contract with the incubator, deliver a commercial product. At the end of the 24 months period, the company will withdraw from the incubator.

The incubated enterprise will have to pay symbolic amounts for the use of incubator services.

The enterprise must leave the incubator after 24 months and return the facilities in the same state as they were when it first occupied them.