2020 Cyprus Country Report

Also the country’s investment promotion
agency, Invest Cyprus, announced in 2018 a
collaboration with Singapore-based blockchain
platform VeChain and the American organisation
CREAM, which provides advisory services
for projects and investments in the blockchain
area. The objective is to create a new framework
of cooperation, recommend policy reforms and
establish the necessary legal framework to regulate
the application of blockchain technology
in Cyprus’ financial sector. Another non-profit
organisation supporting the research of blockchain
technologies is called Cyprus Blockchain
Technologies (CBT), which is a consortium including
the University College London, the Bank
of Cyprus and KPMG.
FOSTERING START-UPS
Attracting more innovation and talent is key to
Cyprus’ efforts to secure a digital future, which is
why the country has introduced financial incentives
for innovative SMEs and start-ups launching
on the island. To entice more international talent
from non-EU countries to launch innovative
ventures in and from Cyprus, a pilot programme
called the Start-Up Visa scheme was set up in
2017, which has been extended until May 2021.
The move is expected to further boost entrepreneurship
with the goal to create new jobs,
promote innovation and research, and diversify
the country’s business ecosystem. Approved applicants
will initially get the right to live and work
in Cyprus for at least a year, and if successful in
launching their start-up and creating jobs, the
visas can be extended indefinitely. So far, most
interest has come from the Middle East, and
given Cyprus’ proximity to the area it makes the
island an attractive option for innovators from
the region to stay close to home while working in
a competitive and business-friendly environment
with access to EU markets.
Attracting more tech pros to Cyprus will ultimately
lead to cross-fertilisation among professionals
and an increase in local start-ups. As
the country’s tech eco-system grows, it will also
bring venture capital through its SME Equity
Fund. The government has allocated €20 million
to this fund, and it will be used in combination
with other lenders. These lenders will commit
their own funds in combination with state
money – without the expectation of any return.
Distribution through banks will ensure that projects
are vetted properly for viability before receiving
funding.
Start-up accelerators like the Cyprus Business
Angels Network (CYBAN), Cypriot Enterprise
Link, Chrysalis Leap and Repower Cyprus have
all boosted the environment, along with events
such as Hack Cyprus Hackathons, the Clean
Launchpad Competition, as well as Startup
Weekend and Startup Live. Home-grown talent
and a burgeoning tech landscape are launching
inspirational success stories, and a new research
centre on interactive media, smart systems and
emerging technologies (RISE) was inaugurated
in Nicosia in 2017. The project is a joint venture
between the three public universities – University
of Cyprus, Cyprus University of Technology, and
the Open University of Cyprus – the Municipality
of Nicosia, and two international partners, the
German Max Planck Institute for Informatics
and University College London.
As part of the new National AI Strategy,
a vibrant start-up ecosystem will also be fostered
through the development of an accelerator
program to support the successful launch
and survival of new AI business ventures. This
program will provide expertise in developing AI
solutions, and help firms access expert communities.
Apart from creating opportunities to team
up with other firms and research institutions, and
facilitating the access to flexible and effective financial
funding, this program will also provide
dedicated support to testing and open data environments
– including regulatory sandboxes.
The growth of the AI start-up ecosystem will be
encouraged through national funding programs
and state incentives, which will be complemented
with European funding programs such as
Horizon 2020.
GOING DIGITAL
In a bid to catch up to the rest of the EU in digital
transformation and innovation, Cyprus is now
taking huge strides and is determined to succeed
in developing the sector for both companies and
the state to better capitalise on innovative ideas
and products. The country’s tech landscape is
sure to see substantial growth in the coming
years also thanks to its top-tier universities and
research institutes providing increasing numbers
of highly qualified staff and carrying out groundbreaking
and technologically innovative projects.
Automating public services, upgrading networks,
and promoting entrepreneurship are key goals
for Cyprus to strengthen its global competitiveness
amidst the Fourth Industrial Revolution.
An increasing number of technology companies
are choosing to locate their operations to Cyprus
because of its cost-effective services, favourable tax
and business environment, and with new incentives
and digital strategies in place it is no wonder
the island is also emerging as a start-up hotspot for
entrepreneurs to kick-off new ventures. n
Discover more at www.cyprusprofile.com
Sector Profile
Country Report CYPRUS 2020 131