2023 Doing Business in Cyprus (UK Edition)
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DOING BUSINESS C YPRUS<br />
14<br />
UNITED KINGDOM EDITION<br />
Follow<strong>in</strong>g the country’s f<strong>in</strong>ancial crisis<br />
<strong>in</strong> 2013, <strong>Cyprus</strong> undertook a major<br />
reform agenda and while still fac<strong>in</strong>g<br />
some economic challenges, the small<br />
EU nation has demonstrated resilience<br />
and an ability to bounce back to growth.<br />
The year 2015 signalled a sooner-thanexpected<br />
exit from recession and a rapid<br />
economic turnaround followed, with 2017<br />
record<strong>in</strong>g almost 4% growth – earn<strong>in</strong>g<br />
<strong>Cyprus</strong> praise as an economic success<br />
story. <strong>Cyprus</strong>’ resilience <strong>in</strong> the face of the<br />
pandemic was once aga<strong>in</strong> evident with<br />
GDP growth reach<strong>in</strong>g a strong 5.6% <strong>in</strong><br />
2022, although the European Commission<br />
forecasts a downturn to 2.2% growth <strong>in</strong><br />
<strong>2023</strong>. Consistent credit rat<strong>in</strong>g upgrades<br />
have further boosted confidence and<br />
foreign direct <strong>in</strong>vestment has been<br />
flow<strong>in</strong>g <strong>in</strong>to all key sectors. <strong>Cyprus</strong> has<br />
reta<strong>in</strong>ed and strengthened its status<br />
as an attractive <strong>in</strong>vestment gateway to<br />
the EU and other high-growth markets,<br />
as well as a secure base to tap <strong>in</strong>to<br />
opportunities <strong>in</strong> the Middle East. Offer<strong>in</strong>g<br />
a tax-efficient EU company domicile, the<br />
country is emerg<strong>in</strong>g as an <strong>in</strong>creas<strong>in</strong>gly<br />
attractive location for fund managers and<br />
promoters, and a compell<strong>in</strong>g dest<strong>in</strong>ation<br />
for regional headquarters and a base for<br />
tech companies.<br />
GROWING TECH CLUSTER<br />
The technology space <strong>in</strong> <strong>Cyprus</strong> is<br />
see<strong>in</strong>g a fresh boost with more state<br />
support to the sector, the launch of new<br />
national strategies to <strong>in</strong>tegrate <strong>in</strong>novative<br />
tech, and fresh <strong>in</strong>centives to attract<br />
more digital nomads, IT start-ups and<br />
regional headquarters. With its new focus<br />
on long-term development outcomes,<br />
<strong>Cyprus</strong> is determ<strong>in</strong>ed to diversify and<br />
harness growth with a technology-driven<br />
economy. The biggest spender by far<br />
on IT <strong>in</strong> <strong>Cyprus</strong> is the f<strong>in</strong>ancial sector,<br />
followed by the telecoms providers and<br />
the public service. Albeit one of the<br />
smallest EU member states, research and<br />
EU Member s<strong>in</strong>ce 2004,<br />
Eurozone member s<strong>in</strong>ce 2008<br />
<strong>Cyprus</strong> is the EU’s largest<br />
shipmanagement centre and<br />
amongst the top three <strong>in</strong> the world<br />
<strong>Cyprus</strong> is an established<br />
<strong>in</strong>ternational bus<strong>in</strong>ess and service<br />
centre for shipp<strong>in</strong>g, f<strong>in</strong>ancial<br />
services and commerce, and<br />
is classified by the World Bank<br />
as a high-<strong>in</strong>come country<br />
With its new focus on longterm<br />
development outcomes,<br />
<strong>Cyprus</strong> is determ<strong>in</strong>ed to diversify<br />
and harness growth with a<br />
technology-driven economy.