2022-2023 Cyprus Country Report

CYPRUSCOUNTRY REPORT 2022
EXCEEDING EXPECTATIONS
Successive credit rating upgrades over the years and the continuous introduction
of new incentives have attracted billions in foreign investment to Cyprus, with
substantial inflows from the US, Asia, the Middle East and Eastern Europe. The sectors
that have seen the most significant FDI so far are: finance, most notably in shipping;
real estate in new luxury developments and infrastructure projects; information and
communication; retail trade; and professional services, in particular head-office
activities.
Although having faced some serious
economic shocks over the last ten years,
the resilience and growth performance
of Cyprus has been exceptional and even
exceeded international expectations.
Real GDP growth averaged 5.3% in 2015-
19, and while 2020 marked a critical
downturn due to the Covid-19 pandemic, 2021 saw a strong rebound with growth
bouncing back to 5.5%. Foreign investment flows have been significant. In the tenyear
period 2012-2021, net inflows reached almost €18 billion. This investment was
driven by equity, with the shipping/shipping finance and real estate sectors playing
an important role.
GROWING TECH INVESTMENT
The technology and communications sector in Cyprus has become fiercely
competitive, with a number of players deploying cutting edge solutions to both
increase their local market share and generate growth through the launch of new
technology and products. 5G was rolled out in 2021, making Cyprus the first EU state to
achieve 100% 5G coverage.
Cyprus is already home to a number
of major tech firms, such as NCR,
Amdocs, Wargaming, 3CX, Exness,
Bolt, Thomson Reuters, Melsoft Games,
and Nexters, and has gained ground
in successfully attracting investment
capital in blockchain. The country’s startup
community has also grown stronger
with more than 200 enterprises and
4,000 entrepreneurs, fostering more
opportunities for business angels and
venture capitalists looking to invest
risk capital in exchange for equity in
promising business ideas. In addition, a
key attraction for high-tech companies
is the Cyprus Intellectual IP Box Regime,
I5G was rolled out in 2021, making
Cyprus the first EU state to achieve
100% coverage
IIn the ten-year period 2012-2021,
net inflows reached almost
€18 billion
which provides a competitive maximum
tax rate of 2.5% on income earned from
IP assets. Cyprus’ regime also applies to
a wider range of income compared to
31