2023 Doing Business in Cyprus (India Edition)
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DOING BUSINESS C YPRUS<br />
25<br />
INDIA EDITION<br />
STRONG REBOUND TO GROWTH<br />
Successive credit rat<strong>in</strong>g upgrades over the years and the cont<strong>in</strong>uous <strong>in</strong>troduction<br />
of new <strong>in</strong>centives have attracted billions <strong>in</strong> foreign <strong>in</strong>vestment to <strong>Cyprus</strong>, with<br />
substantial <strong>in</strong>flows from the US, non-EU countries, and Asia <strong>in</strong>clud<strong>in</strong>g the Middle East.<br />
Although hav<strong>in</strong>g withstood some serious economic shocks over the last ten years,<br />
the resilience and growth performance of <strong>Cyprus</strong> has been exceptional and even<br />
exceeded <strong>in</strong>ternational expectations. Real<br />
I<strong>Cyprus</strong> GDP growth averaged 4.6% <strong>in</strong> 2018-2022<br />
was ranked third<br />
despite the Covid-19 pandemic, the war<br />
worldwide <strong>in</strong> the recovery<br />
<strong>in</strong> Ukra<strong>in</strong>e and other related disruptions.<br />
Foreign <strong>in</strong>vestment flows have been of foreign direct <strong>in</strong>vestments<br />
significant. In the ten-year period 2013-<br />
after the pandemic.<br />
2022, net <strong>in</strong>flows (liabilities) reached €13.5<br />
billion. This <strong>in</strong>vestment was driven by equity, with data on transactions suggest<strong>in</strong>g that<br />
real estate, communications and headquarter<strong>in</strong>g all played an important role.<br />
<strong>Cyprus</strong> was ranked third worldwide <strong>in</strong> the recovery of foreign direct <strong>in</strong>vestments<br />
after the pandemic, accord<strong>in</strong>g to the country’s <strong>in</strong>vestment promotion agency, Invest<br />
<strong>Cyprus</strong>. Accord<strong>in</strong>g to the Greenfield FDI Performance Index of FDI Intelligence, direct<br />
<strong>in</strong>vestments <strong>in</strong> <strong>Cyprus</strong> showed a 150% <strong>in</strong>crease <strong>in</strong> the first half of 2022, compared to<br />
the correspond<strong>in</strong>g period <strong>in</strong> 2019. Also noteworthy is the <strong>in</strong>crease <strong>in</strong> <strong>in</strong>vestments <strong>in</strong><br />
software and IT, which reached a 600% <strong>in</strong>crease <strong>in</strong> 2022 compared to the correspond<strong>in</strong>g<br />
period <strong>in</strong> 2019.<br />
THRIVING TECH HUB<br />
IIn 2022 the country boasted<br />
almost 450 start-ups and scaleups<br />
with a comb<strong>in</strong>ed value of<br />
€3.7 billion<br />
The technology and communications<br />
sector <strong>in</strong> <strong>Cyprus</strong> has become fiercely<br />
competitive, with a number of players<br />
deploy<strong>in</strong>g cutt<strong>in</strong>g edge solutions to both<br />
<strong>in</strong>crease their local market share and<br />
generate growth through the launch of<br />
new technology and products. 5G was<br />
rolled out <strong>in</strong> 2021, mak<strong>in</strong>g <strong>Cyprus</strong> the first<br />
EU state to achieve 100% 5G coverage.<br />
<strong>Cyprus</strong> is already home to a number of<br />
major tech firms, such as NCR, Amdocs,<br />
Wargam<strong>in</strong>g, 3CX, Exness, Bolt, Thomson<br />
Reuters, Melsoft Games, Easybra<strong>in</strong><br />
and Nexters, and has ga<strong>in</strong>ed ground <strong>in</strong><br />
successfully attract<strong>in</strong>g <strong>in</strong>vestment capital<br />
<strong>in</strong> blockcha<strong>in</strong>. The country’s start-up<br />
community has been grow<strong>in</strong>g rapidly. In<br />
2021, <strong>Cyprus</strong> broke national records with<br />
€85.5 million raised by start-ups, and<br />
<strong>in</strong> 2022 the country boasted almost 450<br />
start-ups and scale-ups with a comb<strong>in</strong>ed<br />
value of €3.7 billion. With an estimated<br />
4,000 entrepreneurs, the buzz<strong>in</strong>g hub is