With a strong foundation in cross-border investment and a business environment aligned with global standards, Cyprus has evolved from a traditional offshore centre into a sophisticated, EU-regulated financial services ecosystem. Today, the country attracts a growing number of global firms seeking a quality-assured, cost-competitive base for operations.

The transformation has been driven by robust regulatory reform, economic resilience, and a strategic pivot toward high-growth sectors. Cyprus delivers world-class services in fund management, trust administration, and wealth structuring, backed by a regulatory framework that supports innovation while maintaining investor protection.

A standout in the foreign exchange industry and increasingly influential in wealth and asset management, Cyprus is also gaining recognition as a regional management hub for investment funds. Investment inflows from Asia, the Middle East, and Africa are accelerating, reflecting confidence in the country’s long-term stability and governance.

At the same time, Cyprus is building competitive advantage in emerging sectors. Its fast-growing fintech scene – spanning payments, regtech, crypto, and digital platforms – is supported by forward-looking initiatives making the island an ideal EU base for next-generation financial ventures.

Crisis as a Catalyst

The 2013 financial and banking crisis was a catalyst that fundamentally reshaped Cyprus’ financial ecosystem. Facing a €10 billion bailout by the European Commission, the European Central Bank and the International Monetary Fund, Cyprus underwent robust sweeping reforms, from reinforcing corporate governance to expanding into asset classes like investment funds and fintech. Today’s financial services sector is markedly broader and more agile, underpinned by deeply improved compliance, transparency, and international credibility.

The sector has matured into a trusted, adaptive pillar of the economy, capable of evolving rapidly in response to external shocks. Cyprus’ journey, from crisis to receiving investment-grade ratings across all major agencies, underscores the success of its recovery and the renewed investor confidence in its financial foundations.

A Resilient Ecosystem

The country’s financial services landscape has expanded into a sophisticated and diversified sector, with financial and professional services contributing 10% and 7% respectively to Gross Value Added (GVA) in 2024. The Cyprus Securities and Exchange Commission (CySEC) supervises around 830 entities, a 11.8% rise over five years, reflecting increasing investor confidence and regulatory relevance. Beyond regulation, Cyprus is investing in modern infrastructure, innovation, and talent. Through fintech-friendly platforms, firms are experimenting with blockchain and AI for fund administration, risk profiling, and identity management – while professional bodies are expanding compliance training in areas such as ESG, digital governance, and cybersecurity.

Foreign businesses have long been attracted to Cyprus due to its cost-effective services and preferential access to high-growth markets. Corporate services and corporate structuring continue to play an important role, while investment funds, trust services and private wealth, as well as fintech, are all growing elements of the sector and have potential for further expansion. Today, Cyprus is home to a unique blend of both local and international financial services firms, with the professional services segment headed by the ‘Big Four’ as well as a range of top-tier legal, accounting and corporate services providers with plenty of international expertise.

Attractive HQ Base

Corporate formation has long been a cornerstone of Cyprus’ financial and professional services offering. Blue-chip corporations, family offices, and global corporate planners continue to establish holding, trading, and investment companies here to channel capital into key growth markets worldwide. The island’s stable EU jurisdiction, neutral political stance, competitive 12.5% corporate tax rate, and network of around 70 double tax treaties have made it a preferred base for structuring investments into Europe, the Middle East, and Africa.

However, in the past decade, Cyprus’ role has expanded beyond corporate setup to become a thriving regional and international headquartering hub. A combination of strategic geography, high-quality professional services, and a pro-business regulatory environment has attracted multinational firms seeking to centralise operational, management, and back-office functions on the island. Industry leaders such as NCR, Kardex, Amdocs, Bernhard Schulte Shipmanagement, Revolut, and Wargaming have chosen Cyprus as a headquarters location, benefitting from its skilled, multilingual workforce, advanced telecoms infrastructure, and strong air connectivity.

Over 400 foreign companies flocked to register in Cyprus in 2024, according to the Ministry of Commerce, and the momentum has continued in 2025 with 246 new foreign companies establishing in the country between January and July. This wave is driven by firms relocating full headquarters, not just satellite offices, and these relocations span diverse sectors, including IT, fintech, shipping, and real estate, among others.

This headquartering momentum is also reinforced by government and the country’s investment promotion agency Invest Cyprus initiatives to attract global companies in technology, shipping, and professional services, alongside streamlined immigration policies for skilled non-EU talent. As a result, Cyprus is steadily building its reputation as a strategic command centre for regional and global operations.

Stable Banking and Insurance 

Cyprus’ banking sector emerged from the 2013 crisis significantly stronger, thanks to deep restructuring and disciplined oversight. In the third quarter of 2024, the sector’s Common Equity Tier 1 (CET1) ratio – a key solvency metric – stood at an exceptional 23.5%, its highest level on record and well above the European average of 16%. Liquidity remains a standout strength, with the Liquidity Coverage Ratio (LCR) – a key indicator of credit institutions' capacity to withstand severe liquidity stress – reaching 336%. This exceeds the regulatory minimum of 100% by more than threefold and stands well above the European average of 161.4%, according to the Central Bank of Cyprus. The non-performing loan (NPL) rate has also continuously declined, reaching 6.5% in Q3 2024, the lowest since 2014, though still above the EU average of 1.9%. 

However, these strengths are not just numeric, as the Central Bank has underscored a forward-looking supervisory strategy, one that blends innovation, macro prudence, and emerging risk management – such as AI, cyber threats, climate risk – to maintain financial system resilience. The market has also seen some M&A activity with Greek banks such as Eurobank acquiring Hellenic Bank, and Alpha Bank absorbing AstroBank, leading to significant consolidation in the market.

The insurance market is also going from strength to strength, underpinned by sustained premium growth and increasing consolidation, with merger and acquisition activity reshaping the industry. In Q1 2025, life insurance premiums rose by 3.6% (3.3% excluding accident/health), while general insurance grew 7.1%, showing strong resilience. However, insurance in Cyprus focuses mostly on domestic business. While the island is home to around 30 insurance companies, only a small number of them are writing business outside of Cyprus and taking advantage of EU passporting rights. Industry experts say that this segment of the financial sector could be developed further, highlighting that Cyprus is well positioned as a base for companies wishing to do business in the EU and the Middle East region.

Europe’s Rising Funds Gateway 

The investment funds industry in Cyprus has transformed from virtually non-existent a decade ago into one of the fastest-growing segments of its financial sector. Regulatory overhauls, EU-aligned legislation, and proactive promotion have positioned the island as a credible and competitive player in the global asset management arena.

Assets under Management (AuM) surged from just €2.7 billion in 2016 to €10.7 billion in Q1 2025, underscoring sustained investor and manager confidence. Interest is flowing not just from Europe, but also from Asia and the Middle East, as fund managers seek efficient access to the EU market. Cyprus offers a cost-effective, business-friendly alternative to larger hubs such as Luxembourg and Ireland, with high-quality professional services and lower operational costs.

The sector’s growth spans across a diversified range of fund types – UCITS, AIFs, AIFLNPs, and RAIFs – signifying broad appeal to international managers and investors. Notably, a substantial portion of funds is domestically domiciled: roughly 72% of total AuM comes from Cyprus-based UCIs, with close to 30% of assets invested within Cyprus itself, according to CySEC.

The country’s ambition is not to simply replicate the major EU fund centres, but to carve out a niche as a flexible, innovative funds jurisdiction – appealing to managers of alternative investment funds, private equity, real estate portfolios, and emerging asset classes like fintech and sustainable finance. With its combination of regulatory credibility, competitive cost base, and geographic reach, Cyprus is looking to expand its influence in Europe’s funds landscape.

Private Wealth Manager

As family offices and wealth managers worldwide increasingly turn to outsourcing and jurisdictional diversification to protect and grow client assets, Cyprus is aiming to capture a larger share of the international private wealth market.

Historically, the country’s private wealth sector has been closely linked to Russia and other Eastern European markets, serving as a base for ultra-high-net-worth (UHNW) and high-net-worth (HNW) clients for decades. However, the client mix has now diversified due to for example the ever-expanding sanctions following the Russian invasion of Ukraine, with growing inflows from the Middle East, Asia, and post-Brexit UK. This shift reflects both geopolitical realignment and Cyprus’ proactive outreach to new wealth corridors. With an extensive banking network and the availability of a variety of investment vehicles, a growing fund industry, as well as no taxation on capital gains or succession, Cyprus is a natural hub for wealth management firms and family offices.

A particular strength is Cyprus’ modern trust framework, which blends English trust principles with Cypriot law to create a flexible, internationally competitive structure. A Cyprus Trust can be tailored to a wide range of objectives, from asset protection to succession planning, and enjoys tax exemption on income earned outside Cyprus. This adaptability makes it a valuable tool for cross-border wealth planning, especially for clients with multi-jurisdictional footprints. With its evolving client base, supportive tax and legal environment, and strategic push into new geographies, Cyprus is positioning itself as a nimble, secure, and tax-efficient hub for private wealth management in a shifting global landscape.

Premier Forex and CFD Hub

Cyprus is one of the EU’s most important bases for international Foreign Exchange (forex) and Contract for Differences (CFD) brokerage, attracting a strong roster of global players. More than 40 firms from Europe, Asia, and beyond maintain headquarters or major operational offices on the island.

The island’s journey as a forex jurisdiction began early: in 1988, the Cyprus Securities and Exchange Commission (CySEC) issued its first forex brokerage licence to Windsor Brokers, making Cyprus the first EU country to formally regulate the forex market. The early adoption of clear MiFID-aligned rules and advanced IT and telecoms infrastructure supporting fast, secure online trading platforms, have been key to attracting international brokers.

The sector expanded further in the post-Brexit landscape, with many UK-licensed brokers seeking EU bases to retain passporting rights. This sparked M&A activity and market consolidation, as larger players absorbed smaller firms to strengthen their EU footprint. With decades of regulatory experience, a thriving professional services base, and a reputation for balancing innovation with investor protection, Cyprus is set to maintain its status as a global leader in retail and institutional forex brokerage.

Fintech Ignites Innovation and Growth

Cyprus’ fintech ecosystem is expanding at a remarkable pace, with hundreds of companies now operating across the full spectrum of the sector, from payments, regtech, and insurtech, to digital asset platforms and crypto exchanges. This growth reflects a maturing and diverse industry that has firmly established the island as a rising player in European fintech.

A key driver of this progress is the country’s commitment to building a supportive regulatory and business environment. In 2024, CySEC launched a new Regulatory Sandbox, replacing the earlier Innovation Hub. This initiative offers a controlled space for fintech and regtech innovators to test products under regulatory oversight, enabling them to refine solutions while safeguarding market integrity and investor protection. The sandbox complements Cyprus’ other advantages: a competitive 12.5% corporate tax rate, an extensive network of double tax treaties, and full access to the EU single market under regulations such as MiFID II, PSD2, and the upcoming MiCA framework for crypto assets.

Cyprus’ broader technology sector has also emerged as a powerful growth engine. According to the 2024 figures, the tech sector contributed 16% of Cyprus’ total Gross Value Added (GVA), a notable increase from 12.6% the previous year, and the overall economic impact of the sector is estimated at €8.5 billion.

This thriving ecosystem creates a fertile environment for fintech ventures, offering infrastructure, talent, and international connectivity. Cyprus has also positioned itself as an early mover in emerging finance models. It introduced national rules for investment-based crowdfunding in 2020 – well ahead of EU legislation – which now allow platforms to passport services across Europe under CySEC supervision. This forward-thinking approach has been matched by initiatives to attract international talent, such as the digital nomad visa launched in 2021. This scheme enables remote workers employed by foreign companies or operating as self-employed professionals to live and work in Cyprus for up to three years, further strengthening the island’s credentials as a Mediterranean digital hub.

Intellectual Property (IP) protection is another cornerstone of Cyprus’ appeal to ICT and tech companies. The island offers robust safeguards through domestic legislation aligned with EU standards and reinforced by international agreements. At the heart of its offering is the Cyprus IP Box regime, which grants an 80% deduction on income from qualifying intangible assets. This means that only 20% of such profits are taxed at the standard 12.5% corporate rate, resulting in an effective rate as low as 2.5% – one of the most competitive in Europe. Combined with a pro-business environment, this regime has positioned Cyprus as a rising hub for digital goods, software, and other IP-driven industries.

Together, these developments are helping Cyprus transform into a dynamic centre for fintech innovation, combining regulatory foresight, international market access, and a rapidly growing technology base to attract investment and talent from across the globe.

A Trusted Gateway for Global Business

From weathering crises to building a modern, diversified financial services ecosystem, Cyprus has proven its ability to adapt, reform, and innovate. Today, it offers more than just favourable taxes and strategic geography – it offers trust, transparency, and a platform for growth. Anchored by EU, eurozone, and Commonwealth membership, guided by English common law, and backed by world-class connectivity, Cyprus has transformed its regulatory framework to meet the highest international standards, and earning recognition for its robust anti-financial crime measures. While the island continues to draw inspiration from Europe’s most established finance centres, it is carving its own path as a niche leader, helping ambitious start-ups and mid-sized firms scale into global players. Positioned at the crossroads of Europe, Africa, and Asia, Cyprus stands as a safe, strategic, and sophisticated gateway for international business, one that is ready to grow alongside the companies that choose to call it home.

For more information, contact Cyprus' investment promotion agency, Invest Cyprus.

All rights reserved. The material on this site may not be reproduced, distributed, transmitted, cached, or otherwise used, except with the prior written permission of The Profiler Group.

August 2025