Insights | 18 December 2023 | Ministry of Energy, Commerce and Industry

George Papanastasiou , Minister of Energy, Commerce and Industry

Cyprus and the UK have a strong partnership in multiple areas, but which sectors are providing the most investment potential at the moment? How can Cyprus facilitate more business from the UK and make itself even more attractive to British investors?

Cyprus’ economy has shown great resilience and adaptability to the challenges of the times, and this has always served as a strong advantage with regard to attracting foreign investment. In fact, the island has been benefitting massively through its offering of an exceptionally complete package to investors, which includes EU and eurozone membership, an excellent regulatory structure, an attractive and transparent tax regime, strong business support services, ease and low cost of doing business and high standard of living, with ideal climate conditions.

In the past 30 years, Cyprus has experienced substantial growth, whilst also maintaining its competitive edge, by expanding key economic sectors such as tourism, shipping and financial services, which still hold great potential for the British business community, especially in the areas of hospitality, transportation, travel and insurance. The result has been a growing number of UK companies and investors expanding their operations in Cyprus, through participation in large-scale or infrastructure projects, corporate entities and various financial vehicles and schemes, including investment funds.

British entrepreneurs have also been using Cyprus as a base to expand internationally, thanks to the extrovert business environment, the Common Law system, the modern infrastructure, the high competencies and talent and the long-term economic growth orientation they can find on the island.

Additionally, Cyprus’ unique lifestyle and the ongoing efforts to overhaul and upgrade its infrastructure and regulatory framework, as well as to viably expand its economy, have allowed for new, emerging sectors, such as energy, ICT, higher education and wellness, to develop in a very short period of time. 

Cyprus is ranked among the EU’s strong innovators, performing above EU average for the second consecutive year, based on the latest European Innovation Scoreboard 2023. As a growing technology hub in the Eastern Mediterranean region, the country is already home to flagship international tech companies, which have chosen to make full use of the many competitive advantages, including the attractive IP regime. 

The Cyprus Government has launched a national strategy to transform the island into a regional hub for these fast-growing sectors, by attracting investors and human capital wishing to target markets in Europe, MENA and the Far East. In this context, the Business Facilitation Unit that operates at the Ministry of Energy, Commerce and Industry, serves as a dedicated point of single contact for foreign companies active or setting up on the island.

These are developments that present a great opportunity for both British and Cypriot interests due to the UK’s extended expertise in these fields. The British business community can choose to reach new markets either through collaboration with Cypriot entities or by establishing a base in Cyprus, whereas the two countries can utilise synergies and cooperate in the production of unique or high-end products for niche markets, such as pharmaceuticals, building materials and artisan foodstuff.

In any case, the UK is one of the most important economic partners for Cyprus and the biggest export market for Cypriot products. Overall, social, economic and political ties between the two countries run deep and even after Brexit, the UK and Cyprus have been cooperating very closely through their participation in the Commonwealth. A Double Taxation Agreement is also in effect and bilateral agreements are in place to ensure the continuation and advancement of our bilateral relations, for instance in 2022 the two countries signed an MoU for closer cooperation, inter alia, in climate change action, the economy and education.

Cooperation Partners
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