Evgenios Evgeniou: International technology companies’ establishment in Cyprus has already benefited the economy

The Chairman of Invest Cyprus reveals that the organisation’s strategy is aligned with an action plan for economic growth and transformation while attracting high specialisation companies and talent is one of its priority pillars

Invest Cyprus plays an important role in attracting new companies and investment to Cyprus. Can you tell us more about when and why it was established?

Invest Cyprus was established in 2007. Our mandate is to promote Cyprus as a business and investment destination, to offer facilitation services to investors that consider investing and after care services to investors already here. We also make recommendations to the government on changes needed to improve the attractiveness of Cyprus as well as the investors’ experience.

To fulfill its mandate, Invest Cyprus works closely with ministries, local authorities, and private sector organisations.

What specific services and expertise does Invest Cyprus offer as part of the government’s new strategy to attract foreign companies and skilled workers to the country?

Attracting high specialisation companies and talent is one of the priority pillars for Invest Cyprus. We participate in specialised conferences, online events and we work in a targeted manner, including engaging international consultants, to source leads. We pitch to companies looking for a new base for their operations and if the pitch is successful, we sign a letter of intent with them. On that basis we support them in setting up in Cyprus working closely with the facilitation unit and other relevant government departments. Once here we continue to engage with these companies in the context of aftercare services to receive feedback on their experience and we make recommendations for improvement to the government. The small team at Invest Cyprus has extensive experience and expertise in engaging with foreign investors and a very good track record of converting leads to actual companies on the ground.

What are the organisation’s main goals for the next five years?

Our current three-year strategy that will be refreshed later this year focuses on three priority areas:

1. Attracting high-specialisation companies and talent in priority industries, including technology
2. Greenfield investments in renewable energy, digital infrastructure, health, education, and tourism
3. Attracting regulated financial companies, with a priority focus on fintech, investment funds, fund managers, and related providers.

Our strategy is aligned with the action plan for economic growth and transformation “Vision 2035” as well as the Resilience and Recovery plan. In fact, certain actions included in “Vision 2035” are assigned to Invest Cyprus. The strategy refresh that will take place later this year will aim to further improve this alignment.

What do you believe are some of the factors that make Cyprus an attractive destination for foreign companies?

Our country lies at the crossroads of three continents, making it a natural gateway to Europe, the Middle East, and Africa. In addition, Cyprus offers a business-friendly environment, an efficient and stable tax system, a flexible labor market and a common law system. Another advantage is the well-educated and skilled workforce, with a high percentage of university graduates and proficiency in several languages.

For companies relocating to Cyprus, the good quality of life, the safety families feel, the Mediterranean climate, the beautiful beaches, the rich cultural heritage, and the friendly welcoming people are equally important factors.

Finally, the stable political and economic environment and EU regulation are key advantages. Of course, there is always room for improvement and we should constantly be working towards becoming even more competitive in the global business landscape.

What are the economic advantages from establishing international technology companies in Cyprus?

The establishment of international technology companies in Cyprus has already resulted in several benefits for the economy, including:

• Job Creation: International technology companies generated thousands of high-quality jobs for skilled workers, both directly through their operations, as at least 30% of their employees must be Cypriots, and indirectly through the supply chain.
• Knowledge Transfer: The establishment of international technology companies has brought new skills, knowledge, and best practices to Cyprus, which help to boost productivity and competitiveness across the economy.
• Innovation: International tech companies are often at the forefront of innovation and can help drive technological advancements and improvements in the broader economy.
• Increased Investment: These companies can attract new, added value investment to Cyprus, both from the companies themselves and from their suppliers and partners.
• Export Opportunities: International tech companies can open up new export opportunities for Cyprus through the products and services they develop.

The number of foreign companies that relocated to Cyprus during 2022 increased by more than 50%, on an annual basis, while the total number of jobs created increased by almost 80%. The total impact on the economy was estimated at 3 billion euros.

What are some of the issues/problems you believe must be addressed in order for the country to become even more appealing to foreign investors and companies looking to establish their headquarters or offices here?

Given the international prospects for growth, the Cypriot economy is once again proving its resilience. Earlier this month, Fitch Ratings upgraded Cyprus’ rating to BBB from BBB-, with a stable outlook. Although this is a positive development, we must not forget that we are still a long way from becoming an A rated economy.

To make the country even more appealing, several challenges and areas for improvement must be addressed, such as the bureaucracy and red tape involved in setting up and operating a business in Cyprus. In addition, we need to invest more in infrastructure, including transportation networks, digital connectivity, and energy supply.

While Cyprus has a skilled workforce, there are gaps in certain areas, such as digital skills and entrepreneurship. The government, the education sector and businesses should focus on closing these gaps. We also need to increase investment in research and development to support innovation and the development of new technologies, products, and services.

Some of these will hopefully be addressed through specific actions outlined in the country’s Recovery and Resilience Plan and “Vision 2035”.