Stephanos Kassianides: Major reforms drive great expectations for Foreign Direct Investment

Stephanos Kassianides, General Manager of the International Business Banking Division and Banking Centre Network at Eurobank Cyprus, stresses the importance of foreign investment to the Cyprus economy and shares his thoughts on what needs to be done to keep on elevating the island’s business ecosystem. Eurobank Cyprus was a Gold Sponsor of the 11th Invest Cyprus International Investment Awards.

What motivated Eurobank Cyprus to become a sponsor of the Invest Cyprus International Investment Awards? To what extent have they contributed to the overall investment landscape in Cyprus?

Foreign investment is an important contributor to the Cyprus economy and plays a significant role in strengthening the country’s GDP. As a result of foreign investment, jobs have been created, many of which have been taken by Cypriots. Over the years, it has also created a business ecosystem, which provides high-level services across various sectors, through a well-educated, highly skilled, multilingual and tech-savvy workforce. Eurobank Cyprus has contributed – and will continue to contribute – to the overall foreign investment landscape in Cyprus, through the provision of our products and services to foreign investors, their companies and their personnel relocating to Cyprus, as well as through the sponsoring of events such as the Invest Cyprus International Investment Awards and other initiatives to support the attraction of new investors.

How has foreign investment in Cyprus changed over the last five years?

In the last few years, an increase has been observed in the number of international companies relocating their operations and staff to Cyprus, signalling a change to the island’s international business landscape. This intensified further last year, following geopolitical developments in other parts of the world. According to the Business Facilitation Unit managed by the Ministry of Energy, Commerce & Industry, more than 1,200 international companies relocated to Cyprus in 2022, along with 9,800 specialised members of staff. Investors have been particularly active in the medical, education and tourism sectors, in addition to the traditional real estate development sector. Increasingly important in recent years are the investments coming from high-tech service providers and software development companies. These investments benefit our country from both a financial perspective and as regards technical expertise.

From a policy standpoint, what changes would you like to see that would make Cyprus a more attractive destination for foreign companies?

The Government has introduced a new strategy for attracting foreign companies and skilled talent to Cyprus via a series of new incentives concerning residency, taxation and employment, as well as a fast, simple and streamlined procedure. The strategy mainly focuses on attracting high technology, shipping, pharmaceutical, innovation, and research and development companies. Improving the competitiveness and attractiveness of our country requires the continuous monitoring of global competition, the updating of our framework for Foreign Direct Investment (FDI) and the adoption of effective incentives. It also requires the introduction of essential reforms, including those related to Cyprus’ Recovery and Resilience plan, such as green taxation, the liberalisation of the electricity market, the application of energy efficiency measures and renovations in buildings, and the acceleration of electric mobility. Additional important reforms include the digitalisation of public services and the digital transformation of the courts system, as well as the promotion of digital education and skills. Upgrading the digital infrastructure and tools in schools, providing teachers with digital training and introducing upskilling/reskilling programmes for different target groups will also make a positive contribution. Finally, it is equally important to enable the digital health transition by modernising the IT systems of the National Health System and deploying cross border e-health services.

Are there any emerging sectors or niche markets in Cyprus that are currently garnering significant attention from investors? How is the banking sector adapting to these new trends?

In the last few years, a number of companies active in the Information & Communications Technology (ICT) sector, including major multinational companies, have relocated to Cyprus, contributing to Cyprus’ GDP and reinforcing the vision to transform Cyprus into a technology hub. The ICT sector alone is estimated to have contributed approximately €3 billion to the Cypriot economy in 2022, marking an increase of 58% year-on-year, allowing it to become more diversified and rely less on traditional sectors such as tourism and shipping, and consequently becoming more resilient. The banking sector in Cyprus is undergoing a digital transformation, aiming to improve efficiency and productivity, revamp the client journey and user experience and open up the horizon for new products and services. All this is necessary to ensure that it offers a personalised customer service, coupled with a strong digital offering in order to meet the increasing needs of ICT companies and their staff who live and work in Cyprus.

This interview first appeared in the July edition of GOLD magazine. Click here to view it.