Government revises strategy to attract foreign business

The government is revising its strategy for attracting foreign businesses, while it also aims to establish a National Development Agency which along with the Equity Fund, will be tasked with filling any shortcomings observed in the financing of small and medium-sized enterprises (SMEs) and startups.

The news was announced by Finance Minister Makis Keravnos, who said the strategy to attract foreign investment companies to Cyprus has been revised – and approved by cabinet – to incorporate new actions that address issues such companies have been facing.

According to the minister, the Council of Ministers approved the revised strategy in a bid to boost the numbers and in extent lead to new jobs, expertise and significant added value for the Cyprus economy.

The new actions include a revision of the validity period for residence permits of these companies when certain data are changed, and the implementation of the blue card directive, which is related with the condition of entry and residence of third-country nationals. The revised strategy also promotes the issuance of entry visas for visitors with the purpose of travel (visa card business), as well as a new section with the provision of facilities to cover the educational needs of the children of foreign workers in Cyprus.

An additional section aims to deal with the housing problems faced by foreign companies, said Keravnos, and it is connected to the new build-to-rent housing incentives and the revision of some urban planning incentives.

Establishment of a National Development Agency

The FinMin also announced that a consultancy firm has been commissioned to conduct a study to lay out the activities and tools of the proposed National Development Agency, so that a relevant proposal can be submitted to the Council of Ministers for approval in March.

“The National Development Agency is the result of an observation that there are shortcomings when it comes to the financing of small and medium sized businesses and startups, as well as in some cases involving the self-employed,” said the minister.

Meanwhile, he added, the Council of Ministers has also approved the Cyprus Equity Fund, whose size is expected to be in the range of €37.5m and which will be managed by the European Investment Fund of the European Investment Bank (EIB). As Keravnos said, the Fund has been established and is expected to become operational in the first quarter of 2024.

The state’s contribution to the fund will be €30m, with the rest coming from private capital.

“The fund will invest mainly in startups and innovative Cypriot businesses, with the aim of covering the financing gaps that have been spotted in the Cypriot market, brought on by the high investment risk behind these startup companies,” said Keravnos. He saidthat the Republic of Cyprus has signed a funding agreement with the EIB.