Why Cyprus is Emerging as a Global Hub for Business & Innovation

Date: 12 Mar 2025

Karen Jones

Discover why Cyprus is attracting investors, entrepreneurs, and tech giants – offering security, opportunity, and strategic advantages.

Cyprus: A Gateway to Europe and Beyond

In an increasingly volatile geopolitical landscape, Cyprus is emerging as a well-positioned hub for businesses, investors, and high-net-worth individuals seeking stability, opportunity, and strategic advantages. Positioned between Europe, Israel, and the Middle East, the island offers a financial and legal framework primarily based on English common law, low tax policies, and a thriving tech ecosystem benefiting from its closeness to Israel. This position has also made it an attractive destination for companies setting up back-office operations from Lebanon, investors from India, and entrepreneurs seeking a secure base to access the European market. As global shifts in banking, taxation, and digital industries reshape business strategies, Cyprus stands out as a destination offering both security and growth potential. With its growing role as a fintech and innovation hub, the island is at the centre of a regional transformation which is also benefiting from its geographic location to Israel’s thriving tech sector which is 100bn dollars to Israels economy – 20% of its GDP.

Elias Neocleous, Managing Partner, Elias Neocleous & Co who runs the largest law firm in Cyprus and a leading firm in the South-East Mediterranean region, with offices found in Limassol shares his thoughts. “Cyprus has gained recognition as one of the fastest-growing startup ecosystems in the EU according to a recent study by the Research and Innovation Foundation (RIF), with significant progress in fintech, gaming, and deep tech sectors.” The Research and Innovation Foundation (RIF) is the national authority in charge of supporting and promoting research, technological development and innovation in Cyprus. “Government-backed funding programs, investment incentives, and talent attraction initiatives have created a good environment for startups to develop, secure investment, and scale internationally. Limassol has distinguished itself as a key startup city in Southern Europe according to the RIF research, reflecting Cyprus’ broader ambition to become a regional hub for research, innovation, and technology. This momentum underscores the country’s strategic vision and commitment to fostering entrepreneurship in an increasingly digital economy.” There is also the Enterprise Europe Network (EEN) Cyprus which helps businesses innovate and grow to international scale with access to EU funding opportunities with help to apply.

Strategic Positioning Meets Innovation

Neocleous continues, “The fact that Cyprus has very close ties to Israel which has a very developed tech industry with an outstanding international reach and success creates further interesting synergies.”  The South-East Mediterranean region covers countries such as are Turkey, Cyprus, Lebanon, Syria, Palestine, Israel, Jordan, Egypt, and Greece.  

Marios Souroullas, Director of Corporate Services and Team Leader Accounting team at Kendris Cyprus in Larnaca, a port city on the Southeast of Cyprus, discusses the tax benefits and improved credit rating. “Cyprus continues to be an attractive destination for wealthy individuals from around the world, thanks to its non-domiciled tax rules, relaxed lifestyle, and one of the lowest corporate tax rates in the European Union. In 2024, Cyprus was ranked as having the second-best tax policy based on the European Tax Policy Scorecard issued by Tax Foundation Europe. The country’s significant improvements in its credit rating have further strengthened its business environment, evidenced by an inflow of wealthy individuals moving themselves and their families to Cyprus. The Cyprus Holding company is still an attractive and flexible holding company in the European Union, and ongoing tax reforms aim to attract even more international business. Additionally, Cyprus boasts a long-time skilled workforce that helps these individuals in settling and thriving in the country.” Features of the Cyprus Holding company taxation feature includes a single rate of 12.5% of all worldwide income, one of the lowest corporate tax rates in the EU. In addition, in December 2024, Fitch Ratings upgraded Cyprus’ credit rating to A-, becoming the second agency in a brief period to assign an ‘A’ grade to the island nation. Fitch attributed this upgrade to the rapid reduction in public debt, strong fiscal performance, and a robust economic growth outlook. S&P Global Ratings also raised its long-term sovereign credit ratings on Cyprus to A-.

Hollywood Meets Cyprus: The Film Industry Boom

Marina Zevedeou, CEO, The Aspen Trust Group based in Nicosia, who is a Fellow Chartered Accountant of the ICAEW and who trained with PWC, London and a multiple award winner with Citywealth adds her view of developments in Cyprus, “A rising trend for 2025 is the rapid growth of the film industry. We are increasingly involved in supporting international production companies looking to film here. Our team takes care of everything from the initial budget application to securing up to 45% cash rebates, tax credits, and VAT refunds. We also help set up the structures needed to help production, ensuring full compliance with local laws and streamlining what can be a complex process. We are one of the leading companies providing these services, guiding clients through the entire process and making it easier for them to take advantage of the financial incentives Cyprus offers. This rising trend is exciting as it not only boosts the local economy but also creates new opportunities for the film industry in Cyprus.”  

Zevedeou shares some details on the film companies using Cyprus, “Last year, Netflix released its first movie filmed in Cyprus, Find Me Falling, starring Grammy winner Harry Connick Jr. Another film from the same producer, Apart From Her, also began shooting at the end of 2024. There are also TV Miniseries such as the Love Rat, IT show The Ex-Wife for season 2.”

Zevedeou continues, talking about tech “Yes, there are Israeli IT companies in Cyprus, but we also have several major international companies who have set up their global headquarters on the island, including Wargaming, a world-renowned video game developer, international software developer 3CX, and Viber. Global tech giants such as Microsoft, Oracle, and IBM have also kept a presence in Cyprus for many years. Tech Island is an organization that helps them in gaining direct access to the government and advocating for their benefits.”

The Future: Renewable Energy & Tech Expansion

Akis Papakyriacou, Managing Partner at Akis Papakyriacou LLC, who offers Legal and advisory services on corporate and finance, M&A, dispute resolution, renewable energy projects, real estate acquisitions and development, says he has been acting as the legal advisor of an AIF (Alternative Investment Fund) developing an 18MW (megawatt) wind farm in Cyprus. Also, as the legal advisor of a private investor with planned investments of Euro 100 million in renewable energy and as well, M&A transactions between a Cyprus and US company in the aviation engineering industry. He says that “A lot of companies, including some from Lebanon, are looking at Cyprus as a safe place to move their back-office operations, especially with the ongoing instability in the region. Cyprus offers a stable political environment, favourable tax policies, and easy access to the EU market, making it an attractive option for businesses wanting to ensure continuity and to reduce operational risk. The trend now is for tech companies, as well as companies in the renewable industry sector to expand to Cyprus, either through a relocation of their headquarters or by setting up subsidiaries and offices here in Cyprus.”

Marios Tannousis, CEO at Invest Cyprus which is a national arm of the government and who has more than twenty five years of international corporate experience, with twelve years in the international banking and financial services group Societe Generale adds a final view. “We are also seeing traction from India because of bilateral agreements approved for outbound investments and have enquiries from French entrepreneurs because of their link with Lebanon.” Tannousis is speaking at the Citywealth Forum in London on the 13th May 2025.

Cyprus is no longer just a picturesque island in the Mediterranean, it’s a dynamic hub for global business, tech innovation, and investment opportunities. With a strategic location bridging Europe, Israel, and the Middle East, it has become the go-to destination for startups, multinational corporations, and high-net-worth individuals. From a booming fintech ecosystem to a thriving film industry and renewable energy investments, Cyprus is shaping the future of business. As companies look for stability and growth in an unpredictable world, Cyprus stands out as a beacon of opportunity. The question is, are you or your clients ready to be part of its success story?

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