The high ranking underlines the country’s strong position as an investment-friendly destination, particularly for innovative companies and investors.
Cyprus records a notable performance in StartupBlink’s Innovators Business Environment Index 2026 (IBEI 2026), securing 15th place globally, 8th in Europe and 1st in Southern Europe, with the Cypriot business environment achieving the highest score in its subregion. The country’s key advantage, which contributes to these high rankings, is its favourable tax framework.
According to the index, Cyprus offers the most competitive tax conditions in Western Europe, acting as a strong magnet for investment, particularly in sectors such as technology, financial services and international corporate structures. The stability of the tax framework, combined with an extensive network of double taxation avoidance agreements, further enhances the country’s attractiveness as a regional business hub.
“Overall, Cyprus’ results reflect a business environment characterised by positively assessed tax conditions and business incentive frameworks,” the index commentary notes.
In the overall ranking, Europe has 10 countries in the global Top 20, more than any other geographical region, with Cyprus included not due to size but because of the quality of its business environment.
Performance breakdown
In detail, Cyprus ranks first in the European Union and 10th globally in taxation, and second in the EU and sixth worldwide in the business incentives pillar. Bulgaria ranks first in the EU in that category.
“The higher ranking of Cyprus in the IBEI 2026 compared with the Global Startup Ecosystem Index 2025 highlights the strength of its underlying business environment conditions relative to the actual performance of its startup ecosystem,” the study states.
At parameter level, Cyprus is placed in the top 25 per cent of the Index in criteria such as corporate tax rate, capital gains tax rate and dividend tax rate.
“The country’s location in the Mediterranean and its historical significance as a trade centre create an attractive base for entrepreneurs engaged in international activities. They benefit from consistent administrative and financial regulations within the European Union. In recent years, Cyprus has undergone a significant economic transformation. This shift has reshaped its image and established it as one of the most attractive business hubs in the region,” the commentary adds.
Key advantages identified by StartupBlink
In assessing what Cyprus offers, StartupBlink highlights:
- The corporate tax structure is among the most competitive in the EU. It provides businesses with clear long-term transparency and aligns well with companies serving both local and international markets.
- Additional measures facilitate compliance for smaller businesses, helping to create an organised and regulated environment for day-to-day operations.
- Personal taxation enhances the country’s attractiveness. The non-domiciled regime allows eligible residents to avoid certain taxes on dividends and interest, and has become a key tool for attracting globally mobile innovative entrepreneurs and investors with international income sources.
- The Startup Visa programme strengthens this strategy. It provides entrepreneurs from outside the EU and the European Economic Area, namely Iceland, Liechtenstein and Norway, with a clear structure for establishing technology-focused businesses and supports Cyprus’ goal of developing knowledge-based industries.
- Institutional support reinforces this trajectory. The Research and Innovation Foundation (RIF) manages initiatives that encourage scientific and commercial efforts. Invest Cyprus acts as the primary liaison for international investors, offering support during establishment and growth phases.
About the index
The Innovators Business Environment Index (IBEI) 2026 is a global index assessing how business-friendly each country’s environment is for innovative companies and entrepreneurs. It is published by StartupBlink, an international research and mapping platform for startup ecosystems that monitors innovation performance in more than 125 countries. The index uses over 30 measurable, parametric criteria to compare national business environments.