Cyprus continues to enjoy strong investor confidence, with 83% of respondents in the latest EY Attractiveness Survey describing the island as an attractive destination for foreign direct investment (FDI).
The findings were presented at the EY Cyprus forum, "Cyprus Future Realized: Bridge. Accelerate. Grow", where participants discussed the outlook for the Cypriot economy amid increasing geopolitical and economic uncertainty.
Strong appetite for expansion
The positive sentiment is also reflected in investors' plans.
According to the survey:
- 62% intend to expand their operations in Cyprus within the next 12 months.
- 29% expect to maintain their current level of activity.
- Among investors not yet present in Cyprus, 50% said they are considering establishing a presence on the island.
- 60% believe Cyprus' attractiveness for foreign investment will improve further over the next three years.
What investors like about Cyprus
The country's tax regime remains its strongest selling point, receiving positive ratings from 90% of survey participants.
Other factors contributing to Cyprus' appeal include:
- Quality of life.
- Political and social stability.
- Membership of the European Union.
- Quality of professional services.
- The legal system.
Key weaknesses identified
Despite the positive overall picture, investors highlighted several areas of concern.
For the first time, energy costs emerged as one of the most significant weaknesses, with 50% of respondents identifying them as a major issue.
Other challenges include:
- Access to financing.
- Bureaucracy.
- Connectivity with international markets.
- Availability of specialised talent.
Geopolitical tensions top risk list
When asked about threats to Cyprus' future attractiveness, 74% of investors pointed to geopolitical tensions as the biggest concern.
Other risks identified were:
- Limited international connectivity.
- Reputational issues.
- Increased regulatory burdens.
- Labour market shortages.
- Energy price volatility.
Survey presenters noted that investors view Cyprus' geographical position in two ways: as a source of exposure to regional instability, but also as an opportunity due to its location as the closest EU territory to several regional markets.
Technology and skills in demand
Investors also highlighted the need for greater support in technology and artificial intelligence.
According to the survey:
- 62% want stronger technology and AI infrastructure.
- 59% seek greater government support.
- 56% want improved skills and expertise in these sectors.
- 53% identified workforce availability as a major constraint.
Real estate and tourism remain growth drivers
Investors continue to see future growth coming from traditional sectors of the Cypriot economy.
The sectors considered most promising were:
- Real estate and construction.
- Tourism and leisure.
- Information and communications technology.
- Financial services.
ESG remains important
Sustainability continues to influence investment decisions.
The survey found that 68% of respondents still take ESG criteria into account when shaping investment strategies.
Key priorities included:
- Greater use of renewable energy.
- Financing for sustainable projects.
- Supportive regulatory frameworks.
Banking frustrations continue
Within the banking sector, investors identified onboarding and KYC (Know Your Customer) procedures as their main concern.
Other issues included:
- Transaction processing speed.
- Access to financing.
- Quality of customer service.
Invest Cyprus: Investors want clarity and speed
Invest Cyprus CEO Marios Tannousis said the EY findings largely mirror the organisation's own research.
He noted that foreign investors often face the same challenges as local businesses but require clearer guidance because they are unfamiliar with the Cypriot environment.
According to Tannousis, investors are primarily looking for:
- Clear procedures.
- Predictable timelines.
- Faster licensing processes.
- Consistent communication with authorities.
He also stressed that foreign companies contribute capital, create highly skilled jobs, transfer expertise and increase Cyprus' international profile.
Tannousis revealed that Invest Cyprus recently held discussions with a major US company considering relocating the headquarters of an affiliated business to Cyprus, as well as a Silicon Valley firm exploring Cyprus as its base within the European Union.
Source: CNA
