Cyprus is aiming to drastically reposition itself as a world tech and innovation hub, with a strategic plan to additional diversify its financial system, bolster its native startup ecosystem, and entice funding from all around the world.
With nations from each area on the earth vying to do the identical, I visited 2025’s Replicate Competition in Limassol, Cyprus, to achieve perception into the nation’s plans to considerably enhance its financial system.
When visiting Limassol, it isn’t arduous to grasp why the town is a lovely place for potential companies, each within the monetary sector and past, to settle in. Other than the apparent way of life advantages, like residing proper by the coast with nice climate, there are additionally loads of optimistic business-based components.
However this hasn’t at all times been the case. In 2013, a critical financial disaster hit the island, ultimately resulting in anybody with greater than €100,000 in financial savings dropping cash as banks tried to outlive. Since then, Cyprus has come a great distance and has its sights set on reaching additional development.
Now, Andreas Papadopoulos, head of economic banking at Cypriot lender Hellenic Financial institution, says that Cyprus is in “the golden age” of its financial system. Whereas on stage at Replicate Competition, he defined simply how far it has come since 2013, utilizing Eurobank Group’s funding in Hellenic Financial institution for instance: “This was a money transaction of €1.3billion, displaying we now have one thing price wanting into and that our personal sector is strong. We’ve got sturdy banking infrastructure now, and excellent authorities finances surpluses.”
Cyprus’ tech sector contributed 16 per cent of the nation’s complete GVA in 2024, representing a 12.6 per cent enhance on 2023, based on KPMG Cyprus.
Stylianos Lambrou, co-founder and CEO of The Doers Firm and Replicate Competition, says that Limassol performs an enormous function on this development, calling it “the center of the tech sector” in Cyprus.
Overcoming Cypriot housing challenges
Whereas it’s clear that Cyprus boasts quite a few positives to construct on, its geographical location additionally positions it with a singular alternative. It sits in the course of Europe, the Center East, Asia and North Africa, with a beneficial timezone and historic connections that are beneficial for doing enterprise with these different markets.
However whereas Cyprus seems to determine itself as a gateway for world improvement, it should first overcome challenges nearer to residence. Talking to folks throughout each days of Replicate Competition, points surrounding a housing scarcity got here up a number of instances.
Lambrou defined that he believes that, whereas demand is rising for residential properties, there’s a important lack of provide, which isn’t rising wherever close to shortly sufficient. He urged the federal government to handle points that delay efforts to construct new properties and restore outdated ones, to drive development and create extra provide.
Whereas points stay, March 2025 noticed the federal government unveil a variety of initiatives in a transfer to enhance this housing state of affairs and make property extra inexpensive to lease and purchase.
Expertise and tax
With Cyprus so intent on bolstering its financial system, notably by means of its tech ecosystem, it faces one problem outstanding throughout the globe: a expertise scarcity. With the native startup scene quickly rising, Cyprus doesn’t have sufficient proficient people to fill newly created roles.
“Cyprus, for a few years, would lose a number of its most proficient youth to bigger nations for larger development and extra tech-oriented alternatives,” defined Antonis Polemitis, CEO on the College of Nicosia.
However Cyprus has additionally already taken steps to treatment the problem. The native authorities has launched its ‘mind acquire’ technique, finally hoping to persuade a proportion of the Cypriot group who stay overseas to return to the island, bringing their newly acquired expertise with them. Increasing on tax laws launched in 2022, it’s now rising tax exemption for returning Cypriots to 25 per cent on their first employment earnings, whereas opening up the necessities to allow Cypriots who’ve spent seven years away from the island, up from 15, to entry the advantages.
Irene Piki, Deputy Minister to the President of the Republic of Cyprus, broke down the significance of the technique, and why it had settled on making the eligibility embrace those that spent seven years overseas: “Seven years is an inexpensive timeline for folks to review overseas, work overseas, and construct up a great stage of expertise that they’ll carry again to Cyprus.”
Piki additionally careworn the significance of making a ‘smooth touchdown’ to additional entice this expertise to return residence, recognising the significance for folks to have the ability to discover housing and education alternatives. “We’re making a platform the place they’ll discover all this info to assist create a smooth touchdown for them. We’re additionally contemplating different incentives relating to education, to additional ease the re-entry course of.”
Constructing on present success
As Cyprus seems to construct on the momentum it has created during the last 5 to 10 years, it has additionally set longer-term objectives to make sure it stays on observe. At Replicate, Demetris Skourides, Chief Scientist for Analysis, Innovation, and Know-how of the Republic of Cyprus, broke down how Cyprus might place itself as an AI hub for the area by leveraging its regulatory alignment with the EU. Whereas the world’s superpowers have been busy committing billions into AI improvement over the previous couple of years, he famous that, as soon as once more, Cyprus’ geographical location might contribute to creating it a pacesetter in its personal proper.
“We have to get to the purpose the place we join Cyprus to the remainder of the world, not as a result of we’re disconnected, however as a result of, if Cyprus builds a tech knowledge centre that helps startups, tech innovation corporations right here, these corporations, can profit from the MOUs or the federal government relationships we’re constructing with the UAE, Saudi, Israel, and different areas. In essence, it’s a possibility the place we glue Cyprus to the EU, whereas additionally glueing it to the GCC.”
The secret is collaboration
In the direction of the tip of the occasion, Papadopoulos took to the stage and urged extra native companies to start partnering with the native banks. “Banks gained’t at all times be out there to supply financing. Nevertheless, you should use us – even exploit us – as companions, to achieve insights, statistics, and concepts. If we can not finance you, we are able to accomplice with you. Something you do which provides worth to the nation, we wish to help you since you’re including worth to our enterprise in the long term.”
This sense of group and want to accomplice with each other was a transparent theme all through the complete occasion, highlighting the vibrancy of the Cypriot banking, tech and startup ecosystems. It’s clear to see precisely why Cyprus has such lofty ambitions, and the way it’s creating an atmosphere that’s serving to new and current corporations thrive.
