Press Releases

It is with great pleasure that I address the EY Attractiveness Forum 2024. Events like this, along with the EY Attractiveness Reports, serve as vital tools for governments and businesses alike. They provide deep insights into foreign direct investment trends and investor sentiment, helping us understand the evolving global landscape. By identifying key drivers of economic competitiveness and highlighting emerging opportunities, these initiatives empower us to formulate policies that attract investments, create jobs, and promote sustainable growth. Furthermore, they foster creative dialogue between the public and private sectors, thus creating a shared vision for progress. And, having had the opportunity to review an early summary of the 2024 EY report, I can assure you that its conclusions are taken into account in our strategic planning.

Dear friends,

Cyprus has been experiencing a steady and significant increase in Foreign Direct Investment. In 2023 alone, more than €3.5 billion were invested in the country. Key sectors such as ICT, professional services, renewable energy, agritech, tourism, light manufacturing, and education are presenting exciting opportunities for investors.

At the same time, we are pleased to observe increased diversification in the origins of these investments. Countries like the United Kingdom, the United States, Ireland, Israel, and Lebanon have notably expanded their participation, reflecting the growing international confidence in Cyprus as a prime investment destination.

Cyprus is also on a remarkable economic trajectory. In 2024 we are projected to achieve the third-highest growth rate in the eurozone, at 3.8%, while inflation is expected to decline to 2%, down from 3.5% last year. Our fiscal performance is equally robust, with a surplus forecast of around 4%. We have also achieved the European Union’s (EU) largest reduction in public debt between the first and second quarters of 2024, bringing it to 69% of GDP and our target is to reduce it below 60% of GDP by 2026.

A particularly significant milestone was reached when Moody’s upgraded Cyprus’ credit rating to A3 just two weeks ago, the highest level since 2011. The recent upgrades are a resounding vote of confidence in the government's policies and the resilience of our economy, and we feel proud of the upward trajectory of our economy. And this is happening amidst two wars —one of which is in our immediate neighbourhood— and while the economies of big traditionally strong EU member states face significant challenges. It is clear that responsible policies, rationality and fiscal responsibility deliver results.

The benefits, particularly from the recent upgrade, translate into tangible advantages for businesses and households, such as:

• Attracting high-quality investments that generate new, well-paying job opportunities, especially for the younger generation.
• Lower interest rates, as countries with strong credit ratings tend to enjoy more favourable borrowing terms.
• Enhanced economic stability, leading to greater job security and improved wages.

We remain focused on improving Cyprus’ investment and business environment. Our long-term strategy, Vision 2035, is a blueprint for sustainable economic growth. It emphasises attracting productive investments in the green and digital transitions, fostering a knowledge-based economy, and implementing structural reforms, and of course implementing each and every milestone of our national Recovery and Resilience Fund.

One of the primary challenges for Europe and Cyprus in attracting investments, as identified in your survey, is the growing regulatory burden. To address this, we are prioritising and advancing the digital transformation of our country, aiming to streamline processes and enhance our competitiveness. We are eliminating bureaucracy through digitalisation, enabling electronic submission of all applications, and saving time for businesses and citizens alike.

Cyprus has already seen remarkable progress in digital governance, achieving a 16.3% improvement, far exceeding the EU average. Tomorrow marks the launch of the new Digital Citizen mobile application, a new platform enabling the electronic issuance and secure storage of official documents such as ID cards and driver's licenses. This application represents a significant step towards streamlining administrative processes and enhancing convenience for our citizens. Similarly, we are strengthening our reputation as strong innovators, as highlighted by the European Innovation Scoreboard. This achievement reflects the significant potential of our research and innovation ecosystem, with Cyprus standing out as the only country in Southern Europe to attain this distinction.

As very correctly identified in your survey, energy costs remain a pressing challenge across Europe and a central focus for Cyprus. To tackle this, our energy policy is anchored in three strategic pillars: the introduction of natural gas, the expansion of renewable energy sources coupled with energy efficiency measures, and the establishment of electricity interconnections. These policies are designed to enhance energy security, promote sustainability, and lower costs for households and businesses.

Furthermore, early in 2025, we will be presenting a comprehensive expert’s tax reform proposal. The goal is to streamline our already competitive tax system and introduce incentives to attract both productive investments in target sectors and facilitate the green and digital transitions. At the same time, recognising the investment gap in Europe and particularly in Cyprus, we are facilitating access to financing for Cypriot businesses. Alongside a strengthened banking sector, which is now in a position to provide the necessary financing to Cypriot businesses, we have established tools like the Cyprus Entrepreneurship Fund and the Cyprus Equity Fund and we are progressing towards a National Development Agency to provide SMEs with favourable loans supporting innovative startups. These initiatives aim to address what is likely the foremost concern of investors today –high interest rates and tightening financial conditions– a challenge also highlighted in your survey’s results.

Earlier this year, we enhanced our Strategy for Attracting Companies and Talent, initially launched by the previous Administration in 2022. Key measures include simplified procedures for hiring high-skilled workers from non-EU countries, targeted tax incentives, and the further expansion of our Business Facilitation Unit, which ensures a seamless experience for companies operating in Cyprus.

We also introduced fast-track procedures for strategic investments, guaranteeing that permits, including urban planning and construction licenses, are issued within one year. These reforms are part of our broader effort to strengthen Cyprus as a hub for international and regional businesses.

We have also taken significant steps to combat financial crime and ensure compliance with international standards. Working with partners such as the US and the UK, we are improving mechanisms to counter illicit financing and enforce sanctions. We are also in the process of establishing in 2025 a Single Supervisory Authority for administrative service providers and a National Sanctions Implementation Unit to enhance transparency and accountability.

Last but not least, we are launching a dynamic re-branding campaign for Cyprus at the beginning of next year, aiming to enhance the country’s global image, attract high-value investments, and position Cyprus as a business hub of innovation, sustainability, and opportunity.

Dear friends,

Our government remains committed to fostering an environment of economic and social stability, strengthening Cyprus’ regional and international role, and advancing a future of progress and prosperity.

As we progress through these dynamic times, forums like today’s serve as invaluable platforms for collaboration and shared progress. Therefore, I thank EY for this very important initiative and look forward to working with you all to unlock new opportunities for Cyprus and beyond.

(RM/AP/MS)