Cyprus: A hub for technology companies

International technology firms are one of the sectors of the Cypriot economy that kept expanding both during the pandemic and under the current, similarly unprecedented circumstances.

The updated framework for hiring specialized personnel from third countries contributes greatly to the overall effort, and as soon as the applicable framework was altered, organizations like Invest Cyprus (Cyprus Investment Promotion Agency) began a campaign in other markets to publicize the changes that Cyprus had encouraged. Companies from countries including Israel, Lebanon, the USA, the UK, Ukraine, Canada, Russia, and France have reacted to Invest Cyprus' initiatives in recent years. In fact, there are many positive signals, and some American businesses which are looking into locations in Europe are already considering Cyprus.

Since the year's commencement, 31 foreign businesses have expressed in writing their intent to Invest Cyprus to establish their headquarters here. The Cyprus Investment Promotion Organization stated, "We are in constant communication with them and already 11 of them have put their intention into practice, they are in the country, active and employing people."

It is no coincidence that businesses frequently announce either the beginning of their activities in Cyprus or the growth of their current operations, along with the Cyprus Investment Promotion Agency (Invest Cyprus). The developments themselves demonstrate the success of efforts to draw in foreign technology firms and establish a base and operational departments in Cyprus. This has led to the creation of thousands of new, specialized jobs in recent years, which have been filled by both Cypriots and foreigners from EU and non-EU countries.

The cases of businesses like Murex, Brain Rocket, and Sword, who moved forward with setting up a base in Cyprus in 2021 with the transfer of about 500 workers and the hiring of additional staff from the domestic labor market, are typical, according to data from Invest Cyprus. Examples from this year include the businesses Wrike, DataArt, TangoMe, IponWeb, and Jetbrains, which also moved 800 employees to Cyprus to create a presence there. Large international corporations with a permanent presence in Cyprus include NCR, Amdocs, Wargaming, Exness, 3CX, Nexters, EasyBrain, Soul Publishing, eToro, Palta, ASBIS, TSYS, and more recently, the MUFG ISFT.

The new plan unveiled by the government, which includes, among other significant tax benefits and a mechanism for quick licensing of third-country workers in particular industries and specialities , plays a crucial role in the continued attractiveness of Cyprus.

For the Cypriot economy, recent changes have produced a large multiplier benefit. A study conducted on behalf of Invest Cyprus confirms the advantages from the decline of these businesses. The sector's economic contribution in 2021 was 1.8 billion euros as opposed to 1.5 billion euros in 2020, and it is anticipated that this year's contribution will surpass 2.5 billion euros. The report estimates that in Cyprus, the ICT sector employed about 20,000 people in 2021. Given that 900 more jobs are produced in other sectors for every 500 workers in the sector, this figure is significant. Recently, the Ministry of Interior announced that in the first 9 months of 2022, the applications of technology companies for the transfer of specialized workers in Cyprus have increased by 9.000.

According to a recent report by FDI Intelligence, software and IT investments in Cyprus have impressively increased, hitting 600% in the first half of 2022 compared to 2019. In general, Cyprus ranks third among the Top 10 countries for post-pandemic investment recovery, with foreign direct investment increasing by 150% in the first half of 2022 compared to the same period in 2019. There are many advantages to Cyprus' sustained growth as a location for global technology firms. Along with the purely economic benefits, it also helps to diversify the country's economic structure, makes Cyprus a hub for the export of high-quality services and technology, and helps to reduce the trade deficit.

The sector's statistics show the draw to Cyprus of hundreds of highly compensated, skilled workers (who have needs for their own and their families' livelihoods), as well as the employment of many Cypriots who chose to follow the technology sector and whose employment options were primarily abroad until recently. More broadly, the so-called Tech Headquarters are beneficial to a variety of economic sectors. Professional services, real estate developments for both commercial and residential use, private education, health, entertainment, and transportation, among other things.

"The big bet is to create and develop the technology ecosystem in Cyprus to such an extent that it spreads knowledge and experiences, connects with Cypriot technology companies, schools, universities and develops into a self-sustaining ecosystem, which will develop its own innovative solutions and products, create new, highly specialized jobs and promote research and innovation by connecting business with higher education," according to Invest Cyprus.

"At Invest Cyprus we are optimistic that the descent of technology companies will continue in the coming years, enhancing specialization, creating new jobs and diversifying the educational and work mix, as well as boosting investments in new development projects. The development of this new sector is of crucial importance in the wider effort to achieve the "Vision 2035" for the Cypriot economy and society, which is encapsulated in a simple but particularly essential proposition: To make Cyprus the best place for any to live, work and do business," Evgenios Evgeniou, president of Invest Cyprus, said. 

By fLEXI tEAM