Newsroom
Cyprus has seen undeniable growth in foreign companies, and the economic benefits are clearly outweighing any potential downsides. The technology sector, for example, has contributed an impressive 6.95 billion euros to Cyprus’ Gross Value Added (GVA) in 2024. However, these foreign companies have faced criticism for the lack of Cypriot and EU workers in their employee base, with the majority of their staff coming from outside the European Union.
This, however, is about to change. According to Kathimerini's Panayiotis Rougalas, as part of a decision made in 2021, all foreign companies operating in Cyprus will be required to have at least 30% of their workforce made up of Cypriots or EU citizens by 1 January 2027. Although this goal was set back in 2021, it’s clear that more effort is needed to reach the target, especially with the rapid expansion of foreign ICT companies in the country. While some may have hoped this could be achieved overnight, it’s a long-term process that will require focused efforts on recruiting local talent.
The new strategy, which was approved by the Council of Ministers on 15 October 2021, aims to attract and expand foreign companies in Cyprus by offering more flexible employment practices. Under the new guidelines, companies were allowed to hire as many non-EU workers as needed without having to pass a labor market test. This was a shift from previous policies that imposed limits on foreign staff numbers. However, the strategy still mandates that, by 2027, foreign companies must meet the 70:30 ratio between non-EU and Cypriot/EU employees. If they fail to do so, they will be required to explain why.
This move is especially beneficial for Cypriot workers, as it will likely increase demand for skilled local talent, particularly in the lucrative IT sector. According to the Centre for Analysis and Strategies of Europe (CASE), Russians and Belarusians dominate the information and communication technology (ICT) sector in Cyprus, with salaries for these workers often exceeding €5,400 per month, far surpassing the average salary in the country. By early 2027, more Cypriots and EU citizens will have opportunities to join this high-paying sector, benefiting from these lucrative positions.
Additionally, the number of foreign companies registering in Cyprus has been steadily rising, with over 265 new registrations expected in 2024 alone. Companies from countries like the UK, Israel, Belarus, Lebanon, Ukraine, and Russia are flocking to Cyprus, signaling further growth in the economy and, hopefully, more job opportunities for local residents.
In short, Cyprus is gearing up for a future where its local workforce plays a much bigger role in the booming tech and foreign business sectors. While challenges remain, the push for a more balanced workforce is a step in the right direction for the country’s long-term economic health and job market.
