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The investment scene in Cyprus is off to a strong start in 2025, with foreign investors showing increased enthusiasm for setting up businesses on the island.
According to an article written by Kathimerini's Dorita Yiannakou, data suggests a surge in registrations of foreign companies, positioning Cyprus as a gateway for expansion into European markets. The government’s efforts to make the country an even more attractive investment destination are paying off, and this trend is expected to continue in the coming months.
Corporate Tax Hike Unlikely to Deter Investors
Despite an upcoming corporate tax increase from 12.5% to 15% in early 2026, experts believe this will not slow down the influx of foreign businesses. In fact, the slight tax hike is seen as a strategic move to improve Cyprus’ international reputation, steering it away from its past image as a tax haven. Investors remain keen, particularly in sectors like technology, real estate, investment funds, and consulting.
A Surge in Foreign Company Registrations
Cyprus has welcomed 93 new foreign companies from January to March 11, 2025, marking a 20% increase compared to the same period in 2024. Last year, 77 foreign companies registered in the first quarter, while 200 companies were established in the first half of the year, creating 1,200 new jobs across various industries. If this trend continues, 2025 is on track to surpass previous records.
The Company Facilitation Unit (CU), which supports foreign businesses, notes that 2022 was the strongest year for foreign company registrations, with 1,605 companies established. In contrast, 2023 saw a drop, with only 286 companies setting up shop in Cyprus. However, 2024 showed a recovery, with 465 foreign businesses registering by the end of the year.
Top Investors: Where Are They Coming From?
So far in 2025, foreign investors from Israel, Ukraine, Russia, Lebanon, Belarus, and the UK have been the most active in Cyprus. There were also past efforts to attract companies from Brazil, following a historic Memorandum of Understanding (MoU) signed with the Brazilian state of Paraná. Authorities are now setting their sights on India and the USA, targeting sectors like energy, renewable energy, and software development.
Additionally, investment interest is growing in Saudi Arabia and Jordan, while Latin American countries were also courted in 2024 to explore Cyprus as a potential business hub.
Which Sectors Are Booming?
Technology and software development are leading the way in foreign investment. Notably, video game software companies have shown increased interest, along with investment funds, consulting firms, e-commerce businesses, and real estate ventures. The hospitality industry has also seen new players entering the market, further boosting Cyprus’ economy.
Rebranding Efforts to Attract More Investment
To enhance Cyprus’ appeal as a business-friendly hub, the government has enlisted the international communication firm KREAB for a major rebranding campaign. The goal is to reshape Cyprus' image in the global market, moving away from past controversies and positioning it as a credible and attractive investment center.
The campaign aims to draw investments into high-tech industries, innovation, research and development, energy, healthcare, education, shipping, finance, insurance, and fund management.
Bottom Line
Cyprus is experiencing an investment boom, with more foreign companies registering and creating jobs. Despite the looming corporate tax increase, investor confidence remains high. As the country rebrands itself, expands its international partnerships, and continues to support business growth, 2025 could be a record-breaking year for foreign investment.
