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International investors have shown sustained confidence in Cyprus’ economy and business ecosystem, recognizing the country as a stabilizing force in the region.
According to Dorita Yiannikou's article published in Kathimerini Cyprus in Greek, continuous upgrades by global credit rating agencies have further strengthened Cyprus’ appeal as a destination for foreign investment.
Since 2018, Cyprus has introduced incentives and cultivated a business-friendly environment, making it an investment hub for companies from around the world. Sources indicate that Cyprus’ strengthening relationship with the United States is also a critical factor in attracting international investors.
President Nikos Christodoulides has prioritized the U.S.-Cyprus relationship, viewing 2024 as a landmark year for bilateral cooperation and setting the stage for further milestones in 2025. While Cyprus’ economic outlook remains positive, local stakeholders stress that additional measures are needed to boost the island’s attractiveness to businesses and expedite approval for projects and enterprises.
Cyprus ranks third in attracting foreign direct investment (FDI) in post-pandemic recovery and is fifth globally in safety rankings. With economic growth outperforming the eurozone average, government forecasts predict around 3% growth through 2025. Industry insiders highlight that Cyprus offers a favorable legal framework based on English law, efficient procedures, and ongoing reforms, which have consistently drawn both established and prospective investors since 2016.
Recent ratings upgrades are among the key factors for foreign investment, according to economic authorities. These upgrades reflect long-term confidence in Cyprus as a viable destination for both financial and physical investment. In a notable milestone, European credit rating agency Scope Ratings recently upgraded Cyprus’ long-term credit rating to A- from BBB+, marking the nation’s first A-level rating.
Scope Ratings cites Cyprus’ improved fiscal outlook, resilient economic growth, and lower financial sector risks as factors in the upgrade. Projections from the agency indicate a fiscal surplus of 3.1% of GDP for 2024 and 3.0% in 2025, with an average surplus of 1.8% through 2029. According to the University of Cyprus’ Center for Economic Research, business confidence in professional services rose sharply in the third quarter of 2024, bolstered by robust public finance performance and declining debt-to-GDP ratios.
Eyes are now on Moody’s upcoming assessment, scheduled for Nov. 22, which will further influence investor sentiment on Cyprus’ economic trajectory.
The Association of Large Developments has advocated for the establishment of a Ministry of Development and Competitiveness, saying it could enhance Cyprus’ attractiveness to high-value investors. The proposed ministry would include a dedicated unit for strategic investments and a "One Stop Shop" to expedite processes, improve the business climate, and facilitate major development projects, the Association noted.
Significant projects, including marinas, golf courses, the casino, universities, medical centers, technology parks, and major tourism complexes, await final regulations under Cyprus’ Strategic Development Law, approved in summer 2023. The law aims to streamline approvals and is expected to be implemented by the end of the year. Key pending regulations include criteria for designating projects as strategic and defining the conditions under which a project manager will be assigned. These steps are anticipated to accelerate Cyprus’ development goals and further attract investment.
