“The key to attracting a substantial number of multinational technology companies lies in the government’s creation of an attractive package of incentives, skilfully promoted by Invest Cyprus in coordination with the private sector and consultation with the government,” Tannousis told the Cyprus News Agency (CNA). In addition, Tannousis explained that the incentive package was complemented by the successful and effective operation of the Business Facilitation Unit of the Ministry of Energy. He noted that this unit facilitates the quick processing of the company registration process and ensures the swift acquisition of work permits for the company’s personnel, along with other significant steps required for the company to operate in Cyprus.

Meanwhile, Demetris Nisiotis, President of the Cyprus Information Technology Association (CITEA), identified two key reasons for the sector’s rise. These include the initiative launched through Invest Cyprus attracting technology companies, and the global development in the technology sector, particularly evident after the Covid-19 pandemic. Nisiotis told CNA that, “especially after the Covid-19 pandemic, which is considered a pivotal point, this began to be recorded in Cyprus as well.” Nisiotis sees further potential in the sector due to government investments in digitisation through the Recovery and Resilience Plan, aligning with the European Union’s emphasis on digitisation and the green transition to enhance the resilience of the European economy. To maintain the sector’s momentum, Tannousis stressed the importance of an efficient operating environment for international technology companies. He added, “It is important for international technology companies and other companies that invest in Cyprus to be able to operate in an efficient environment without complexities”.

Tannousis underlined that the government and Invest Cyprus organise Round Table discussions between foreign investors and the President of the Republic, along with ministers and deputy ministers, to address challenges and enhance the investment environment. He highlighted that through this dialogue, “the investment environment of Cyprus is further improved and strengthened contributing to further economic development and the creation of new jobs employment through foreign direct investment”. Moreover, he pointed out that digitalisation is a crucial economic driver linked to the education sector, boosting productivity and economic growth.

Nisiotis, while optimistic about the sector’s momentum, emphasised the need to address the shortage of domestic talent with necessary skills through short-term measures like skill upgrading and re-skilling, as well as long-term efforts to promote the sector in schools and increase the percentage of students choosing IT or science.

The technology sector’s growth is backed by data provided by the Cyprus Statistical Service (CyStat), revealing an impressive average growth rate of 15 per cent for the ICT sector in the last decade. This places it at the forefront of development, surpassing other sectors such as catering and catering services (tourism) with a growth rate of 12.7 per cent, and administrative and support activities (including tourism-related activities) with an average growth rate of nearly 10 per cent. Regarding its contribution to the overall gross value added, the ICT sector secured the third position in 2022, accounting for 9.6 per cent, following wholesale and retail trade at 12.2 per cent (first place) and financial and insurance activities at 9.8 per cent (second place). Notably, in 2013, the sector’s share was only 4.3 per cent of the total gross value added, indicating significant diversification in the Cypriot economy since the 2013 crisis. In absolute terms, the ICT sector’s total contribution to gross value added in 2022 amounted to €2.33 billion, marking a remarkable percentage increase of 277 per cent over the decade. This substantial growth has been consistently recorded in the last three years, bolstered by incentives provided to ICT companies operating in Cyprus.

Finally, it should be noted that according to Statistical Service data for 2022, the top five sectors contributing to Cyprus’ GDP were wholesale and retail trade (almost €3 billion), financial and insurance activities (€2.4 billion), information technology and communication (€2.33 billion), real estate management (€2.09 billion), and professional, scientific, and technical activities (€2.07 billion).

Source: Cyprus Mail