How would you describe the current bilateral relations between Israel and Cyprus?

The bilateral relationship between Israel and Cyprus is excellent and multifaceted as demonstrated by the ties in a wide range of sectors such as energy, tourism, real estate, general trade, healthcare, innovation, security and emergency response. It is a values-based alliance between two nations who share a vision for stability, democracy and prosperity. Both countries have common interests and face similar challenges that make these bonds even stronger. Israel is now one of the major trading partners of Cyprus. For 2021, bilateral trade surpassed €400 million showing a 50% increase compared to the previous year. Israel is currently the sixth largest exporter, while Cyprus also exports to Israel an ever-increasing amount. In 2021 total exports reached €90 million with a substantial 44% increase in domestic exports. 

What significant key projects are there between Israel and Cyprus at the moment, and what kind of projects or cooperation would you like to see developed in the future?

Energy and the discovery of natural gas deposits have been an important driving force in the rapprochement between the two countries. Both sides quickly understood that cooperation is needed in order for this resource to benefit the citizens of the two countries. However, it is not just natural gas. Renewable energy is another key area of interest for both countries, and we are very keen to connect Israeli technology with Cypriot counterparts for cooperation and establishing pilot projects in Cyprus. The idea is for new technology coming out of Israel to be ‘put to the test’ here and for Cyprus to become the testing ground for this new technology. Following an initiative we took earlier this year, an Israeli company is already discussing this potential with a Cypriot industry. When it comes to tourism and infrastructure projects, the Larnaca port and marina awarded to a Cyprus-Israel joint venture stands out. It is a one-billion-euro investment, the biggest ever made in Cyprus.

Israeli investors view Cyprus as a gateway and a good place to invest and do business in a variety of areas as noted previously. But cooperation can be developed in other areas as well. For example, climate change is very high on the agenda. Bilateral cooperation in the different fields of climate innovation, like water management, desalination, the prevention of water loss in urban water systems, smart and precise irrigation, energy storage, energy efficiency, nature-based solutions and the protection of the environment and nature is extremely important. This can be facilitated by more synergies and cooperation between the governments, the private sector and academia. The very good relationship between Israel and Cyprus and the mutual understanding of the risks climate change is creating in the region are an excellent vehicle to promote this cooperation.  

Cyprus has been a convenient base for many Israeli companies for decades, in your view what factors have contributed to the appeal of Cyprus as a base and business jurisdiction?

The proximity as well as the friendly relations have been important reasons for this. Other reasons that make Cyprus attractive for Israelis include EU membership, the ‘value for money’ factor, the professional and high level of services offered, the ease of doing business, the safety factor and the cultural similarities. Cyprus’ good relations with Arab countries have also played a role. Operating from Cyprus enabled Israeli companies to reach Arab markets. Cyprus is very keen to attract foreign direct investment and Israeli companies responded positively over the decades giving a vote of confidence to Cyprus. As long as Cyprus keeps the high standards set and continues to promote its professional services internationally, more foreign companies (including Israeli) will seek, I believe, to set up operations here and take advantage of the benefits and opportunities being offered.

What kind of new opportunities does Cyprus offer Israeli business or investment at the moment, and vice versa? 

As noted above, the strong activity by Israeli investors and businesses is solid proof that Cyprus offers numerous benefits and opportunities. The Abraham Accords have changed the dynamic. Israel today has direct access to many Arab countries. But, at the same time, those accords also provide Cyprus an opportunity to play a unique role in creating regional cooperation. Israel can put technologies, innovation and creativity on the table while Cyprus can put its EU membership and excellent professional services. Think of the scenario of joint ventures combining investments from the Gulf countries, technologies from Israel with companies being created and activity monitored from Cyprus. The increased regional stability brought about by the normalisation agreements provides the security atmosphere in which joint initiatives in a wide variety of fields such as health, environment, energy, infrastructure and more can succeed. Furthermore, Cyprus can play an important role with those countries that have not yet signed peace accords with Israel. And let us not forget that in addition to this, there is the trilateral cooperation with Greece which enhances even further the prospects. 

Israel has a strong start-up ecosystem and proven innovation in technology, how could this know-how be applied in Cyprus?

Innovation is one of the pillars for bilateral cooperation. Amdocs, that was founded in Israel, was one of the first technology companies to establish offices in Cyprus nearly twenty-five years ago. Of course, nowadays, many more companies from Israel from the wider technology sector have set up offices here. We want this to continue and grow in the future as well. 

Cyprus is very keen to learn from Israel’s experience and Israel very keen to share it. With the strong support and involvement of Deputy Minister of Research, Innovation and Digital Policy Kyriacos Kokkinos, the Chief Scientist & the Research and Innovation Foundation, the fields of research and innovation are opening new horizons. Last December, a Memorandum of Understanding on Scientific Cooperation between Cyprus and Israel was signed in Jerusalem. Conversations in order to launch the first Cypriot-Israeli program are already underway. Last year also, a very successful training program was organised (an embassy initiative) for the Cypriot innovation ecosystem while prominent figures from Israel (like Saul Singer, author of ‘Start Up Nation’) visited Cyprus for presentations and meetings, creating open channels between the two countries. We want to keep these channels open and even enlarge them. Israel is paving the way internationally in areas such as AI, cyber, smart mobility, fintech and many more. The idea of setting up pilot projects in Cyprus is a win-win. At the same time, interesting start-ups are emerging from Cyprus that could find their way into the Israeli ecosystem in the future. 

How do you see the relationship of the two countries developing in the future?

The future is brighter than ever. Let us keep an open mind and think big for the years to come. The key word for me is BILATERAL. So many tourists from Israel come to Cyprus for their holidays. Let us see more Cypriot tourists also visiting Israel in the future. Israeli investments are numerous here. How about Cypriot investments in Israel and Cypriot companies setting a foothold in the Israeli economy? What has been achieved so far should not be taken for granted. Hard efforts have been made by both sides to reach this point. Nevertheless, let us not rest on our laurels.  With the support of the business communities of both countries, I am confident much more can be done to both expand trade and investment and bring the two peoples even closer. 

July 2022