In what ways has Cyprus strengthened its relationship with Japan, and which economic sectors provide the most investment potential at the moment? How can Cyprus facilitate more business from Japan and make itself even more attractive to Japanese investors?
Economic and trade ties between Cyprus and Japan have strengthened significantly in recent years, driven by targeted collaboration and strategic initiatives. A key milestone was the establishment of the Cyprus Trade Centre (CTC) in Tokyo in late 2022, which has been pivotal in fostering our bilateral business relations.
Trade between our nations has shown notable progress. Cyprus’ domestic exports of goods to Japan increased from €0.27 million in 2019 to €1.39 million in 2023, while exports of services increased from €39.9 million to €107 million during the same period. This substantial growth underscores the strengthening economic ties between the two countries and the increasing demand for Cypriot services, particularly in the maritime sector, where Cyprus holds a longstanding reputation as a global shipping hub.
Another decisive development in bilateral relations, also in 2022, was the establishment by MUFG Investor Services — part of Japan’s Mitsubishi UFJ Financial Group — of a major regional office in Limassol, to support its fund administration operations. This move enhances Cyprus’ appeal as a financial hub, emphasising its skilled workforce, professional services sector, and strategic EU location. Managing over US$1 trillion in assets, MUFG’s presence on the island also highlights Cyprus’ potential as a gateway for Japanese businesses looking to expand into European markets.
In April 2024, the first Cyprus-Japan Business Forum was held in Tokyo, which I had the pleasure to attend, alongside a delegation of ten Cypriot companies, mainly from the technology and shipping sectors. The Forum, which focused on the importance of artificial intelligence, cybersecurity and modernising technological infrastructure, attracted more than 120 Japanese delegates from the ICT and shipping sectors and facilitated over 30 business-to-business and government-to-government meetings. It highlighted Cyprus’ role as a technology and innovation destination, as well as the island’s advantages as an international business and shipping centre and a leading ship registry, calling on Japanese companies to leverage Cyprus for access to Europe.
Moreover, in October 2024, Cyprus and Japan signed a significant Memorandum of Cooperation in Kyoto, focusing on joint research and innovation projects, scientific exchanges, and collaboration in cutting-edge technologies. Undoubtedly, such initiatives have an important role to play in further solidifying our two countries’ commitment to long-term bilateral cooperation.
Beyond financial services, shipping, ICT, and the renewable energy sector in Cyprus present significant potential for investment from Japanese companies. Japan’s advanced electricity storage technologies align well with Cyprus’ need to modernise its electricity transmission network and utilise storage systems, creating new business opportunities.
Overall, strengthening direct connections between Cypriot and Japanese businesses is essential for deepening ties. Organising sector-specific delegations and encouraging Cypriot companies to also engage in European and Japanese-led initiatives will foster collaboration. Although Japan may seem geographically distant, taking proactive steps towards person-to-person and business-to-business interactions will reveal the true value of closer cooperation and unlock benefits for both economies.
Now is the time to move beyond traditional approaches and focus on building a dynamic, forward-looking partnership. Cyprus and Japan are well-positioned to lead the development of sustainable and innovative solutions, together.
With its strategic location, business-friendly policies, and commitment to strengthening bilateral ties, Cyprus is an ideal entry point for Japanese investors targeting Europe and the Middle East. Its competitive tax regime, EU membership, and supportive regulatory framework also make Cyprus especially attractive for Japanese companies looking to expand into Europe and beyond. We invite Japanese businesses to explore the opportunities in Cyprus and build partnerships focused on innovation and mutual growth.
