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Where to Invest in Cyprus? Top Sectors for Investment in 2024
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Cyprus offers unique advantages, making it an ideal platform for successful investments. A stable economic environment, favorable business climate, and attractive tax conditions create a solid foundation for capital growth, attracting an increasing number of international companies and individual investors. In recent years, Cyprus has shown impressive economic growth, positioning it as one of the most promising jurisdictions for investment.
In this article, we will explore the key sectors that contribute significantly to the country’s economy and offer high potential for investors.
Economic Growth Overview
Cyprus’s GDP growth over recent years highlights significant recovery and expansion:
2018: $25.60 billion
2019: $25.95 billion
2020: $25.01 billion (decrease due to the COVID-19 pandemic)
2021: $28.41 billion
2022: $28.44 billion
2023: $32.23 billion
The GDP growth from 2018 to 2023 indicates stable economic development, reflecting increased investments, improved external economic conditions, and internal consumption. These figures are a positive signal for potential investors, demonstrating economic resilience and prospects for further growth.
Top 7 Promising Investment Sectors in Cyprus
Gross Value Added (GVA) is a crucial component of Gross Domestic Product (GDP), reflecting the contribution of each sector to the economy. Let’s explore the sectors that have made the most significant contributions to Cyprus’s GVA.
1. Trade (11.4%)
The trade sector is the largest contributor to Cyprus’s GVA, accounting for 11.4% of the total. This sector encompasses a wide range of activities, from wholesale and retail trade to the export and import of various goods.
Cyprus’s strategic location at the crossroads of Europe, Asia, and Africa provides easy access to major international markets, fostering the development of logistics and distribution centers.
The domestic trade market also shows steady growth, driven by consistent demand from both locals and tourists.
Investments in this sector offer stable income and growth potential, making it attractive for investors.
2. Financial Services (10.2%)
Contributing 10.2% to the country’s GVA, the financial sector is a key pillar of Cyprus’s economy. Cyprus has established itself as an important international financial center, attracting investments in banking, insurance, asset management, and other financial services.
The island is a popular jurisdiction for the offices and branches of international insurance companies and funds. Investors in the insurance industry can expect stable returns due to the constant demand for insurance services from individuals and corporate clients.
Cyprus also offers a wide range of asset management services, housing many investment funds and capital management companies that provide high-quality financial services.
3. Information and Communication (9%)
Modern technology and information services play an increasingly significant role in Cyprus’s economy, contributing 9% to GVA. This rapidly growing sector offers excellent prospects for investors interested in IT companies, startups, and telecommunications projects.
In 2024, the Information and Communication Technology (ICT) sector in Cyprus continues to show substantial growth, reflecting the high demand for digital solutions and services.
Cyprus is also actively attracting international IT companies to set up offices and development centers, with favorable tax conditions, developed infrastructure, and government support making the island an attractive base for global tech firms.
4. Legal, Accounting, and Advertising Services (8.8%)
Legal, accounting, and advertising services contribute 8.8% to Cyprus’s overall GVA. This sector is in high demand among both local businesses and foreign investors choosing Cyprus as their business hub. In recent years, the number of new registered companies in Cyprus has ranged between 10,000 to 15,000 annually.
Investments in legal, accounting, and advertising services provide high profitability due to the ongoing need for professional services.
5. Real Estate (8.6%)
The real estate sector is one of the most attractive for investments in Cyprus. The rising property prices, demand for rentals and purchases, and favorable conditions for investors make this sector particularly profitable.
Experts believe that Cyprus will maintain its leading position in the European market in the coming years due to its attractiveness and potential.
According to Eurostat, Cyprus ranked first in the EU for real estate sales growth in 2023, with a 31% increase, indicating high market activity and sustained interest in property investments on the island.
Property prices continue to rise steadily, as confirmed by the Royal Institution of Chartered Surveyors (RICS) Cyprus branch. In the first quarter of 2024, the average property price in Cyprus increased by about 10%.
The return on investment in residential and commercial real estate in Cyprus is 7-10% annually, making this market both attractive and promising for stable income.
6. Construction (6%)
The construction sector in Cyprus is highly attractive for investments, contributing 6% to GVA. High demand for real estate and infrastructure projects drives this sector’s growth, making it promising for investors. The construction boom on the island is supported by local interest and significant foreign interest from those choosing Cyprus for living and business.
Investors are actively investing in large projects and private homes in Cyprus, benefiting from various perspectives. Large projects offer broad profit opportunities due to high demand for modern residential and commercial spaces, while private home construction appeals to those valuing individual housing approaches, offering comfort and unique designs.
This demand supports the construction industry’s active development and provides investors with a wide range of promising investment opportunities.
7. Hotels and Restaurants (4.4%)
The hotel and restaurant sector accounts for 4.4% of Cyprus’s GVA. This sector is a vital part of Cyprus’s economy, given the country’s tourism focus. In 2023 alone, around 3.7 million tourists visited Cyprus, indicating significant growth. The high contribution percentage reflects the substantial number of tourists and active service sector related to tourism. The hotel and restaurant sector has growth potential, particularly with opportunities to attract new tourists and enhance service levels.
Cyprus offers a diverse range of investment opportunities across various sectors, including trade, financial services, information technology, and real estate, each offering unique prospects for profitable investments.
Discuss your ideas with our experts today and start realizing your investment plans in Cyprus!
Investing in Cyprus offers numerous significant benefits: access to the European market, high levels of legal protection, low tax rates, diverse investment opportunities, developed infrastructure, and a stable economy. These factors make Cyprus an attractive choice for strategic capital placement and business development.
Tax Incentives and Double Taxation Agreements
Cyprus provides attractive tax conditions for foreign investors, including low corporate tax rates (12.5%), exemption from dividend tax, and low personal income tax rates. A network of double taxation agreements covering over 70 countries also facilitates investment.
Regulation and Investor Protection
Cypriot legislation offers a high level of investor rights protection. European legislation, integrated into the national legal system, ensures transparency and fairness in the business environment. Investors can rely on international standards to protect their interests.
Investment Immigration Programs
Cyprus’s Permanent Residency by Investment program also attracts investors. Investing in real estate or business from €300,000 grants permanent residency and eventual citizenship, providing access to the European market and freedom of movement within the EU.
Join the successful investors who have already recognized the advantages of the Cypriot market and made it part of their capital diversification strategy.
Elena Georghiou – Founder and Managing Director of Feod Group. Has two higher educations: the first at the Odessa State Polytechnic University, majoring in automation and computer engineering (1986) and second in the Moscow State Law Academy, majoring in law (1991). Has work experience in London i...
Elena Georghiou – Founder and Managing Director of Feod Group. Has two higher educations: the first at the Odessa State Polytechnic University, majoring in automation and computer engineering (1986) and second in the Moscow State Law Academy, majoring in law (1991). Has work experience in London immigration law firms. Is a regular participant in seminars and trainings on immigration, corporate and private law of the European Union. Elena Georghiou has more than 25 years of legal experience and heads the specialized Residency and Citizenship practice across European countries, UK and USA advising HNWIs and their families on:
immigration planning;
consultations on obtaining alternative (second) citizenship;
Residency and Citizenship by Investment;
business immigration;
preparation of appeals, working with complex immigration cases.
She advises individuals and corporate clients for wealth/business structuring and assets protection. Central to her Managerial role in the company she initiated and united high level lawyers and other top professionals around the word in order to provide Feod Group clients with bespoke level of legal and business services word wide, keeping the staff focused on the opportunities and challenges faced by each individual client. Speaks Russian, Ukrainian, English.
