Sustainable growth and the contribution of highly specialized international companies
By Evgenios Evgeniou, Chairman Cyprus Investment Promotion Agency, Invest Cyprus
In recent years, the Cypriot economy has faced intense challenges as a result of a series of unpredictable external factors, such as the pandemic, the war in Ukraine and the rapid increase in inflation.
Although these conditions have affected the Cypriot economy, the combination of government policies, the adaptability of the private sector and the attraction of foreign investments initially limited the recession and now moved the focus on achieving sustainable growth. Indeed, just a few days ago the European Commission predicted Cyprus’ GDP growth of 3.2% in 2022. Although lower than earlier forecasts, this is still higher than the expected EU average. Despite this positive forecast, the international environment remains uncertain and unstable.
In this unprecedented setting, we should intensify our efforts to attract new businesses and investments to Cyprus, which will create new, highly specialized jobs and added value for our economy. For this effort to succeed, all the stakeholders involved, public and private, must work together.
The efforts by Invest Cyprus, the state body that promotes the country’s business and investment policy abroad, are fully aligned with the government’s strategy which aims at:
- Attracting highly specialized international companies and highly skilled employees, primarily in the technology sector
- Supporting foreign investment implementation processes in priority sectors for the economy, including those that relate to the green and digital transition
- Maintaining the country’s competitiveness as an international centre for the provision of high-level financial services, especially in relation to investment funds
In recent years, Cyprus has implemented a new strategy to attract foreign companies and talent. Invest Cyprus has adopted this since 2019 and it focuses mainly on high-tech, shipping, pharmaceutical, innovation and research and development companies. The effort so far has been successful, since through coordinated actions together with the private sector we have managed as a country to create a new and promising technology sector. This has all the necessary ingredients to develop further with the ambition in some years to become a self-sustaining ecosystem, which will be a destination of choice for international tech companies. The task is not easy as many European countries are claiming primacy in attracting tech companies and some countries are more advanced than us in this field.
However, at Invest Cyprus we are confident that the international entrepreneurship sectors will continue to grow in the coming years, enhancing specialization, creating new jobs, diversifying the education and labour fields, and boosting investment in new development projects. We need to remain focused on our goal, by implementing sound development policies and reforms so as to realize “Vision 2035” for the Cypriot economy and society, which is encapsulated in a simple but extremely meaningful proposition: “To make Cyprus the best place to live, work and do business”.
We recognize that improving the competitiveness and attractiveness of our country requires continuous monitoring of international developments, continuous review of the framework for attracting Foreign Direct Investments and the adoption of effective and targeted incentives. It also requires the implementation of necessary reforms, including those agreed in the Cyprus Recovery and Resilience Plan (RRP).
As the authority responsible for guiding and assisting international investors we listen to them and we note problems that arise during their investment journey. In close cooperation with ministries and other government agencies we try to solve them so as to improve the investor experience. We also focus on targeted international promotion activities and we seek an active presence in major financial centres and target-markets.
Recently, Invest Cyprus organized the 10th International Investment Awards. This year, awards went to seven international companies, which trusted Cyprus either for investment or as a base for their activities. These are companies with a worldwide presence whose annual turnover far exceeds the annual GDP of our country. And yet, they all praised Cyprus as a destination that covers their investment and development plans.
At Invest Cyprus, we recognize that there is considerable room for further improvement of our investment proposal. However, we are confident that with the support and cooperation of the relevant ministries and working together with the private sector, the collective effort to attract even more businesses and investments to Cyprus will be successful.