For the first time, a comprehensive effort is underway to make the island a technology hub

Cyprus is framing a comprehensive, holistic policy to compete as a technology hub, Invest Cyprus chief executive George Campenellas told the Cyprus Mail in an interview.

“We need to make international ICT companies and their workers see beyond tax incentives and similar,” Campanellas insists. “We need to make them feel that Cyprus adds value in every respect as a choice of location.”

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InvestCyprus CEO George Campanellas

The potential benefit for Cyprus is immense, according Campanellas. “Each tech company that relocates here adds tens of millions of euros to the local economy. Certainly, this increases tax revenue, but it also means increased spending and consumption, it benefits the professional services industry, education, healthcare industry, etc. What’s more, having more international people living and working on the island contributes to the overall air-connectivity which currently is affected by tourism seasonality.”

Last September, EY was commissioned to make a comprehensive study on bringing new high-tech companies to Cyprus, Campanellas explains. The results of that project have been brought together with work from the Cyprus Economy and Competitiveness Council, itself at work on a 15-year plan for the Cyprus economy. This is an EU-funded project that will provide the next steps in making Cyprus more competitive.

Legislation and projects underway

Now Invest Cyprus and the government ministries are at work implementing the plan, which covers a vast range of projects from tax incentives, to improving the offer to skilled workers, to creating a project bank and support the development of differentiated projects addressing the needs of these companies.

“Invest Cyprus has three objectives: to attract more high-tech companies to Cyprus with new incentives, to support the existing companies to scale up their operations, make the best for their employees, and attract FDI to materialise new real estate projects,” Campanellas explains.

Make tech workers feel at home

It’s not just about money or incentives. It’s also about conditions for living and working here.

“Cyprus has to do much more in making tech workers feel at home. Holistic review of the immigration regime for highly skilled workers, including the amendment of the Blue Visa legislation, giving access to the local labour market to spouses of these workers and introducing a naturalisation path for the highly skilled workers, would definitely add to Cyprus attractiveness within Europe,” he says.

“We are proposing to establish a One-Stop-Shop for these workers at international ICT companies. The study has identified many of the sensitive points in this respect, and that is being incorporated in action plans at the ministries. We’re moving towards the target, and the sooner we get there, the better.”

A holistic approach includes education

Invest Cyprus is working with all of the major industry associations, including the Developers Association, the Association for Large Investment Projects, and other groups to create new demand for projects that are not yet on the market.

“These are necessary to help us attract new companies. So we expect from them to come up with new projects that include large-scale office spaces, corporate residences, projects that follow the trends that are at work in other countries. We are looking at differentiated demand for office space and residential properties in line with the needs of these international ICT companies and their employees.”

This is all part of the holistic approach, however.

It’s not about just promotion and investment attraction, but also about facilitating conditions for international ICT companies already established in Cyprus, consulting the government for changes on the FDI framework at the same time, and then going back to the local industry and explaining to them what Invest Cyprus anticipates are the future needs of the market.

Campanellas expects to be working closely with schools in Cyprus as well. “ICT companies are very concerned with finding good private education for their workers’ family. We are already working with a number of private schools on the island: You cannot get a company with 500 workers to decide to relocate if their children cannot go to school.”

Getting all the stakeholders in place

The EY study has helped make it possible to get all the stakeholders in place.

“If Cyprus is to be competitive in attracting international ICT companies, there has to be a coordinated effort by the competent ministries, the regulators, the local industry, and other actors in the economy. This is what happens in other countries, and, for the first time, Cyprus is taking the same kind of approach. As the plan for Cyprus 2035 shows, there is no time to waste.”