Cyprus government revises strategy to attracting foreign businesses

Finance Minister Makis Keravnos on Wednesday announced that the Cabinet has approved the revision of the strategic plan aimed at attracting foreign businesses to Cyprus.

The revised strategy, according to Keravnos, is designed to further increase the presence of these enterprises in Cyprus, underlining their role in creating new job opportunities, bringing technological expertise, and adding significant value to the Cypriot economy.

“Recognising the significance of this strategy, a thorough review has been conducted to enhance its effectiveness,” the Finance Minister said, noting that the Cabinet has greenlit new measures as part of this revised approach.

Moreover, Keravnos said that the newly incorporated actions, to be implemented by the relevant ministries, include a reconsideration of the duration of residence permits for these companies, when certain conditions change.

In addition, he said that the implementation of the Blue Card directive, which relates to the entry and residence requirements for third-country nationals, is also part of the plan.

He also said that there will be a push for the issuance of entry visas for business travellers (visa card business), which allows the government to better meet the educational needs of the children of foreign workers in Cyprus.

Another significant aspect of the strategy is the introduction of a new section aimed at addressing housing issues faced by foreign companies.

Keravnos noted that this section is related to new housing incentives such as build-to-rent schemes and the review of certain urban development incentives.

The Finance Minister expressed optimism that these measures would contribute to making Cyprus an even more attractive destination for foreign businesses and investors.

Government gives green light to National Development Agency and Cyprus Equity Fund

Meanwhile, the Finance Minister also announced the establishment of a National Development Agency, which is expected to provide a boost to Cyprus’ startup and business ecosystem.

This agency, in conjunction with the previously announced Cyprus Equity Fund, aims to address funding gaps observed in the financing of small and medium-sized enterprises (SMEs) and startups.

“The National Development Agency is a response to the identified funding gaps for SMEs and startups, as well as certain self-employed individuals,” the Finance Minister stated.

He added that the Cabinet has approved a study by a consulting firm to establish the agency, define its activities, and determine the tools it will employ “to assist small and medium-sized enterprises”.

The final proposal for the National Development Agency is expected to be submitted for Cabinet approval in March.

In terms of the Cyprus Equity Fund, Minister Keravnos disclosed that the Cabinet has given the green light to this initiative.

The fund, with a total value of €37.5 million, is managed by the European Investment Fund of the European Investment Bank (EIB). Its operations are set to commence in the first quarter of 2024.

Minister Keravnos outlined that the state’s contribution amounts to €30 million, with the remaining funds sourced from private capital.

“The fund will primarily invest in innovative and emerging Cypriot businesses with the goal of addressing financing gaps in the Cypriot market due to the high investment risk associated with these emerging companies,” the Finance Minister said.

He added that the Republic of Cyprus has signed a financing agreement with the EIB, which is tasked with monitoring the fund’s operations.