The professional services sector remains one of the key pillars of the Cypriot economy, significantly contributing to its growth.

Limassol has emerged as the main hub for financial, legal, and technological services, attracting foreign investment and solidifying Cyprus’ position as a business centre in Europe and the Middle East.

Due to this, the city has been informally dubbed the economic capital of Cyprus, according to the Vice President of Services at the Limassol Chamber of Commerce and Industry, Elias Neocleous.

Speaking to “Entrepreneurial Limassol,” the chamber’s monthly briefing, Neocleous stated that the emergence of new sectors such as financial technology (FinTech), legal technology (LegalTech), and regulatory technology (RegTech) presents opportunities for innovation and diversification.

However, he noted that the increasing need for digital transformation and intense international competition require businesses to adapt swiftly.

“Strict regulations, such as those concerning cybersecurity and data protection, make continuous training and investment in new technologies essential,” he said.

Neocleous highlighted that service providers in Limassol are uniquely positioned to capitalise on significant growth prospects, provided they continue evolving and adopting modern, innovative practices.

Limassol, he explained, encompasses a wide range of business activities across financial, legal, accounting, maritime, consulting, technological, and professional services.

It also hosts leading companies in information technology, tourism, real estate, and education, making it one of the island’s primary business centres.

While all Cypriot cities are developing in line with the economy’s evolution, Neocleous pointed out that Limassol has distinct advantages that enhance the expansion of the services sector.

“Limassol has always been an outward-looking city. Its coastal location and hospitality have always been its trademark. Additionally, it has historically provided support to our fellow citizens, as seen after the Turkish invasion. Its unique cultural character has further developed, continuing to attract companies from Cyprus and abroad,” he said.

“Due to its dynamism, Limassol can now be considered the business capital of the Eastern Mediterranean,” he added.

However, despite the city’s strengths, challenges persist for the services sector. The impact of sanctions due to the war in Ukraine has undoubtedly affected businesses, with many service providers needing to seek new markets and products to maintain their viability.

“We cannot ignore the effects of these external factors, which particularly impact a small economy like Cyprus,” Neocleous said.

Nonetheless, he expressed optimism about the sector’s prospects, highlighting Cyprus’ strong international relations and ongoing investments in digitalisation and technology.

Regarding the introduction of a 15 per cent corporate tax for large multinational companies, Neocleous stated that its impact would depend on how it is implemented.

He stressed that it should be integrated in a way that allows Cyprus to remain a tax-attractive destination and continue to attract companies rather than deter them.

Although the world is in a digital era, the success of the services sector still relies on delivering high-quality service, Neocleous said.

“Companies that invest in technological tools, such as artificial intelligence and data analytics, can significantly improve their efficiency through process automation,” he explained.

He predicted that technological advancements would establish these tools as the standard operating model for businesses looking to expand further.

Additionally, he emphasised that the globalisation of service provision has reshaped the industry’s operational model, fostering cross-border collaborations.

“Cyprus, due to its high level of professional expertise and the tax incentives it offers, can become a magnet for businesses from the Middle East, India, and China,” he stated.

The briefing also underlined that the Limassol Chamber of Commerce and Industry actively supports businesses in the services sector by providing strategic guidance, training programmes, and access to networking opportunities.

It also serves as a mediator between businesses and government authorities, facilitating access to national and European funding programmes.

Neocleous also pointed out that sustainability and social responsibility are key to business success.

“Companies that incorporate these values not only attract clients but also contribute to creating a better business and social environment,” he concluded.