TechIsland backs Cyprus business reform with an eye on jobs and investment

TechIsland has welcomed the government’s decision to revise the registration framework for companies with foreign interests, saying the changes will help international businesses remain and expand in Cyprus, encourage further investment and support the development of local talent, while strengthening the country’s position as a technology and business destination. In a statement, TechIsland’s board of directors described the decision as “a significant and positive development that addresses important business needs” and creates “more favourable conditions for companies to maintain and expand their long-term presence in Cyprus, while supporting further investment and the development of local talent.” The decision, approved by the Council of Ministers on October 27, following a proposal by the Ministry of Energy, Commerce and Industry, introduces changes to the registration framework, placing greater emphasis on companies with substantial economic activity and a genuine contribution to the Cypriot economy. Under the revised arrangements, the Register of Companies with Foreign interests will be renamed the Business Support Center register, with the focus shifting towards actual economic activity, regardless of the origin of a company’s capital, particularly in high-value-added sectors. The government is also strengthening compliance controls and accountability, introducing a clear mechanism for removing companies that fail to meet the required criteria or fulfil their obligations. One of the main changes concerns the 70 per cent–30 per cent employment ratio, with compliance checks to be conducted seven years after each company’s registration. Importantly, this provision will also apply to businesses already registered. From January 1, 2027, companies will also be required to submit an annual employment report. The revised framework further allows companies to retain their registration and related benefits for existing and additional staff when their ultimate beneficial owners acquire Cypriot or other European citizenship, provided they continue operating in eligible sectors and meet the required conditions. For TechIsland, the decision comes after several years during which Cyprus has built strong momentum in attracting international companies, investment and expertise, with technology becoming an increasingly important part of the country’s economy. According to recent findings by FT Locations, presented at Invest Cyprus’ 20th anniversary event, the share of inbound greenfield foreign direct investment projects in Software and IT Services rose from 6 per cent in 2004 – 2011 to 43 per cent in 2018 – 2025. At the same time, Cyprus ranks first globally in ICT services exports as a percentage of total exports, while the technology sector now contributes approximately 16 per cent of the country’s GDP. These developments, TechIsland stressed, underline the importance of ensuring that companies which have already established themselves in Cyprus can continue operating, expanding and investing in the country. The association said that “the priority now is not only to continue attracting new investment, but also to sustain this momentum by ensuring that companies which have already chosen Cyprus can remain, grow and continue investing in the country over the long term.” This, it added, means “creating more jobs, transferring knowledge and expertise, and further strengthening the local technology ecosystem.” The government’s decision forms part of a broader revision of the Strategy for Attracting Businesses and Talent, which is currently under way and expected to be completed by December 2026. Applications for registration submitted from December 1, 2026, onwards will be assessed under the revised framework, with further details provided in the government’s updated registration guide. For its part, TechIsland said it “will continue to actively engage in dialogue with the State and support policies that foster a stable and competitive business environment, contributing to the sustainable growth of the technology sector and the wider Cypriot economy.”