Cyprus is currently perceived as a highly attractive FDI destination, with strong fundamentals and positive investor sentiment, the recently released EY Attractiveness Survey has revealed, while also noting that most investors also expect this attractiveness to improve even further.
More specefically, according to the report, 83% of surveyed investors consider Cyprus attractive for foreign direct investment (FDI) with 56% saying Cyprus is "definitely" attractive and 27% saying it is "fairly" attractive. While 13% remained neutral in their opinion, only 4% of those surveyed said Cyprus was "not really" attractive.
As also revealed in EY's survey, the top attractive factors were Cyprus' corporate taxation and tax regime (90%), quality of life (82%), stable political and social environment (65%), local labour skills level (58%) and growth potential (49%).
Less attractive factors were also mentioned, including energy costs (50%), access to financing and capital (38%), the bureaucratic and administrative environment (35%), the transport and logistics infrastructure (33%) and the availability of investment opportunities (31%)
When it comes to Investment Focus, the survey pinpointed four main areas of interest namely the sale of products and services (48%), R&D (21%), business support services (19%) and headquartering.
Also, according to the survey, the main potential risks to FDI attractiveness over the next three years are geopolitical tensions and conflicts (74%), low connectivity, adverse reputation, increased regulatory burden, (each with 29%), tight labor market conditions (27%) and volatile energy prices/supply issues (26%).
However, it is also worth noting that the survey found that 67% of investors plan to enter or expand their operations in Cyprus (up from 57% in 2024 and 29% in 2022), boding well for the island's future attractiveness.
In more detail, when it comes to expectations for FDI attractiveness over the next three years, 60% expect Cyprus’s FDI attractiveness to improve (9% significantly, 51% slightly), 24% expect it to stay the same, 6% expect it to slightly deteriorate, and 9% cannot say.
The sectors expected to drive growth, meanwhile, are listed as real estate, infrastructure, and construction (23%), tourism and leisure 914%), ICT and telecoms (also 14%), and payments and FinTech (11%).
