Eurostat: Value added by foreign-controlled enterprises in Cyprus stood at 15.6% in 2021

Although, in a recent report, Eurostat revealed the influence of foreign enterprises' role in the Cyprus economy in 2021 was relatively low, newer numbers point toward the country's growing significance as an attractive destination for international investment and business expansion.

Released on Friday, 8 February, the report shed light on the role of foreign enterprises in the EU economy. In 2021, approximately 1.1% of the EU's market producer enterprises (companies producing goods and/or services for sale in the market, such as software), were foreign-controlled. Of these, more than half (59.4%) were under the control of entities from within the EU bloc, while 40.6% were from outside the EU.

While the report highlights the relatively low influence of foreign enterprises' role in the Cyprus economy, recent numbers point toward the growing significance of the country as an attractive destination for international investment and business expansion.

As also shown in the European Union's statistical office report, despite constituting a relatively small proportion, foreign-controlled enterprises exert significant influence on the EU economy, contributing to 22.5% of the total value added in the business producers market across the EU.

It's important to note that Eurostat defines foreign affiliates as "enterprises resident in one country and controlled by a unit resident in another," and enterprises in which a single foreign investor (or a group of investors acting together) owns, directly or indirectly, more than half of the voting shares.

Nonetheless, the data reveal that Cyprus ranks among the lowest in terms of the value added from foreign-controlled companies, with a 15.6% share, joined by France (14.7%) and Germany (16.7%). Conversely, Ireland (71.9%), Luxembourg (55.5%), and Slovakia (49.4%) recorded the highest values. For Cyprus specifically, the dataset shows the presence of 433 foreign-controlled enterprises, employing 24,175 individuals, and contributing approximately €2.4 billion to the economy.

It's worth juxtaposing the report with the more recent surge in headquartering activity in Cyprus. According to Invest Cyprus, for example, the country’s investment promotional agency, by the end of 2022, the impact of international ICT companies on the Cyprus economy surged by 40%, injecting over €3 billion into the economy. Additionally, the arrival of more than 50 international ICT companies has led to the creation of more than 1,000 new jobs.