Five experts on why Cyprus is a destination of preference for international tech companies

In recent years a large number of international tech companies have chosen to set up their headquarters or otherwise establish a presence in Cyprus.

Below, five experts explain the main reasons why so many overseas firms decide to relocate to Cyprus, express their views on the current state of the local tech scene, and share their opinions on the country's potential to become a major tech industry hub in the future.

Hassan Kamal

Head of Beirut & Nicosia, Murex

What are the main reasons why your company chose to set up in Cyprus?

In 2020, we decided to review our strategy and expand our Beirut operations to another destination to ensure business continuity. After conducting a detailed analysis, we chose Cyprus as this destination. It is a stable, safe and secure environment, and this played a huge role in our decision. The country has many other competitive advantages that attracted us, including (a) its proximity to Lebanon, which allows for an easy commute between Beirut and Nicosia, (b) the evolving tech business environment and (c) attractive incentives for both the company and our employees. Moreover, the fact that Cyprus’ time zone aligns with that of our Beirut, Dublin and Paris office locations makes it easy for Murex’s team members globally to collaborate closely on a daily basis.

As a company, we have established good working relationships with government institutions and public agencies. All this – in addition to the fact that the European and Mediterranean culture in Cyprus is very close to that of Lebanon and the Cypriot community is respectful, nice and welcoming – made the company’s and our Murexians’ integration much easier. The excellent working facilities in Nicosia made it a very attractive prospect and today, more than 170 Murexians are well-established in the capital and highly value the quality of life here.

What is your assessment of the local tech scene right now?

The tech environment in Cyprus is dynamic and rapidly evolving, with substantial opportunities for innovation, collaboration and business expansion that align perfectly with Murex’s needs and challenges. Cyprus has seen substantial growth in its tech industry, which is underpinned by a skilled educated workforce. The startup ecosystem is also thriving, supported by numerous incubators, accelerators and tech events that encourage innovation and collaboration, and this, too, makes Cyprus a really appealing hub for tech companies. And, last but not least, the Government actively supports the tech industry through favourable policies that have created a business-friendly environment. All these factors make us think that Cyprus is an ideal location for growth and success in the tech industry!

How do you view the island’s potential as a future tech industry hub?

Cyprus is becoming a sustainable regional business hub and a truly international business centre, attracting companies from all over the world to set up operations or headquarters. The island's strategic advantages are highly attractive to the tech sector. The vibrant ecosystem is aligned with both the strategic and operational needs of companies, while the country’s commitment to long-term strategic planning and the ambition to adapt to global trends and challenges are set out clearly in its “Vision 2035” plan, the aim of which is to establish Cyprus as one of the greatest places in the world to live, work and do business. This is very similar to Murex’s focus on long-term success through innovation, pushing limits and exploring new ideas to be at the forefront of technology in capital markets. The modern infrastructure, high standard of living and safe environment further enhance its appeal, while the focus on R&D activities ensures that companies can stay competitive in the market.

Alexey Gubarev

Co-Founder & Board Member, Palta, Co-Founder & Board Member, TechIsland

What are the main reasons why your company chose to set up in Cyprus?

Life circumstances led me to move to Cyprus in 2002. The transition was driven by the desire for a safer business environment and a higher quality of life. Over the years, Cyprus has not only provided that but has also become home to me and my family. The island attracts IT companies with its low taxes, strategic EU location and secure regulatory framework.

What is your assessment of the local tech scene right now?

Cyprus has made remarkable strides in its tech sector due to the emergence of startups, government support and organizations like TechIsland. As Cyprus continues to improve, it remains appealing to tech companies and professionals looking for a friendly business environment and a strategic location. However, to stay ahead, it needs to keep up with the fast-changing global tech world by constantly evolving and adapting.

How do you view the island’s potential as a future tech industry hub?

Development of the tech industry should be prioritized by the Government, TechIsland and all relevant parties. Currently, the ICT sector makes up approximately 15% of Cyprus’s GDP but its growth opportunities have not been fully realized. There is room for further expansion, potentially reaching around 25% of the economy.

Tanya Romanyukha

General Manager, TechIsland

What are the main reasons why your overseas companies choose to set up in Cyprus?

Cyprus is a well-established business centre and an emerging EU tech hub, acting as a gateway to markets in the Middle East and North Africa. The country offers a business-friendly legal framework, a favourable tax system and immigration policies that simplify the process for third-country nationals to obtain work and residence permits. Furthermore, Cyprus is renowned for its high quality of life, pleasant Mediterranean climate and welcoming culture. Additionally, major cities in Cyprus are marked by multiculturalism and a high level of English proficiency among residents, making it an attractive destination for international businesses.

What is your assessment of the local tech scene right now?

The tech sector in Cyprus is currently experiencing significant growth, outperforming all other sectors. Studies indicate that the tech industry’s contribution to the country's GDP is expected to reach 15% in 2023. In recent years, Cyprus has made substantial strides in attracting international tech firms and top-tier talent. A diverse tech ecosystem has emerged, featuring companies of various sizes and different sub-sectors such as fintech, video games, software development, healthtech, cleantech, cybersecurity, AI and machine learning, blockchain, VR/AR and adtech.

How do you view the island’s potential as a future tech industry hub?

Tech has the potential to become the largest sector of the Cypriot economy. However, there is still room for improvement as, despite significant progress, certain challenges remain. There is still a skills gap in the job market and tech companies are importing expertise from abroad while upskilling the local workforce. To support this approach, we must improve the lives of highly skilled individuals on the island by expanding capacity in English-language, internationally oriented schools, making affordable housing more accessible, and speeding up the implementation process of the EU Blue Card directive to improve talent mobility. Moreover, banks need to adapt to meet the needs of this flourishing tech ecosystem. Traditional local banks often struggle to understand tech companies' and startups' business models. The complex compliance environment, lengthy bank account opening procedures, and extensive pre-moderation of transactions can impede operational efficiency and growth.

Addressing these challenges is essential if Cyprus is to fully capitalize on its potential as a dynamic hub of technology and innovation.

Ugne Buraciene

Group CEO, payabl.

What are the main reasons why your company chose to set up in Cyprus?

payabl. selected Cyprus for its unique combination of business-friendly environment, skilled talent pool and strategic geographical location. Located at the crossroads of three continents, Europe, the Middle East and Africa, and firmly within the European Union, Cyprus offers companies like ours access to both highly developed and fast-growing markets.

What is your assessment of the local tech scene right now?

The Cypriot tech scene is evolving rapidly, with a surge in startups and innovative companies emerging in various sectors. The Government's efforts to support entrepreneurship and innovation are having an impact, as are the initiatives coming from the private sector. The tech scene in Cyprus is attracting more companies to set up and professionals to relocate. This was evident at the recent Reflect Festival, a tech conference that attracted over 8,000 people from across the region.

How do you view the island’s potential as a future tech industry hub?

Cyprus has a unique advantage as a tech hub due to its linguistic and cultural affinity with Europe, while also being geographically close to key markets in the Middle East and North Africa. I believe that with continued investment in infrastructure, education and innovation, Cyprus can establish itself as a major player on the global tech scene. We're excited to be a part of this journey and to contribute to the growth of the local tech ecosystem.

Patrik Wilkens

Vice President of Business Development, TheSoul Publishing

What are the main reasons why your company chose to set up in Cyprus?

TheSoul Publishing is a global company with its headquarters in Limassol.

Aside from the importance of being a part of a thriving European economic community, we wanted to establish an HQ in a location that would allow us to tap into a diverse talent pool across the globe. Cyprus’ central location allows us, as a digital-forward company, to attract talent from the wider European region as well as the Middle East, CIS and Africa. Plus, Cyprus is simply a beautiful place to live, work and raise a family in.

What is your assessment of the local tech scene right now?

We chose to establish our company’s headquarters in Cyprus as TheSoul is future-focused and recognizes Cyprus's incredible qualities and the additional potential it holds as a globally competitive technological hub.

How do you view the island’s potential as a future tech industry hub?

TheSoul prides itself on being ahead of the curve and firmly anticipates that, as Cyprus continues to attract more businesses to the island, there will be a positive feedback loop of investment. This will boost the economy and the country’s entire ecosystem, including education, cultural and social services, business, real estate and technological infrastructure. We believe that Cyprus has incredible potential to become a technological hub with significant importance on the global stage.

This article was first published in the first edition of MHV Group’s special publication MHV Moments. To view it, click here. To read the entire publication, click here.