Cyprus & Israel: A shared commitment to regional peace, stability and prosperity

Cyprus today is a resilient, forward-looking economy and a gateway of opportunity at the crossroads of Europe, Asia and Africa. Our country has emerged as a reliable international business centre – dynamic, secure and ready to welcome innovation and investment. For Israeli corporations and business leaders exploring new frontiers, Cyprus offers a unique blend of advantages that make it an ideal destination for business expansion, corporate relocation and long-term partnership.

The Cypriot economy has demonstrated remarkable resilience and adaptability in the face of global challenges. Our GDP growth in 2024 stood among the highest in the eurozone, driven by a consistent focus on economic diversification, digital transformation and investment in human capital. We have embraced a development model that champions competitiveness, sustainability and openness – values that resonate strongly with our Vision 2035 strategy for sustainable growth.

Cyprus offers a pro-business environment that combines the benefits of European Union membership with the agility of a smaller jurisdiction. As part of the European Single Market and the eurozone, we provide direct access to more than 450 million consumers and a harmonised regulatory environment. Our legal system, rooted in English common law, offers transparency, legal certainty and familiarity for international investors. English is widely used in all professional and administrative contexts, further enhancing ease of doing business.

Tax and regulatory framework consistently ranked among most competitive in Europe

Our tax and regulatory framework are consistently ranked among the most competitive in Europe. We maintain one of the lowest corporate tax rates worldwide and offer additional incentives tailored to innovative enterprises such as intellectual property regimes, tax deductions for R&D expenditure and schemes to attract highly skilled international talent. Israeli investors can also benefit from Cyprus’ extensive tax treaty network, despite the fact that Cyprus and Israel have yet to conclude a Double Taxation Agreement.

Cyprus’ appeal as a business destination is further strengthened by the depth and diversity of its key growth sectors. Among the most dynamic is the technology and innovation sector, where Cyprus is rapidly emerging as a rising tech hub in the Eastern Mediterranean. Forward-looking policies and targeted incentives have fostered the development of a vibrant ecosystem of startups, accelerators and venture capital activity. During my recent visit to the United States, we observed first-hand the growing interest of leading American technology companies in Cyprus – particularly in areas such as research and development, digital infrastructure and emerging technologies. This interest underscores Cyprus’ progress in building an innovation-driven economy and reinforces our broader strategic objective of establishing Cyprus as a regional centre for technology and innovation – an ambition that we proudly share with Israel.

Strong shipping and maritime services

Another traditional strength of the Cypriot economy lies in its shipping and maritime services. Cyprus ranks among the top global jurisdictions in ship management and hosts the 10th largest merchant fleet globally. Our location near the Suez Canal and the Eastern Mediterranean energy corridors gives Cyprus strategic maritime significance. Our regulatory expertise, combined with a highly skilled maritime workforce and an advantageous tonnage tax system, has made Cyprus a natural home for dozens of leading international shipping companies.

Cyprus is increasingly recognised as a key energy player in the Eastern Mediterranean, with major infrastructure projects underway and strong interest from international energy companies such as ExxonMobil, Eni, TotalEnergies and Chevron. Key opportunities include the development of natural gas reserves within Cyprus’ Exclusive Economic Zone and the joint pursuit, with Israel and Egypt, of the Eastern Mediterranean Energy Corridor – aimed at transporting natural gas and, eventually, hydrogen and green energy. At the same time, Cyprus is advancing an LNG import terminal to support domestic power generation, enhance energy diversification and attract further investment in energy infrastructure. All these developments position Cyprus as a reliable and forward-looking energy hub – creating tangible opportunities for investors and contributing to regional energy security.

Tourism and hospitality also remain central to our economic offering. Cyprus welcomes millions of visitors each year, with Israel consistently ranking as one of our top tourist markets. The cultural closeness between our peoples, the short travel distance and the high quality of services make Cyprus an increasingly attractive destination for Israeli travellers. This has created new opportunities in real estate, hospitality, wellness and healthcare tourism – sectors in which Israeli investors and entrepreneurs are already making their mark.

The relationship between Cyprus and Israel is rooted in deep historical ties

The relationship between Cyprus and Israel is rooted in deep historical ties and strengthened by a shared commitment to regional peace, stability and prosperity. Our cooperation spans a wide spectrum – from energy and defence to academic exchange and high technology. Cypriot and Israeli companies are actively collaborating in sectors such as fintech, cybersecurity, agritech and healthtech. These partnerships are supported by a broader political understanding between our governments, which see each other as strategic allies in an increasingly complex geopolitical environment.

Today, Cyprus is proud to host a vibrant and growing Israeli business community. Leading Israeli companies – including fintech pioneers and investment firms – have chosen Cyprus as their European base, drawn by its strategic location, regulatory clarity and welcoming ecosystem. This growing presence is a testament to the confidence Israeli businesses already place in Cyprus and a signal of the greater potential that lies ahead.

Our Government remains committed to fostering an environment where businesses can thrive and where partnerships can deepen in ways that are mutually beneficial and forward-looking. We look forward to strengthening the already close relationship between our nations and to welcoming Israeli enterprises that wish to contribute to, and benefit from, Cyprus’ ongoing economic progress.

• Βy Nikos Christodoulides, President, Republic of Cyprus

This article was first published in the special publication Doing Business in Cyprus. To view it, click here. To read the entire publication, click here.