Incentives announced for investors in the Technology Park in Pentakomo

The Science and Technology Park in Pentakomo is expected to emerge as a catalyst for innovation and economic growth, creating an environment where businesses, research institutions and the academic sector can collaborate to promote knowledge-based development.

By enhancing synergies between stakeholders, the Science and Technology Park aims to create a dynamic and interconnected ecosystem, enabling the development, transfer and commercialisation of technology, while strengthening Cyprus' position as a regional hub for research and innovation.

As noted in the tender document announced by the Ministry of Energy, Trade and Industry to find a strategic investor, through a competitive process with negotiation, the project, which will offer integrated services, has been designed with the aim of facilitating business development, technology transfer and knowledge exchange.

These services aim to enhance the competitiveness of businesses, promote cross-sectoral cooperation and create conditions for sustainable innovation.

It is recalled that last May, the President of the Republic announced the creation of this important infrastructure for the technology sector, saying that the project would be announced along with a new strategic development framework and incentive package.

In this context, a complete package of incentives will be offered to the successful bidder/investor, and which are analysed in the relevant tender document, which has been announced by the Ministry of Energy.

It is recalled that the receipt of tender documents is carried out exclusively through the e-procurement system, while the deadline for submitting tenders is Friday, 12 September 2025.

Connecting industry, research and business

With Limassol hosting the majority of technology companies, and with the sector contributing almost 14% of the GDP, the creation of the Technology Park in Pentakomo takes on particular importance for the city.

The project is expected to be a point of interconnection between industry, research and entrepreneurship, bringing together startups, businesses, research centres and higher education institutions, contributing to cross-sectoral collaborations that promote groundbreaking innovations and support the commercialisation of research results.

Through targeted initiatives, it will foster a culture of open innovation, co-creation and knowledge sharing, ensuring that businesses benefit from access to know-how, infrastructure and strategic networks.

The Science and Technology Park will also be able to provide businesses with the appropriate conditions to develop, test and improve their innovations.

Businesses operating within the project must have access to research and development (R&D) capabilities, technology transfer mechanisms and specialised support services aimed at accelerating their growth and increasing their impact on the market.

The Park can also act as a gateway for businesses that wish to leverage international supply chains, facilitating international collaborations and access to new markets.

Beyond enhancing business development, the project is expected to play a key role in skills development and knowledge dissemination.

By working closely with universities and training institutions, it can help build a highly skilled workforce that is aligned with industry requirements.

The incentives package

As noted in the tender document, the government has committed to offering a comprehensive package of incentives to the successful bidder for the development and operation of the Science and Technology Park.

These incentives are designed to encourage investment, optimise administrative processes, and ensure the long-term sustainability of the project.

The package includes financial, tax, urban planning and operational incentives that operate within the framework of current legislation and policies.

Infrastructure support

To ensure that the Technology Park is a project ripe for investment, the government is able to provide funding and basic infrastructure, such as:

• Transport and utility networks: Construction of road networks, energy networks, water supply systems and perimetre fencing around the Park.
• Initial facility construction: Development of key administrative buildings to create a functional operational base.
• Additional infrastructure: Creation of pedestrian walkways, lighting systems, security infrastructure and an integrated water supply and irrigation system, as public use infrastructure.

Up to €10 million in support for the investor

An important pillar of the contract is financial support to the strategic investor for the development of the infrastructure.

It is clarified that this sponsorship will apply to investments made during the first five years, subject to compliance with the agreed-on development schedule. It is worth noting that the maximum sponsorship that can be given is limited to €10 million.

The design, financing, development and operation of the Science and Technology Park are expected to be shaped based on a European regulation related to financial support for research infrastructures, testing and experiment infrastructures and innovation clusters.

Under phase B, the successful tenderer may be required to submit full financial and technical documentation to enable verification of compliance with the relevant provisions, including the definition of eligible investment costs, the applicable aid ceilings, access and pricing conditions and accounting requirements.

Land lease agreement

The project will be developed using a land lease agreement with an initial term of 33 years, offering long-term stability to investors.

The agreement includes the possibility of renewal for two additional periods, ensuring continuity and allowing for sustainable development within the Technology Park.

It is also noted that any financial assistance provided under this framework will be deducted from the rent payable during the initial 33-year lease period, thus supporting the successful bidder in creating a project with competitive and sustainable operation.

The above incentives, it is added, have been strategically designed to enhance a dynamic and supportive business ecosystem, encouraging companies and organisations to consider relocating to Cyprus.

These measures aim to create an environment that is conducive to innovation, growth and collaboration, making Cyprus an attractive destination for businesses looking for a dynamic and innovative base.

Tax incentives

Under the Cyprus Intellectual Property (IP) tax regime, 80% of qualifying profits from intellectual property are exempt from taxation. This incentive aims to attract innovative businesses and encourage research and development activities.

Tax exemptions for employees

A 50% income tax exemption applies to employees with an annual income of over €55,000, provided that they have not been tax residents of Cyprus for the last ten years.

Employees with an annual income of less than €55,000 may qualify for a 20% income tax exemption (or up to €8,550), for seven years from the start of employment.

Urban planning incentives - Increased building rates

The building ratio for the Science and Technology Park is initially set at 0.40:1. However, adjustments may be considered under specific circumstances justified through the Park's feasibility study up to 0.45:1.

The maximum buildable area (total permitted buildable area) is limited to 65,000 sq m, including any other urban planning incentives and exemptions, with a balanced distribution between central operations and technological business units.

Adjustments to growth height

In special cases, the Planning Authority may allow certain buildings to exceed the maximum number of floors and height limits in order to meet strategic needs, provide architectural harmony and larger open spaces on the ground floor, provided that an unobstructed view of the sea is maintained.

Renewable energy sources and cost reduction

The government is committed to promoting green and sustainable development within the Science and Technology Park. Renewable energy incentives and initiatives are an integral part of achieving energy efficiency and reducing operating costs, while contributing to Cyprus' broader goals for sustainable development and energy independence.

Exclusive RES system

The strategic investor can install a rooftop RES system with a capacity of up to 5 MW for exclusive on-site consumption using the self-production method.

It is also noted that the investor can benefit from the renewable energy grant schemes, which support energy-efficient installations, provided that the installation meets the eligibility criteria of the schemes.

Green energy certification

Facilities within the Technology Park that adopt renewable energy systems can apply for green building certifications (e.g. LEED or BREEAM), strengthening their environmental credentials and attracting tenants focused on sustainability.

Improved visa and work permit incentives for investors and workers

Cyprus offers a range of incentives designed to attract highly skilled talent and facilitate seamless entry and residence for strategic investors, researchers and employees within the Technology Park.

Entrepreneurs from outside the EU who establish innovative, high-growth startups in the Technology Park can benefit from the Cyprus startup visa scheme.

Among the main benefits of this plan are residence and work rights for the entrepreneur and his family, the ability to hire additional non-EU nationals based on simplified procedures, and a three-year renewable visa with a fast-track procedure.

Work permits for third-country nationals

Workers hired for highly specialised positions (e.g. researchers, engineers) can obtain work permits through an expedited process.

Permits are valid for the entire duration of employment and can be renewed based on current contractual obligations.

Golden Knowledge Program

Highly skilled personnel employed in research, innovation or knowledge sectors may qualify for fast-track citizenship:

▪ 5 years of residence (with Greek language proficiency A2) or

▪ 4 years of residence (with Greek language proficiency B1).

Immediate family members, including spouses and dependent children, can also benefit from this program.

Permanent residency programs

The fast-track permanent residency program allows investors to obtain permanent residency by investing over €300,000 in new residential or commercial real estate and demonstrating sufficient annual income from abroad to maintain their residency.

Simplified employment for third-country nationals

High-demand jobs in sectors such as ICT, energy and nanotechnology will be prioritised under simplified employment procedures for third-country nationals.

Employers can benefit from an exemption from the quota for critical roles linked to the strategic objectives of the Science and Technology Park.

Temporary work visas for researchers and academics

Short-term research and collaboration projects will be supported by temporary visas, valid for up to one year.

Operational support

The government will ensure that all necessary permits to begin construction of the Park are obtained promptly, while minimising the usual administrative burdens.

It will also secure public organisations and centers of excellence as initial tenants, providing financial stability and enhancing the Park's reputation as a leading innovation hub.

The four priorities

The proposed thematic priorities for the Science and Technology Park in Pentakomo are the following:

Thematic priority 1: Energy and energy storage

Thematic priority 2: Health and medical technologies

Thematic priority 3: Nanotechnology and advanced materials

Thematic Priority 4: Digital technologies and IT-games and software development.

Available area and possibilities for future expansion

The gross land area designated for the project amounts to 192,620 sq m, with an approximate net usable area of ​​134,834 sq m, after the allocation of 30% for the creation of internal road network, public open space and community facilities (after deducting the land area designated by the provision of the main road network).

As noted, although the size of the Technology Park may not initially be what was expected, its capabilities are anything but limited.

Research into the key success factors of thriving technology parks across Europe shows that parks of similar plot size or smaller have achieved remarkable success.

Notable examples include DTU Science Park in Denmark, Technopol in Estonia and Joist Innovation Park in Greece. Utilising innovative design and strategic use of space, the Technology Park has the foundations to become a vibrant hub of innovation and collaboration.

It is worth noting that, while the government will not provide the investor with additional land area, any future expansion beyond the existing boundaries will be at the investor's discretion and responsibility.

This highlights the need for strategic foresight in the development phase, ensuring that the Park's design balances current needs with long-term scalability and adaptability.

Flexibility will be critical to adapt to technological developments and evolving market demands, allowing the project to remain competitive and aligned with Cyprus' strategic innovation goals.

Furthermore, with regard to the design and organisation of the Park, it is necessary to ensure that:

a) Provision will be made for future expansions, modifications and maintenance of basic infrastructure, including roads, electricity supply, water supply systems and sewage connections.

b) All key aspects that define the development - functionality, organisation, aesthetics and construction quality - will be consistently achieved and maintained.

c) The building layout remains sufficiently flexible to allow for the restructuring of building volumes and the necessary adaptations.

Land use and initial development

Approximately 30% of the total area of ​​the Science and Technology Park (192,620 sq m) will include internal road networks, ensuring efficient access and seamless connectivity within the Park, public open space and community facilities, after deducting the land area defined by the provision of the main road network.

An approximate net area of ​​134,834 sq m will be allocated for technological and scientific activities, such as research laboratories, office space and innovation hubs, fostering a dynamic ecosystem of innovation and collaboration.

(Source: InBusinessNews)