By investing in Cyprus, you’ll have access to the crossroads of Asia, Europe, and Africa.
Geographically part of the Asian continent, but also an EU member, Cyprus’ unique spot on the map helps it serve as a bridge between regions.
Combined with an attractive business climate and relatively skilled labor market, Cyprus’ geographic advantage makes an ideal gateway for foreign capital.
Our guide about investing in Cyprus covers real estate, the local VC scene, along with the nation’s small-but-growing stock market.
We’ll start with a quick intro, and if there’s a specific topic you’d like to learn about, jump to it by clicking any topic on the right side menu.
Cyprus: Gateway to Mediterranean Prosperity
You’ll find several compelling reasons to invest in Cyprus. With a highly strategic location, Cyprus grants unique opportunities in trade and business expansion.
These perks are further complemented by tax breaks for foreign investors and the ability to become a permanent resident of Cyprus by investment.
Property, finance, and tech all are especially booming in Cyprus, which offers a wide array of choices for investors.
The local tourism sector is likewise flourishing here. Cyprus’ lifestyle is known for creating a high standard of living while drawing in tourists/expats from around the world.
Cities and Towns
Cyprus is a culturally diverse country. Each city and town has its own combination of culture, commerce, and lifestyle.
Nicosia is the capital and largest city of Cyprus since the 10th century. The city itself has been continuously inhabited for over 4,500 years, with a historic role since the Assyrian era.
Today, Nicosia is the political and financial center of the country, with the coexistence of an old town as well as a vibrant modern business center.
Nicosia’s skyline shows just how developed Cyprus has become over the past 50 years.
Along the southern coast, Limassol is the financial capital of Cyprus and an industrial port city. One of the busiest ports in the Mediterranean, the Port of Limassol, has positioned itself as a key hub for trade and logistics.
Paphos lies on the west coast. It’s an idyllic seaside town famed for its rich archaeological heritage, including some of the finest Roman villas anywhere to be seen. It’s especially become popular with tourists, creating opportunities in hotels and real estate.
The island’s third largest city, Larnaca, lies on the southeastern shore and hosts the main international airport and Cyprus’ busiest port.
Famagusta lies in the northeastern part of Cyprus, and is locally famous for its beaches. The city became divided into two parts due to longstanding political conflict.
The northern part of Famagusta is part of Turkey, including the former thriving tourist region known as Varosha.
It’s almost needless to say that we wouldn’t suggest investing here – it’s far too volatile of a location.
How to Start a Company in Cyprus
An LLC in Cyprus can be wholly foreign-owned, requiring only a single shareholder and director (either an individual or a company). They can be from any nationality.
Furthermore, there are no restrictions on industries… with the exception of media and financial services, which are both heavily regulated.
You’ll need an active registered office address within Cyprus to which all official mail will be addressed. Many companies choose an external corporate service provider to meet this requirement.
Cyprus benefits from one of the most favorable corporate tax regimes in the European Union, with a standard corporate income tax rate of only 12.5%. On top of that, Cyprus has a network of double taxation treaties with more than 60 countries.
Financial Markets and Stocks in Cyprus
The Cyprus Stock Exchange (CSE) was established back in 1996. With a market cap of only about €4 billion, Cyprus doesn’t have a large stock market by any means.
Nonetheless, the exchange has grown steadily ever since its inception. Most people also find that trading stocks here is a user-friendly experience once they’ve already set up a local brokerage account.
The CSE currently has 108 listed companies from various sectors, which is relatively small compared to other major stock exchanges worldwide.
Getting the account set up in the first place is often the complicated part. Fortunately, investors don’t need to make a personal visit to open a brokerage account in Cyprus. It can be done remotely.
The growing capital market includes firms such as Hellenic Bank and Bank of Cyprus. Meanwhile, Eurobank is one of the largest international players.
Cyprus’ Currency: The Euro (EUR)
Cyprus is part of the Eurozone and uses the Euro (EUR) as its official currency. This enables businesses and investors in Cyprus to use a single currency, bringing stability and facilitating international transactions.
You’ll find an abundance of currency exchangers in all of the main tourist areas in Cyprus, including at most banks, exchange offices, and even as an ATM feature.
Since the Euro is one of the most popular world currencies, it’s easy to convert to almost all other currencies. It’s pretty stable with a minimal amount of currency exchange risk.
We realize that some investors want to diversify outside of major world currencies like the EUR and USD. That said, we think the Euro’s adoption is positive in this case.
You’re better off here than with exotic currencies in the region like the Turkish Lira.
Industry in Cyprus
Cyprus has a dynamic economy, providing the local and international investor community with a plethora of ways to invest in the island.
Tourism is one of the main drivers due to its impressive coastline, beaches, and historical and cultural sites.
Millions of people visit Cyprus each year. Naturally, this means hotels, restaurants, and related services must cater to this growing demand.
It’s also worth noting that Cyprus has one of the largest ship registers, and consequently, is at the heart of the global maritime industry.
Registering yachts and freighters in Cyprus is a popular choice, and brings a considerable amount of income.
The Port of Limassol is Cyprus’s largest port and maritime logistics hub. The Limassol Marina, a well-known cruise and yacht port, is also nearby.
Cyprus is also a well-established financial center with a renowned regulated banking sector and financial services industry. Banking, asset management, and innovation in fintech all offer opportunities.
The country has plans to tap its energy potential with offshore oil and gas reserves. Such assets provide such as energy exploration, and of course, renewable energy initiatives.
Cryptocurrency in Cyprus
The adoption of crypto in Cyprus is on the rise. Bitcoin, Ethereum, and other coins have become popular for transactions.
Cyprus also hosted some ICOs to raise funds for blockchain projects. Crypto traders can legally buy digital assets on local trading platforms in Cyprus. Several of these exchanges follow CySEC rules to offer protection for investors.
Early adoption of crypto legislation makes Cyprus a top location for investors eager to delve into this burgeoning field. While the industry is still developing, it offers a strong base for a crypto business.
Apart from cryptocurrency itself, Cyprus is experimenting with use cases for blockchain tech in property, logistics, and healthcare.
Buying Real Estate in Cyprus
Cyprus’s housing market has continuously grown over the past several decades, with prices especially surging in the 2000s.
The country’s strategic location, Mediterranean climate, and residence/citizenship by investment programs are all to thank for this.
The price for waterfront and beachfront villas in Limassol can be anywhere from € 600,000 to €15M.
The Cypriot government has made efforts to encourage foreign investment in the real estate market, and there are few general restrictions on property ownership for non-Cypriots.
Foreign individuals and entities can purchase residential and commercial properties on a freehold basis, including land, apartments, and houses.
However, non-EU citizens are subject to certain restrictions on the maximum amount of land they can own. Foreign, non-EU citizens can’t own anymore than 4014 m² here.
Cyprus has multiple attractive regions, each with its own set of opportunities. You’ll find plenty of villas, houses, and commercial properties listed on the market.
Though real estate prices are steadily increasing with demand, Cyprus still remains more affordable than western Europe.
Prices are (unsurprisingly) highest in coastal cities and popular tourist destinations. In the capital city of Nicosia, the average price per sqm for an apartment range between €1,500 to €2,500.
In coastal Limassol, prices are even higher at €2,500 to €4,000 per square meter. Larnaca is similar to Nicosia, with apartments going for €1,500 to €2,500.
Cyprus’s passport ranks 14th on the Guide Passport Index. It provides visa-free access to 177 countries.
For those who want Cypriot permanent residency, the Cyprus Investment Program grants long-term residence to foreigners through real estate investment.
Getting Cyprus residence permanent residence requires spending a minimum of €300,000 on property. Up until its suspension in 2020, Cyprus also had a citizenship by investment (CBI) program for €2 million.
Private Equity and VC in Cyprus
Cyprus has made significant efforts to boost its private equity and venture capital sector, with many efforts backed by the government directly.
Dozens of VC firms have set up shop in Cyprus over the past decade to provide seed and expansion capital. There’s an increasing trend of incubators/accelerators taking part in the local startup market.
The Cypriot government has created policies designed to foster innovation. Initiatives like the Cyprus Research and Innovation Foundation (RIF) grant capital to innovative projects, often without many strings attached.
Cyprus Investment Funds (CIFs), on the other hand, offers a way to invest in a collection of early-stage and growth-stage companies.
Here in Cyprus, you won’t find any shortage of startups. The country’s tech, e-commerce, and healthcare sectors are all especially popular for VC funds.
Should You Invest in Cyprus?
Cyprus’ Mediterranean setting makes it an attractive place to enter the European market while still having a foothold in Asia.
The country’s unique position sets it as a bridge between Europe, Asia, and even Africa. Meanwhile, Cyprus has a stable political and juridical framework… especially compared to most countries on the mainland towards its east.
With all of that said, Cyprus’ economy has major constraints. It’s small nation of barely over a million inhabitants.
For example, you aren’t going to become a billionaire here by selling consumer products in bulk. There just isn’t enough ability to scale.
You can generally expect similar returns to any other developed European market – which isn’t anything spectacular.
Cyprus isn’t an emerging economy anymore and you don’t have the same potential you would in Southeast Asia, for example.
Lastly, the ongoing territorial dispute with Turkey is also a concern. It’s unlikely anyone would try anything with an EU member state though. At least for now.
Cyprus is certainly worth considering for the right type of investor. It’s positioned in the right spot for tourism and trade. The crypto sector’s legality makes anything related to the blockchain promising as well.
That said, you’re still dealing with a small developed market. You’ll eventually face limits on growth because of that.