In a recent interview with “Phileleftheros,” (29/12/2024) President Nikos Christodoulides outlined a series of economic reforms and measures aimed at enhancing Cyprus’s economic landscape and the well-being of its citizens.
Economic Reforms and Tax Transformation
- Tax Reform Focus: The President emphasized the need to strengthen the middle class and support Cypriot businesses. By early 2025, the government will present proposals for tax transformation aimed at:
- Increasing tax-free income thresholds, especially for families with children.
- Offering incentives for green energy adoption, technology advancement, and other developmental initiatives.
- Supporting businesses that utilize government programs.
- Broadening the Tax Base: A strategic plan to expand the tax base includes leveraging emerging industries while continuing to capitalize on Cyprus’s robust services sector.
Employment and Investment
- Employment Growth:
- Unemployment has dropped to 5%, signalling full employment, while demand for skilled labour continues to rise.
- Plans are underway to attract Cypriot professionals from abroad by organizing recruitment missions to countries with strong scientific talent pools.
- Foreign Direct Investment (FDI):
- In 2023, Cyprus achieved a 129% increase in FDI, amounting to €3.5 billion and creating 2,500 high-paying jobs.
- The trend continues in 2024, with the creation of 750 new positions by September.
Strategic Sector Development
- Innovation and Startups:
- Cyprus is now ranked 45th globally in start-up ecosystems, a significant leap due to increased investments in research and innovation.
- Cypriot start-ups participating in EU programs have attracted over €680 million. An additional €15 million was allocated to the Research and Innovation Foundation to further support local businesses.
- Defense Industry:
- Six new policies have been announced to support Cyprus’s growing defense industry, which has already brought in €435 million through participation in EU programs.
- A registry of defense-related companies is being developed, and collaborations with countries like France, Spain, and Germany are expanding opportunities.
Diversifying the Economy
- Primary Sector:
- Plans are in place to enhance the agricultural sector, currently contributing just 1.6% of GDP, by encouraging youth participation and modernizing practices.
- Digital Transformation:
- A commitment to digital upgrades aims to improve both the country’s competitiveness and the daily lives of its citizens.
International Collaboration and Investment Attraction
- Focus Areas for Investment:
- The President will lead a delegation to the U.S. in April to attract targeted investments in shipping, technology, and other high-potential sectors.
- Efforts are ongoing to encourage foreign banks to operate in Cyprus, boosting competition and economic resilience.
Enhancing Governance and Transparency
- Institutional Reforms:
- Significant reforms are being planned for the Legal and Audit Services, along with strengthening the Advisory Council.
The measures announced by President Christodoulides underline Cyprus’s dedication to attracting international investments, nurturing collaboration with global partners and reinforcing the services sector while advancing digital transformation. With these initiatives, the government aims to enhance the resilient, diversified economy and meet the evolving needs of its people, businesses and the global economy.
