The economy in Cyprus is beginning to look very attractive due to its thriving nature. Over recent years sectors such as real estate, tourism and energy have dominated Europe. Other sectors have also been proving their worth and providing a good income for the island. The areas we are speaking about include startups and funds as well as the shipping industry and real estate.
With this forecast of sustainable growth, we thought we would discuss all there is to know about the economy in Cyprus, what sectors are helping it thrive and what you can expect to see in the coming months and years.
Research, Startups and SME’s
We are going to start by discussing the most recent success for the economy in Cyprus. Startups in Cyprus, particularly those engaged with research and technological advancement, have seen a considerable rise in support. Cyprus even has a specialized visa application process for entrepreneurs based outside of the European Union. This has been created to help entrepreneurs establish, operate and develop a startup within Cyprus. This visa involves 2 parts; Individual Startup Visa plan or Group Startup visa plan, depending on your circumstances.
Furthermore, in 2019 the Cypriot government decided to enhance its investment in technological research even further. As the government want to innovate the island and gain the reputation of an innovative hub, major resources are now distributed to the startup world. The hope is that Cyprus will build an ecosystem that inspires and helps increase areas of research, startups and SME’s.
Arguably the biggest area of the economy in Cyprus, tourism and hospitality have been continuously thriving for years. During last year Cyprus saw tourist arrivals increase yet again, this time by 1%. The island has seen a positive trend in arrivals since 2014.
Last year the tourism industry also saw a rise in revenue; August 2019 revenue reached €431,6 mn compared to €428,2 mn in August 2018. Furthermore, the island saw an increase of tourism expenditure in 2019 in comparison to the previous year. Of course, with the ongoing pandemic of 2020 numbers in tourism have seen a significant drop however, Cyprus is confident in its rebound.
One reason the island is so popular with tourists from across the globe is the blue flag beaches. Every part of the island including Larnaca, Paphos and Famagusta have beaches that were awarded blue flag status. What’s more is the island isn’t just for beach goers, there are also mountain ranges where tourists can ski during the winter month. This means Cyprus is a year-round destination, a big advantage for its tourism industry and the Cypriot economy.
Finally, for many years Cyprus and the business owners of the island have used the Mediterranean weather and tourism industry to boost revenue through hosting weddings. This trend will undoubtably continue as a thriving industry.
The Economy in Cyprus: Shipping, Energy and Renewables
Some of the less well-known sectors of the economy in Cyprus include the shipping industry as well as the energy and renewable sector. However, both these industries greatly help the economy each year.
The shipping industry of Cyprus is at a great advantage due to the geostrategic location of the island. Because of this the international shipping industry takes interest in Cyprus and its ports. Key global shipping giants along with the EU-approved “open registry” regime have allowed Cyprus to grow and further develop its shipping sector at an extraordinary rate. Up until today the island has over 1,000 vessels which makes it the 2rd largest merchant fleet in Europe, the 11th largest in the world.
On top of all this, Cyprus has also seen the reapproval of the Cyprus Tax System by the EU. This means Cyprus is now ensured the growth and sustainability of the shipping sector for the next 10 years.
Now let’s talk about the energy and renewables sector.
Recently Cyprus has been making major advancements in this sector of the economy. The island has begun to pay particular attention to sustainable and renewable energy, focusing on dependency. This advancement started after the European Commission released figures that stated 90% of the island’s fossil fuels were imported. And, although this is alarming, it is reassuring that Cyprus has the highest potential for solar power usage in Europe. With this in mind the Chairman of the Energy Committee promised that a new scheme would be created in order to become the highest achieving country in Europe for using solar power.
Finally, the energy and renewable sector saw expansion and even more opportunity after the discovery of natural gas in 2019. This discovery of natural gas made on the offshores of the island has interested many investors, local and foreign.
Real Estate Industry in Cyprus
Lastly, we are going to discuss the real estate industry in Cyprus. The real estate market in Cyprus has seen positive trends with interest in both local and foreign buyers. However, foreign buyers have really pushed the transformation of the housing market due to the demand in luxury properties. Foreign investors and expats have started to invest in grand houses, city center apartments and luxury beachfront villas across the island.
This sector also feeds the tourism industry due to its links with investment. Many foreign investors having been purchasing property to rent out during tourist seasons. Or, purchasing property for themselves to visit each year. So, as you can tell these industries are interlinked.
Although the economy in Cyprus has taken a hit due to the ongoing pandemic, it is forecast to revive with sustainable growth. It remains an attractive place for investment to foreign investors and tourism continues to flourish. With new discoveries such as natural gas and an emphasis of making Cyprus a startup hub, Cyprus is seeing encouraging revenue.