{"id":106803,"date":"2026-03-01T05:17:00","date_gmt":"2026-03-01T08:17:00","guid":{"rendered":"https:\/\/tech.einnews.com\/article\/896594192"},"modified":"2026-03-01T05:17:00","modified_gmt":"2026-03-01T08:17:00","slug":"cyprus-economy-grew-as-service-and-tech-sectors-expanded","status":"publish","type":"post","link":"https:\/\/new7.shop\/zerocostfreehost\/index.php\/2026\/03\/01\/cyprus-economy-grew-as-service-and-tech-sectors-expanded\/","title":{"rendered":"Cyprus economy grew as service and tech sectors expanded"},"content":{"rendered":"
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Cyprus\u2019 economic expansion in 2026 reflects the consolidation of a model heavily reliant on services, foreign investment and cross-border business flows<\/strong>, strengthening its role as a bridge between Europe and neighbouring regions<\/strong>, but also raising questions about long-term balance. <\/p>\n

According to the European Commission\u2019s Winter 2026 Forecast<\/strong><\/a>, Cyprus is expected to maintain solid growth momentum, supported primarily by services exports and private consumption. <\/p>\n

In particular, full access to the European single market<\/strong>, combined with a competitive institutional framework, has enabled the island to position itself as a bridge for capital and corporate activity at a time of geopolitical shifts and technological transformation. <\/p>\n

As a result, international firms increasingly view Cyprus as an entry point to the EU and neighbouring regions, a trend also reflected in data published by Invest Cyprus<\/strong><\/a>.<\/strong> <\/p>\n

Investor confidence, meanwhile, has been supported by successive credit rating upgrades<\/strong>. In 2024 and 2025, Moody\u2019s, S&P and Fitch<\/strong> reaffirmed Cyprus\u2019 investment-grade status, citing fiscal discipline and banking sector resilience<\/a>. <\/p>\n

Steady GDP growth has further reinforced stability, with Eurostat data<\/strong> showing Cyprus consistently outperforming the euro area average in recent years. <\/p>\n

The abolition of immovable property tax<\/strong> in 2017 also strengthened the investment environment<\/a>. <\/p>\n

In addition, the l<\/strong>and <\/strong>r<\/strong>egistry system<\/strong> and a strengthened supervisory framework in the banking sector, under the oversight of the Central Bank of Cyprus<\/strong> (CBC)<\/strong><\/a> and the ECB\u2019s single supervisory mechanism, have helped preserve credibility. <\/p>\n

Crucially, tax policy remains a cornerstone of competitiveness. The 15 per cent corporate tax rate<\/strong>, aligned with the global minimum tax framework, remains among the lowest in the European Union<\/a>. <\/p>\n

At the same time, exemptions on dividends and gains from the disposal of securities for non-residents, coupled with zero withholding tax<\/strong> on outbound payments and a 5 per cent tax rate on foreign pensions<\/strong><\/a>, provide predictability for both companies and individuals. <\/p>\n

Alongside this, the technology sector<\/strong> has evolved into a key driver of growth. A recent KPMG Cyprus study<\/strong> estimated that the tech sector accounts for a growing share of gross value added, reflecting rapid expansion in software development, fintech and cybersecurity services<\/a>. <\/p>\n

International IT, fintech and cybersecurity firms have established operations on the island, creating a broader ecosystem of high-skilled employment and specialised services<\/a>, a development also supported by TechIsland<\/strong>, Cyprus\u2019 largest tech association. <\/p>\n

To support this trend, the government has introduced targeted incentives<\/a>. Work and residence permits of up to three years<\/strong>, renewable, streamlined long-term residency procedures and labour market access for spouses of highly paid professionals form part of the framework. <\/p>\n

Furthermore, the Digital Nomad Visa<\/strong> and a 50 per cent tax exemption<\/strong><\/a> for non-resident employees earning above \u20ac55,000<\/strong> have strengthened Cyprus\u2019 position in the competition for mobile talent. <\/p>\n

However, this success also raises structural questions. Dependence on services and internationally mobile capital<\/strong> means the model must continuously adapt to evolving<\/a> OECD and EU tax rules<\/strong>. <\/p>\n

In that respect, maintaining institutional stability<\/strong> and investing in human capital<\/strong> remain essential to long-term sustainability. <\/p>\n

The impact is most visible in the real estate market<\/strong>. Data from the CBC <\/strong>Residential Property Price Index<\/strong><\/a> show sustained increases in property values, particularly in urban districts. <\/p>\n

As foreign companies relocate staff, often highly paid executives, demand for housing has intensified in specific urban areas. Consequently, rents and purchase prices have risen sharply, especially in high-demand districts. <\/p>\n

This has contributed to the emergence of a \u201cdual\u201d housing market<\/strong>: one segment catering to higher-income foreign professionals, and another offering increasingly limited options for local households. <\/p>\n

The pressure on affordability, particularly for younger Cypriots, has become a growing concern. <\/p>\n

Beyond housing, the issue extends to social cohesion<\/strong>. The challenge lies not in the presence of foreign companies per se, but in ensuring their effective integration into the domestic economic and social fabric. <\/p>\n

Without forward planning, rapid expansion risks outpacing infrastructure and policy capacity. <\/p>\n

For that reason, calls are mounting for a more comprehensive strategy. Proposals include expanding the supply of affordable housing<\/strong>, incentivising mid-market residential development and strengthening local entrepreneurship so that domestic firms can compete for skilled labour. <\/p>\n

At the same time, greater investment in education and training, an area emphasised in Cyprus\u2019 r<\/strong>ecovery and <\/strong>r<\/strong>esilience <\/strong>p<\/strong>lan<\/strong> (RRP)<\/strong>, would allow more Cypriots to benefit directly from high-value employment<\/a>. <\/p>\n

Ultimately, Cyprus\u2019 transformation into a service and technology hub<\/strong> presents both opportunity and risk. <\/p>\n

Whether the current trajectory proves sustainable will depend on the country\u2019s ability to balance competitiveness with regulatory resilience, diversify its productive base and ensure that economic growth translates into broad-based and socially balanced prosperity<\/strong>. <\/p>\n

<\/a><\/strong> <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

… individuals.\u00c2\u00a0 Alongside this, the\u00c2\u00a0technology<\/span> sector\u00c2\u00a0has evolved into … study\u00c2\u00a0estimated that the\u00c2\u00a0tech<\/span> sector accounts for a … by\u00c2\u00a0TechIsland, Cyprus\u00e2\u0080\u0099 largest tech<\/span> association.\u00c2\u00a0 To support this trend … into a\u00c2\u00a0service and technology<\/span> hub\u00c2\u00a0presents both opportunity and …<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"","fifu_image_alt":"","footnotes":""},"categories":[1],"tags":[],"class_list":["post-106803","post","type-post","status-publish","format-standard","hentry","category-news","wpcat-1-id"],"_links":{"self":[{"href":"https:\/\/new7.shop\/zerocostfreehost\/index.php\/wp-json\/wp\/v2\/posts\/106803","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/new7.shop\/zerocostfreehost\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/new7.shop\/zerocostfreehost\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/new7.shop\/zerocostfreehost\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/new7.shop\/zerocostfreehost\/index.php\/wp-json\/wp\/v2\/comments?post=106803"}],"version-history":[{"count":0,"href":"https:\/\/new7.shop\/zerocostfreehost\/index.php\/wp-json\/wp\/v2\/posts\/106803\/revisions"}],"wp:attachment":[{"href":"https:\/\/new7.shop\/zerocostfreehost\/index.php\/wp-json\/wp\/v2\/media?parent=106803"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/new7.shop\/zerocostfreehost\/index.php\/wp-json\/wp\/v2\/categories?post=106803"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/new7.shop\/zerocostfreehost\/index.php\/wp-json\/wp\/v2\/tags?post=106803"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}