Interview with Marios Tannousis, Invest Cyprus
Cyprus has become rather good at attracting international technology companies. Is the bigger challenge now to turn that success into more companies that are actually built and scaled here?
Yes, and I would put it in exactly those terms.Attracting international companies was a priority, and we have been successful. Technology now contributes more than €4 billion directly to GDP, roughly 15 per cent of the economy, and supports almost 70,000 jobs including indirect employment. Between 2016 and 2025 Cyprus recorded the fastest information and communication technology (ICT) growth in the EU.
But international companies and local startups are not separate worlds. International firms are the training ground for local entrepreneurship: the people who learn there go on to found startups or become their first senior hires and angel investors. They also buy local services and partner with our universities. Startups connected to Cyprus raised more than €112 million in the first ten months of this year, nearly as much as in all of 2025.
The real test of whether we have moved from relocation destination to innovation economy is how many companies founded here scale without moving their headquarters, how much research and intellectual property is generated on the island, how much we export, and whether successful founders reinvest in the next wave.
Take tax and lifestyle out of the equation for a moment. What is Cyprus’ real competitive advantage for a technology company deciding where to invest, build or grow?
Cyprus is a full member of the EU and the eurozone. Companies here operate under EU law with access to a single market of 450 million consumers, and in regulated sectors such as financial services a licence granted here is valid in every member state. That is why we have been inviting startups from India, Saudi Arabia, the UAE, Brazil and other markets to use Cyprus as their hub, drawn by the incentives on offer, to scale up in the EU.
We also sit between Europe, the Middle East and North Africa, and as a stable, trusted European state with long-standing regional relationships, we can be a bridge in a way larger, more distant centres cannot.
Next, we have real depth in legal, accounting, funds and shipping services, something that is unusual for a country our size. Our regulators also back innovation, through sandboxes for testing new products and the Central Bank’s Innovation Hub.
What others cannot easily copy is the combination, together with the agility of a small country where investors reach decision-makers quickly. In short, we compete on speed, access and trust.
We hear a great deal about company arrivals and relocations. Are those still the right measures of success, or should Cyprus now be setting the bar rather higher?
Arrivals still matter, but they are no longer the measure we judge ourselves by. The bar is higher now, as it should be.
What counts is what an investment actually does here, whether it brings research, intellectual property and highly skilled jobs to Cyprus, works with local suppliers and universities, reinvests and exports. That is what we track after every investment we support, and it is what the incentives now reward.
Gross foreign direct investment inflows rose by around 60 per cent to €8.5 billion in 2024, and over 2024 and 2025 Invest Cyprus advanced 12 major investments and helped establish more than 420 companies through the Business Support Centre. The test now is whether those investments build the economy or simply pass through it.
There seems to be no shortage of people wanting to start companies in Cyprus. What happens when they need serious money to grow? Where is the funding gap today?
There is certainly no shortage of founders. The Research and Innovation Foundation’s (RIF) latest PRE-SEED call closed in September with a record 284 proposals, a remarkable number for a country of our size.
Access to funding has also improved considerably. RIF provides grants up to €2 million per project, while, on the equity side, the Cyprus Equity Fund, set up with the European Investment Fund, has backed 33East, a venture capital fund investing in early-stage companies.
The real gap opens at Series A and beyond, when a company needs €5m to €20m to expand internationally.
Our venture capital market does not yet have that depth, so most growth rounds are led by foreign investors.
Our answer is threefold: use the RIF’s blended-finance programmes that combine public funding with VC investment and de-risk growth; bring more international funds to Cyprus; and put our founders directly in front of global investors through our missions to the United States, India, the Gulf and the UK, and through partners such as Plug and Play.
Cyprus now has incubators, accelerators, grants and startup programmes aplenty. From what Invest Cyprus sees on the ground, are we better at helping companies get started than helping them become big?
Yes, and I think everyone in the ecosystem would agree. Our support is strongest at the start, through grants, incubators, accelerators and mentoring.
The gaps show when a company grows from 10 employees to 100, and from 100 to 500. At that point it needs international sales, experienced managers who have scaled businesses before, specialist talent and larger amounts of capital.
We are working on each of these. On market access, Invest Cyprus has built relationships that work in both directions. The India – Greece – Cyprus corridor, the opening in new markets for Cyprus like Latin America through Brazil and the Brazil – Portugal – Cyprus business and investment corridor formalised in May, our work with the Gulf and the US, open doors for Cypriot companies abroad and bring founders from those markets here.
What we still need more of is growth capital and people who have scaled companies before. Both will come as more companies succeed and more experienced executives, including Cypriots returning from abroad, build their careers here.
Cyprus has high-quality research. From an investor’s perspective, what will it take to turn more of that research into globally competitive companies?
Investors look for three things: clearly owned intellectual property; a team with commercial as well as scientific strength; and a market big enough to justify the risk. So, we need commercially minded technology transfer offices; clear rules around IP ownership, and incentives for researchers to become entrepreneurs, and early proof-of-concept funding that allows promising technologies to demonstrate their commercial potential.
We are already building that infrastructure across our universities and research institutions. The legislation has been amended to make it easier to establish spin-offs, while policies governing the ownership and licensing of intellectual property have also been updated.
The RIF operates a Central Knowledge Transfer Office and has been supporting universities and research centres across Cyprus in developing their own technology transfer capabilities.
At Invest Cyprus, our job is to connect researchers with the companies and investors who can take their ideas further.
Cyprus wants to be part of the AI race, and Invest Cyprus is talking increasingly about AI and deep tech. How do we make sure that expertise filters through to the wider economy rather than remaining largely within international technology companies?
The new National AI Strategy, which runs to 2032, aims to make Cyprus the leading trusted AI hub in the Eastern Mediterranean, with AI used across the whole economy, not just by a handful of large firms.
When Tenstorrent opened its office here, it came with an agreement covering research and education, not just a lease.
For most small firms, the barrier is not the technology, but knowing how to use it. So, the focus is on practical, everyday uses: forecasting demand and setting prices in tourism, cutting fuel costs in shipping, spotting fraud in financial services and automating paperwork in retail and professional services.
I believe Cyprus can develop AI strengths of its own: trustworthy AI for regulated industries, AI for shipping, and Greek-language tools developed with Greece.
We may never compete on scale, but we can compete on speed, as a place where AI is developed, tested and put to work quickly.
Talent is becoming every bit as important as tax. Can Cyprus continue to rely so heavily on attracting skilled people from abroad, or does it now need to produce far more of that talent at home?
It has to be both, and I would also add Cypriots abroad who are ready to come home.
International talent will remain essential. More than 12,000 of the roughly 48,000 people working directly in our tech sector last year came from outside the EU. But shortages in software, AI, cybersecurity and engineering are global, so we cannot rely on importing skills alone. At home, that means universities working more closely with employers, more internships and serious investment in retraining people already in work, especially for AI.
The government’s ‘Minds in Cyprus’ programme is already bringing professionals back, with income tax exemptions of 25 per cent, rising to 50 per cent for higher earners who have been away for 15 years. More than 700 people have registered on its jobs platform. New tax rules on employee share schemes also help startups compete for talent without paying large salaries.
Bureaucracy is still one of the complaints investors raise about Cyprus. When you sit down with companies, what frustrates them most, and which of those problems could realistically be fixed soon?
The concerns we have heard most often are about the time it takes to get permits and approvals, immigration procedures for non-EU staff and their families, and being sent between departments that ask for the same documents twice. All of these are now being addressed.
The biggest change is the Business Support Centre, open since May 2025, which gives every investor, Cypriot or foreign, a single point of contact. It does not replace the regulators, but it works with them to speed up approvals, and for strategic investments it can manage the whole process from start to finish.
Together with new laws on strategic developments, that should make a real difference to larger projects.
There is progress on immigration too. Foreign-owned companies registered with the Business Support Center can hire staff from outside the EU more quickly, and Startup Visa applications are now decided in around five weeks.
How much of Invest Cyprus’ job is now about bringing in new investors, and how much is about convincing companies already here to stay, expand and put more into Cyprus?
Much more of it than people realise is about the companies already here. Around the world, a large share of foreign investment comes from existing investors expanding, and Cyprus is no different. A company that is happy here is also our best ambassador.
Aftercare is therefore central to our work – we stay in touch with established investors, help them through the Business Support Centre when they want to grow, and work with them when they consider moving more functions here, from R&D to a regional headquarters.
The problems they meet once established are mostly practical: recruiting skilled staff, especially from outside the EU – housing and schooling for their teams and licensing for new activities. We take that feedback to the relevant ministries and push for solutions.
You have spent considerable time taking the Cyprus investment story abroad. What would count as the next genuinely significant win, something that would materially change the country’s innovation landscape?
Any one of several would be significant: a major international R&D centre; a large venture capital presence managing growth funds from Cyprus; an international company moving a core technology function here; or a Cypriot scaleup becoming a recognised international name.
That is the story we are taking to the world. Our national narrative, Stability with Perspective: A European Hub with Global Reach, is now being rolled out, and we are presenting it to international and local stakeholders, including the local business communities.
Cyprus has proven it can attract international technology companies. The next significant win will prove we can build them here too. The excellent coordination between the Deputy Ministry of Innovation Research and Digitalization, the Chief Scientist, the Research and Innovation Foundation as well as the other Ministries and private sector with the support from the Presidency are key on further wins for quality foreign investment and talent that can create more quality jobs for Cyprus and value for the Country, its companies and its people