Cyprus ranked 15th in the world among 125 countries in the Innovators Business Environment Index (IBEI) 2026 by StartupBlink, and also entered the top eight countries in Europe. In Southern Europe, the republic took 1st place, demonstrating the highest indicators in its subregion. These results confirm the country’s strong reputation as a favorable jurisdiction for innovative companies, technology startups, and international investors.
Cyprus’s high position in the global ranking reflects not the scale of the economy, but the quality of the business environment. Against the backdrop of intensifying competition among countries for international capital, the island continues to attract entrepreneurs thanks to a combination of transparent regulation, European legislation, and a flexible tax policy.
Tax advantages as a key growth factor
The main competitive advantage of Cyprus in the IBEI 2026 ranking was its favorable tax legislation. According to the study data, the republic offers some of the most competitive tax conditions in Western Europe. This makes the country especially attractive for companies in technology, fintech, investment management, international holding structures, and digital services.
Cyprus ranked 1st in the European Union and 10th in the world in terms of tax system indicators. In business incentives, the country received 2nd place in the EU and 6th in the world, ranking second in the European rating only to Bulgaria. Among the key parameters by which Cyprus entered the top 25% of the global index are the corporate tax rate, capital gains tax, and dividend tax.
An additional advantage remains an extensive network of double taxation avoidance agreements, which significantly simplifies companies’ international operations. In conditions of global economic instability, it is precisely the predictability and stability of the tax system that become the most important arguments for investors.
Europe leads, but Cyprus stands out for the quality of its environment
The global top 20 of the IBEI 2026 ranking includes 10 European countries — more than from any other region of the world. However, Cyprus was among the leaders not thanks to market size, but thanks to the quality of its institutional environment and investment climate.
The report emphasizes that Cyprus’s results in IBEI 2026 are higher than the country’s indicators in the Global Startup Ecosystem Index 2025. This means that the baseline conditions for doing business in the republic are rated higher than the current actual activity of the startup ecosystem. In other words, the growth potential remains significant, especially in the segment of innovation and technology entrepreneurship.
Strategic location and economic transformation
Cyprus’s geographical position in the Eastern Mediterranean and its historical role as a trade center continue to play a strategic role in shaping investment attractiveness. The republic provides companies with access to the European Union market while maintaining flexibility for international operations.
Over the past years, the Cyprus economy has undergone a noticeable transformation. The authorities are actively developing digitalization, stimulating the development of the IT sector, and creating conditions for the relocation of international companies and specialists. Additional growth drivers have been innovation support programs, simplified business registration procedures, and the development of infrastructure for technology companies.
Today, Cyprus is positioned as a regional hub for international business, especially in fintech, blockchain projects, online services, and corporate management. The high position in the IBEI 2026 ranking confirms that the country successfully competes with major European economies, offering entrepreneurs a combination of tax efficiency, legal stability, and access to international markets. Given the ongoing global digital transformation, Cyprus has all the prerequisites to further strengthen its status as one of Europe’s most attractive business destinations.