The international insurance company William Russell published a study comparing ten European countries based on key parameters that determine their attractiveness to expatriate entrepreneurs. The six indicators taken into account were startup density, business survival rate during the first year, venture capital investment, availability of infrastructure for collaboration, workforce participation, and number of billionaire entrepreneurs.
The UK came out on top with a score of 8.66 out of 10. Sweden, Switzerland, and Germany were also among the leaders. The main surprise of the ranking, however, was Cyprus, which came in fifth, leaving many Northern European economies behind.
Cyprus is an unexpected leader in startup creation
According to the study, Cyprus scored 6.77 points, entering the top five best business destinations in Europe. Experts noted that Cyprus significantly exceeded expectations for startup creation: the startup density index was 12.79 per thousand employees, and 87.8% of businesses survived the first year.
Although the total volume of venture capital investment remains relatively small at around €500,000, Cyprus is establishing itself as a new destination for entrepreneurs. The island is particularly attractive to digital nomads, IT specialists, and small business owners looking for a comfortable combination of low taxes, a mild climate, and access to the European Union market.
Why Startups and Expats Choose Cyprus
In recent years, Cyprus has actively developed its legislative framework to foster a conducive business environment. The government offers preferential tax regimes, programs to attract investors, and visas for technology and creative industry specialists. These efforts have transformed the island into not only a tourist destination, but also a business center.
Modern coworking spaces, hubs for innovative companies, and accelerators are opening in Nicosia, Limassol, and Larnaca, which also plays an important role. Combined with an English-speaking environment, a favorable location between Europe, the Middle East, and Africa, and a high quality of life, Cyprus is becoming a place where startups can quickly adapt and grow.
Additionally, the growing influx of digital nomads coming to the island under new visa programs is driving demand for housing and services for entrepreneurs, further strengthening the ecosystem.
The United Kingdom and Northern Europe: Cyprus' competitors
The UK topped the ranking thanks to more than €3 billion in investments in startups and a high density of new businesses. However, many entrepreneurs note rising living costs and uncertainty after Brexit.
Sweden came in second with a score of 7.47, demonstrating high employment and economic stability. Switzerland and Germany also ranked high thanks to their access to capital and developed business environments. However, Cyprus has emerged as a rapidly strengthening destination, offering a combination of ease of doing business and attractive living conditions.
The Future of Entrepreneurship in Cyprus
Today, Cyprus is perceived as a country where you can start and build an international business, taking advantage of tax residency and access to the EU. The island's success in the ranking confirms that a relatively small economy can compete with leading European countries if it develops a startup ecosystem wisely.
For expat entrepreneurs, Cyprus is becoming more than just a place to register a company; it is a full-fledged business platform where they can develop projects in technology, finance, education, and creative industries. With the growth of coworking spaces, accelerators, and new government initiatives, Cyprus is strengthening its status as a European startup hub.