Cyprus continues to maintain a high level of attractiveness for foreign investors. According to the EY Cyprus Attractiveness Survey 2026, 83% of respondents consider the island an attractive destination for foreign direct investment. EY’s survey is conducted among international executives and professionals involved in investment decisions. It included 80 foreign investors from 23 countries and 11 industries. At the same time, 92% of respondents already have business operations in Cyprus. A total of 56% described the island as definitely attractive, while another 27% considered it rather attractive. Some 13% took a neutral position, while 4% rated Cyprus as unattractive for investment.
According to EY, the stock of foreign direct investment in Cyprus reached approximately €82 billion in 2025. The largest volumes of investment are concentrated in financial services, real estate and IT. Investor interest in the island is also growing. A total of 67% of respondents plan to enter the Cyprus market or expand their existing business there. For comparison, this figure stood at 57% in 2024 and 29% in 2022. Among companies already operating in Cyprus, 62% plan to expand within the next 12 months, while 29% intend to maintain their current scale of operations. Among investors not yet present on the island, half are considering entering the Cyprus market.
Taxation and quality of life remain key advantages
Investors identify the tax system as Cyprus’s main competitive advantage, with 90% of survey participants rating it positively. Quality of life ranks second, viewed as an advantage by 82% of respondents. Political and social stability was cited by 65%, the skills of the local workforce by 58%, and prospects for economic growth by 49%. Cyprus’s tax attractiveness remains strong even after the change in corporate taxation. From the beginning of 2026, the standard corporate tax rate increased from 12.5% to 15%.
Large international groups are also subject to the global minimum effective taxation mechanism under Pillar 2. EU rules provide for a minimum effective tax rate of 15% for companies meeting the relevant criteria, in particular multinational groups with consolidated revenue of at least €750 million.
The Cyprus economy continues to grow, although according to the European Commission, the pace of growth is expected to slow in 2026. Brussels forecasts GDP growth of 2.3% in 2026 and 2.7% in 2027. Inflation is meanwhile expected to rise to 3.6% in 2026 before falling to 2.2% in 2027. One of the factors behind the increase in prices remains the energy shock.
High energy costs and bureaucracy remain challenges
Despite the positive overall assessment of Cyprus, investors point to several factors that could limit further capital inflows. The main concern is the cost of energy, cited by 50% of respondents. This is followed by:
- access to financing and capital — 38%;
- bureaucracy — 35%;
- transport infrastructure and logistics — 33%;
- lack of investment opportunities — 31%.
Looking at the longer term, 74% of respondents named geopolitical tensions and conflicts as the main risk to Cyprus’s investment attractiveness. Another 29% of investors are concerned about the country’s limited transport connectivity, its reputation and an increasing regulatory burden. Labour shortages were mentioned by 27%, while energy price volatility and supply disruptions were cited by 26%. The European Commission also links higher inflation risks in 2026 to the energy shock caused by the conflict in the Middle East. At the same time, Brussels considers the island’s economy to remain resilient thanks to domestic demand and a strong services sector, including IT and financial services.
Real estate, construction and IT among the main growth areas
Most investors remain positive about Cyprus’s future prospects. A total of 60% believe that the island’s investment attractiveness will improve over the next three years. Another 24% do not expect significant changes, while 6% forecast a deterioration. Real estate, infrastructure and construction were identified by 23% of investors as the main drivers of long-term growth. Tourism and IT and telecommunications followed at 14% each, while payment systems and fintech were cited by 11%. EY separately highlights the continuing importance of real estate and tourism alongside the development of ICT and fintech.
At the same time, Cyprus’s investment profile is gradually becoming more diverse. In addition to traditional sectors, investors are showing interest in research and development, regional headquarters and business services. Almost half — 48% — link their plans to enter or expand in Cyprus with their core commercial activities involving the sale of goods and services. Cyprus also appears resilient against the backdrop of the broader European market: according to EY, 5,026 foreign investment projects were recorded in Europe in 2025, 7% fewer than a year earlier.
Overall, Cyprus continues to hold a strong position in the eyes of foreign investors in 2026. However, further improvement in the island’s attractiveness will depend not only on tax conditions and quality of life, but also on addressing the cost of energy, infrastructure, access to capital, labour availability and regulation.