From 2021 to 2023, 25,277 professionals who relocated to Cyprus from other countries took advantage of the state's tax incentives, which were part of its strategy to attract highly skilled workers.
These tax breaks totaled €406.6 million. Meanwhile, these workers' total earnings amounted to €1.31 billion.
The program aims to develop the country's human capital and technology sector and provides tax deductions ranging from 20% to 50%, depending on applicable legislation and the taxpayer's category. According to data presented at a House of Representatives Finance Committee meeting, only 5,292 of the total tax benefit recipients were Cypriot citizens who had returned to their homeland. These individuals received tax deductions totaling €84.8 million, with an average salary of €263.6 million.
The rest were foreign specialists attracted by lucrative employment opportunities. The list of countries from which they came included:
- Russia — 9,657 specialists (the absolute leaders in terms of tax benefits), who received €156.9 million in tax breaks on an income of €513.8 million;
- Greece: 2,825 specialists received €32.9 million in tax breaks and had an income of €111.1 million.
- Ukraine: 1,339 specialists; €17.9 million in tax breaks; income: €59.2 million.
- Belarus — 781 specialists and €13.6 million in tax breaks, with an income of €59.2 million;
- Israel — 552 specialists, €17.4 million in tax breaks, and €52.5 million in income;
- The United Kingdom has 479 specialists and €15.7 million in tax breaks, with an income of €47.6 million.
- Lebanon: 441 specialists; €5.4 million in tax breaks; €18.4 million in income.
- India: 409 specialists; €5.5 million in tax breaks; €19.8 million in income.
- Germany: 259 specialists; €4.9 million in tax breaks; €15.4 million in income.
- Italy — 239 specialists, €4 million in tax breaks, and €12.8 million in income;
- France: 201 specialists; €6.8 million in tax breaks; and €18.9 million in income.
An analysis of Cyprus's new tax residents shows that the incentives mainly attract professionals in high-tech fields.
Employees in the information and communications sector, including software development, are the leaders. More than 9,000 people with a combined income of €450.2 million received tax deductions totaling €136.4 million. Second place goes to scientific and technical activities, where nearly 6,000 specialists received €96.5 million in tax breaks and earned over €310 million. Third is the financial and insurance sector, where approximately 2,300 individuals with an income of €182.5 million received tax deductions totaling €59.2 million.
Additionally, employees from sectors such as administrative services, trade, transport, water supply and sanitation, public administration, education, and healthcare participated in the program. Thus, tax incentives had a multisectoral impact and became a tool for economic recovery.
However, not everyone welcomed the initiative with unqualified approval. Representatives of the legal community, particularly the Cyprus Bar Association, have expressed concern about the possible unequal treatment of taxpayers. Speaking in Parliament, lawyer Maria Grigoriou noted that the tax break scheme could encourage brain drain because, in her words, "it is like offering highly skilled professionals the opportunity to leave the country first and then return later under more favorable tax conditions."
She also stressed that the drafting of the bill was not accompanied by the necessary public consultations and proposed revising a number of its provisions. In response to the criticism, a representative of the Legal Service assured that the existing provisions were in line with international practice and aimed to enhance Cyprus's competitiveness as a platform for global business. Meanwhile, members of the finance committee agreed to revise some details of the document to balance the interests of local professionals with the strategy of attracting foreign talent.
As the bill continues to be shaped, it will continue to influence the country's image as a magnet for intellectual capital. Its future fate will indicate how successfully Cyprus will be able to integrate into the global competition for skilled personnel.