The information technology and telecommunications sector is the largest contributor to the GDP of Cyprus, thanks to its continuous stable growth and development.
This was stated the other day by Invest Cyprus CEO Marios Tannousis.
According to him, over the last decade, the average growth rate of the IT sector in Cyprus has been 15%. This is the best indicator among all other sectors of the island state's economy. The second place is occupied by economic activity in the field of hospitality and catering (+12.7%), while the third place is occupied by administrative and support services (+10%).
At the same time, according to the latest data from the Cyprus Statistical Service, the contribution of the IT sector to the gross value added of Cyprus is now €2.33 billion. This represents a sharp increase of 277% compared to the sector's volumes 10 years ago. At the same time, the annual increase has been the highest in the last three years.
Tannousis attributed this success to the joint efforts of the government and the private sector, as well as several incentives given to companies to relocate to Cyprus.
The key to attracting a significant number of multinational technology companies lies in the government's creation of an attractive package of incentives, skillfully promoted by Invest Cyprus in coordination with the private sector and in consultation with the government," Tannousis said.
Furthermore, Tannousis explained that the incentive package has been complemented by the successful and effective work of the Business Assistance Unit of the Ministry of Energy. He noted that this unit facilitates the fast processing of the registration of companies and ensures that work permits for their personnel are obtained quickly, as well as other important steps necessary for foreign firms to operate in Cyprus.
It is noteworthy that in 2013, the IT sector accounted for only 4.3% of the total gross value added, indicating a significant diversification of the Cypriot economy after the 2013 crisis. It is worth noting that according to the Cyprus Statistical Service, the top five sectors contributing to Cyprus' GDP were wholesale and retail trade, financial and insurance activities, information technology, real estate management and professional, scientific and technical activities.
Demetris Nisiotis, president of the Cyprus Information Technology Association (CITEA), identified two key reasons for the growth of the sector.
These include the initiative launched under the Invest Cyprus framework to attract technology companies, and the global development of the technology sector, especially after the Covid-19 pandemic.
Nisiotis said he sees great potential in the IT sector due to public investment in digitalization under the Recovery and Resilience Plan, which is in line with the European Union's emphasis on digitalization and green transition to increase the resilience of the European economy.
Tannousis also emphasized the importance of an efficient operating environment for international technology companies in order to maintain the sector's momentum in Cyprus.
'It is important for international technology companies and other companies investing in Cyprus to be able to operate in an efficient environment without any difficulties,' Tannousis said.
Tannousis stressed that the government and Invest Cyprus organize round table discussions between foreign investors and the President of the Republic, as well as ministers and deputy ministers to address the challenges and improve the investment environment. Through this dialog, "Cyprus' investment environment is further improved and strengthened, contributing to further economic development and job creation through foreign direct investment."