Investment Incentives to Bolster Cyprus’ Innovative Businesses
Deputy Minister of Research Nicodemos Damianou recently highlighted the launch of two key investment incentives aimed at fostering growth within the innovative business sector in Cyprus. These incentives are part of a broader strategy to enhance the startup ecosystem and attract foreign investment.
The first initiative, known as the innovation certificate, has already seen significant uptake with 38 certificates awarded last year. This program provides a substantial 50 percent tax exemption for investments made in innovative businesses, signaling the government’s commitment to supporting creative and forward-thinking enterprises.
Simultaneously, the Cyprus startup visa scheme is gaining traction, albeit with a more selective approach. Out of 51 applications received in 2023, only four have met the stringent criteria for approval. Despite these modest numbers, Damianou emphasized the importance of refining these initiatives to better serve high-potential sectors such as technology. The startup visa scheme is an integral part of Cyprus’ plan to evolve its startup scene from nascent to mature, with a vision to approve up to 150 applications by May 2024.
Stelios Chimonas, General Manager of the Deputy Ministry of Innovation and Digital Policy, underscored the strategic importance of connecting research centers with the market. This connection is vital for retaining the next generation of Cypriot scientists and innovators. Chimonas also provided an update on the Horizon Europe programme, where Cyprus has effectively utilized €210 million out of a €500 million fund, with a drawdown rate of 3.96 percent since 2021.
In a nod to Cyprus’ scientific community, Chimonas celebrated the country’s recent accomplishment of securing its first ERC Advanced Grant in over a decade—a testament to its global scientific prowess. Additionally, institutional funding for research is on an upward trajectory, with projections indicating an increase to €25 million by 2024. The Research and Innovation Foundation (RIF) also benefits from an annual €21 million to support competitive funding calls and ecosystem services.
The RIF has further enhanced its financial arsenal with an extra €10 million from the RepowerEU initiative, earmarked for energizing the energy sector and advancing green initiatives. Despite staffing challenges, the ministry is actively addressing these issues by restructuring its IT Department and planning new hires by mid-2024. Among its upcoming projects, the ministry is set to implement a government cloud architecture and undergo organizational restructuring to better serve its objectives.
