Gold Magazine: Cyprus as a Regional ICT Launchpad

By Michael Tyrimos - Managing Director, Capacitor Partners / Board Member, CITEA

Interviewed by Adonis Adoni. Featured in Gold Magazine, May 2025

As Cyprus’ tech ecosystem continues to mature and expand regionally, the role of local ICT companies becomes increasingly significant

In recent years, Cyprus has experienced notable economic growth driven by a new pillar – the Information and Communications Technology (ICT) sector. Traditionally reliant on tourism and financial services, the island is steadily evolving into a regional tech hub. In 2024, technology companies were estimated to account for approximately 14% of Cyprus' Gross Value Added (GVA). Local media further reported that in Q2 2024 alone, the information and communications sector contributed €688.5 million – around 10% of quarterly GDP – marking an impressive annual growth rate of 7%, one of the highest among economic sectors. Additionally, according to the World Bank and CEIC, Cyprus' ICT exports increased about 8.5 times between 2009 and 2023.

Alongside the international presence, the Cyprus Government actively supports digital transformation through its National Digital Strategy, bolstered by the EU Recovery and Resilience Facility, 23% of which is dedicated explicitly to digital initiatives. This substantial funding is directed toward enhancing digital infrastructure, modernising public administration through digitalisation, and fostering innovation within local enterprises.

This remarkable growth is factually largely driven by the influx of international technology firms operating in sectors such as fintech, gaming, and productivity software, along with the establishment of local operations by major global software brands that have chosen Cyprus as a base for their regional activities.

However, an equally critical element in the growth and sustainability of the ICT sector is the contribution of Cypriot technology companies. Over more than four decades, these companies have significantly shaped and evolved the local technological landscape – from the pioneering days of the mini and micro-computer industries to today’s innovative custom software solutions developed in Cyprus. Local ICT companies have shown resilience and adaptability, continuously evolving their offerings to meet international standards and client expectations.

Doing business in Cyprus, therefore, extends beyond international companies entering or establishing regional headquarters. It also prominently includes locally born Cypriot firms that have successfully branched out internationally, effectively connecting Cyprus with larger markets. This dynamic is supported by organisations such as the Cyprus Information Technology Enterprises Association (CITEA), established in 1987 with a mission to foster balanced ICT growth and drive positive change within the Cypriot economy. CITEA currently represents more than 100 local ICT enterprises, providing them with essential resources, advocacy and networking opportunities that enhance their international competitiveness.

The international expansion of Cypriot ICT firms generates numerous positive externalities. As local companies operate internationally, particularly in markets such as the Middle East, Greece and the Balkans, their Cypriot personnel gain invaluable insights and expertise. This exposure to diverse business practices, consumer behaviours and regulatory environments enriches local knowledge, enabling companies to adopt best practices and improve productivity at home. Moreover, an international presence helps attract high-quality talent to Cyprus, thereby boosting the local workforce’s capabilities. Foreign professionals bring specialised skills, experience in international operations and innovative approaches to problem-solving. This influx of talent enhances the overall skill set available on the island and stimulates further innovation within local companies. Expansion abroad has fostered partnerships with global software giants, allowing Cypriot companies access to cutting-edge technologies. These partnerships ensure that state-of-the-art technology solutions are not only introduced to local markets but also integrated into the companies’ broader international operations. As a result, Cyprus remains technologically competitive and attractive for both local entrepreneurs and foreign investors.

This outward orientation of Cypriot ICT firms also aligns closely with the Smart Specialisation Strategy for Cyprus 2023-2030, highlighting the importance of international and regional connectivity. The strategy promotes active participation in European and regional innovation ecosystems, encouraging Cypriot enterprises to think and act globally from day one. Local firms are also engaged in partnerships within European initiatives such as Eurostars-3 and Key Digital Technologies (KDT), facilitating access to advanced markets and collaborative R&D.

Looking forward, Cyprus is moving in the right direction, drawing inspiration from other small, tech-forward nations. Malta, for instance, attributes roughly 7-8% of its GDP to ICT. Similarly, Estonia’s ICT sector contributes around 6-8% to its GDP, with ICT services rising from approximately 4% of total exports in 2017 to nearly 16% by 2022. Such benchmarks illustrate achievable goals for Cyprus, emphasizing the critical role of strategic investment and policymaking in fostering a robust tech sector. As Cyprus’ tech ecosystem continues to mature and expand regionally, the role of local ICT companies becomes increasingly significant. Their presence ensures sustainable economic diversification by reducing dependence on traditional sectors, fosters innovation through continuous investment in research and development, and strengthens international connectivity by linking local markets with international opportunities.