For some time now, Cyprus has been pursuing a coordinated campaign to convince international markets that Cyprus is no longer a “tax haven” or a jurisdiction of regulatory loopholes. Seeking to turn the page, the State has actively promoted Cyprus’s transition from a model of opportunistic investments to one based on high technology, transparency, and strong institutional safeguards. To this end, initiatives were launched in key global financial centres, alongside the introduction of new legislation and regulatory changes.

As Brief writes, in December 2025, the authority of the Council of Ministers to grant citizenship by exception was abolished, closing the final legal channel of the former investment-based citizenship scheme.

The Foreign Direct Investment (FDI) screening mechanism is set to come into force. Any investment exceeding €2 million in sensitive sectors—such as energy, defence, and healthcare—will be subject to rigorous security and source-of-funds scrutiny.

This process involves the Financial Intelligence Unit (MOKAS), ensuring that every euro entering Cyprus is invested with a long-term perspective and originates from legitimate sources.

The increase in the corporate tax rate to 15% as of 1 January 2026, although initially met with scepticism, ultimately proved to be Cyprus’s “passport” to international credibility. By fully aligning with OECD guidelines under Pillar Two, Cyprus has ceased to appear on lists of suspect jurisdictions. This move unlocked interest from institutional investors in the United States and Northern Europe, who had previously avoided the island due to heightened reputation risk.

Through the “Strategy 2026” programme, Cyprus is promoting what is known as headquartering. Incentives aimed at attracting high-technology companies—particularly in FinTech, artificial intelligence, and biometrics—have been strengthened, with tax benefits directly linked to the creation of real jobs. The streamlined issuance of work permits for specialised personnel through Digital Nomad Visa 2.0, combined with the operation of the upgraded Business Facilitation Unit, has begun to attract global technology players relocating their regional headquarters to Limassol and Nicosia. This trend is gradually positioning Cyprus as a credible technology hub in the Eastern Mediterranean.

This transformation was not accidental, but the result of an assertive economic diplomacy strategy targeting decision-making centres that had previously viewed Nicosia with scepticism. A critical turning point can be traced to closed-door meetings held by the economic team in Washington and the City of London. There, Cyprus presented its unified digital register of Ultimate Beneficial Owners (UBO), fully interconnected with European authorities, effectively eliminating the ability to conceal wealth behind complex corporate structures.

At the same time, Nicosia built bridges with Abu Dhabi and Riyadh for strategic partnerships in the green energy sector. The adoption of a surplus management model inspired by Northern European sovereign wealth funds has convinced major pension funds that Cyprus now possesses the institutional maturity required to host low-risk capital.

The anticipated full accession of Cyprus to the Schengen Area represents the strongest card on the Government’s agenda. This step is not merely a matter of security, but also a powerful economic tool. The Government now promotes “Permanent Residence” not as a trade in documents, but as access to a secure European business ecosystem. Real estate investors are subject to particularly strict annual compliance checks. This regulation eliminates the phenomenon of “ghost” investors, as the retention of residence permits is now conditional upon genuine economic activity.