Cyprus has strengthened its standing as one of the region’s emerging digital economies, according to the latest Digital Economy Navigator 2025 (DEN) report by the Digital Cooperation Organization (DCO). The report, unveiled in Doha, highlights the island’s strong progress in digital governance, infrastructure, and innovation, while identifying areas such as hardware production and digital skills where improvement remains needed.

The DCO’s annual benchmark measures 80 countries across 11 pillars grouped into three dimensions: Digital Enablers, Digital Business, and Digital Society. Cyprus, a new entrant to the index this year, scored above the global average in several key enablers of digital transformation — including infrastructure, policy, and financial maturity.

The report singles out Cyprus as an example of “digital governance in action,” noting the launch of the new EU-compliant electronic ID system in January 2025. The system allows citizens over 18 to securely access public services and make legally binding e-signatures via mobile authentication, with the first 100,000 cards subsidized to accelerate adoption.

According to the DCO, the initiative “streamlines service delivery, increases efficiency, reduces administrative costs, and strengthens trust in digital transactions and cross-border e-commerce.”

Cyprus also received recognition in the Digital Startup Environment subpillar, where it was among only seven countries worldwide to record improvement in new business density. The report cites the surging foreign company registrations, noting that the island’s stability, competitive tax advantages, and the Business Facilitation Unit have helped attract record levels of investment and simplify business setup.

Cyprus achieved some of the highest regional scores in Internet Access (91.2) and Digital Inclusion (100), confirming that nearly universal online access and inclusion have been achieved. Its digital finance pillar also performed well (76.3), with advanced levels of financial system maturity and regulatory stability.

Digital infrastructure remains one of Cyprus’s strongest enablers, scoring 80.3 overall, supported by near-universal broadband coverage (89.7) and high affordability (98.4). These scores place Cyprus firmly within the “advanced” category for infrastructure readiness.

However, the report also points to structural weaknesses that could limit the pace of digital transformation. The country scored low in hardware production (21.4) and only moderate in software (59.9) and telecommunications (71.7). Its digital literacy, skills, and talent score (61.4) also signals the need for stronger upskilling and reskilling programs to match rapid technological change.

Within the Digital Society dimension, Cyprus performed well on social inclusion (80.5) but showed lower maturity in digital for work and training (52.0) and digital for sustainability (55.7), reflecting limited circular economy adoption and modest progress in energy efficiency and e-waste management.

As digital cooperation gains importance globally, the DCO urges countries like Cyprus to “sustain investment, enhance innovation ecosystems, and close skill gaps” to fully realize their digital potential.